‘Hopeful’ Gordhan leaves for China

South Africa’s Public Enterprises Minister Pravin Gordhan has left for China, leading a delegation that will meet counterparts in the Chinese government in a bid to resolve a standoff over the delivery of locomotives and spare parts by rail equipment manufacturer CRRC E-Loco.

In a statement, the Department of Public Enterprises said the trip, which was announced earlier this year, was part of an effort to fast-track the supply of the goods to SA state-owned company Transnet.

Transnet and the Chinese state-owned rail equipment supplier have been at an impasse after the former halted the supply of 1 064 locomotives from four original equipment suppliers, including CRRC, on the grounds that contracts worth over R54 billion had been awarded irregularly in 2014.

Meanwhile Transnet said its CRRC locomotives are in urgent need of maintenance by the supplier.

The intervention was decided on after a meeting with President Cyril Ramaphosa in March, amid calls for urgent action on the declining performance of Transnet's freight rail division, and the knock-on impact on South Africa's economy.

Transnet has said its CRRC locomotives in particular impact the performance of three crucial rail corridors, namely the North, North-East and Cape corridors, which account for around half of all Transnet Freight Rail's revenue.

They also support three key mining sector segments, namely coal, chrome and manganese.

Once he returns, Gordhan is set to appear before oversight committee, Parliament's Standing Committee on Public Accounts (Scopa). The date for this appearance has not yet been set.

"Minister Gordhan is hopeful that talks with his Chinese counterparts will yield positive results in the interest of both SOCs and in particular to ensure the effective and efficient South African logistics and network services for the benefit of country’s economy," the department said on Monday.-Fin24