The South African Federation of Trade Unions is angered by the shocking revelation that China South Rail (CSR), a Chinese rail company, which allegedly paid bribes (described as “fees”) of over R5-billion to Gupta-linked companies after it clinched contracts from Transnet worth R25-billion, now says it wants the government to give it an exemption from its local content obligations, worth R5.3-billion, to continue to supply new locomotives to Transnet.
SAFTU demands that there must be no exemptions for CSR. Railway rolling stock and all its components can, and must, be awarded to South African companies employing local workers. It is one of those key manufacturing industries which was previously thriving but which has needlessly been run down.
In addition the Hawks and NPA must investigate the allegation of the “fees” payment to Gupta companies, and if these were found to be bribes, both the companies who received them and CSR, which paid them must be prosecuted.
This case provides further proof of the extent of the corruption scandal, extending far beyond Zuma, the Guptas and South Africa, to involve huge corporations like CSR. The whole monopoly capitalist system is rotten to the core!
CSR claims that it could not find local suppliers for certain components and that the “technology licensing” for these products was not available in South Africa. The DTI later confirmed that these components were valued at R5-billion.
Last year amaBhungane’s revealed that CSR had allegedly entered into kickback agreements in relation to the Transnet tenders. Documents from the #Guptleaks emails showed that Gupta-linked companies in the United Arab Emirates were set to receive a staggering R5.3-billion in “fees” emanating from CSR’s Transnet contracts.
It is surely not a coincidence that the value of the cost of the exemption from these local-content obligations is almost exactly the same as these “fees”!
As an “industry insider” told News24: “It is like CSR now wants a discount on its local content obligations because it had to pay the Guptas so much money to open up these contracts with Transnet”.
If true this is one of the worst examples of the huge impact that the criminal actions of the Guptas and their cronies have had on the country as a whole. Hundreds of local jobs have been put in jeopardy as a consequence of an allegedly corrupt bribe.
SAFTU welcomes the decision by the department of trade and industry (DTI) to reject the exemption request, but concerned that reportedly it has lost hope that CSR could still achieve a local content score of 60%, as required by the Transnet contract, which included strict local content and supplier development obligations, which were supposed to help create jobs and grow the local economy.
The first 166 of the 359 locomotives thus far delivered by CSR to Transnet, as part of the project, have a local content score of only 33%, according to figures supplied by the company itself, and granting this exemption request would make this percentage even lower.