December 03, 2015

Prasa seeks termination of Vossloh locomotive contract

Written by  IRJ correspondent
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PASSENGER Rail Agency of South Africa (Prasa) has approached the High Court in Johannesburg in a bid to terminate the controversial €250m locomotive deal it signed with Vossloh, alleging that the tender was rigged.

In papers filed by agency chairman Mr Popo Molefe on November 28, Prasa asked for the deal to be scrapped and for Vossloh to refund the Rand 2.5bn ($US 174m) already paid by the agency.

Molefe claimed that the tender for 20 Afro4000 diesel-electric locomotives and 50 Euro-Dual bi-mode locomotives for Prasa's long-distance passenger trains had been structured to favour local black empowerment group Swifambo Leasing and its joint venture partner, Vossloh Spain.

In the papers before the court, Molefe alleges that Swifambo leasing was formed especially for the deal and that Vossloh Spain's Southern African subsidiary, was created only after Swifambo submitted the initial bid.

Molefe argues that Swifambo had no proven history in supplying locomotives and had not supplied financial statements on which its financial ability could be assessed.

The locomotive deal has been beset with trouble since the discovery that the diesel units – the first of which arrived in December 2014 – exceeded the South African loading gauge.

The six-axle Afro4000 – a 1067mm-gauge version of Vossloh's Euro 4000 model – stands 4140mm above the rail head, well outside the 3695mm limit specified in Transnet's track maintenance manual. Subsequent tests showed the locomotives were likely to foul the overhead electrification equipment at certain locations on the country's 3kV dc network. Transnet Freight Rail banned the locomotives from most of its network while engineers grappled with the problem.

The matter was partially resolved on December 3, when South Africa's Rail Safety Regulator released a report in which it noted that while the locomotives may be out-of-gauge for certain sections of the network, they will be able to operate safely on the country's 25kV ac networks in the Free State, Northern Cape and Eastern Cape provinces.

That is likely to be cold comfort to former chief executive Mr Lucky Montana, sacked in July this year, and former chief engineer Mr Daniel Mtimkulu, the Prasa engineer overseeing the Vossloh deal who was fired after an internal investigation revealed he did not have certain engineering qualifications that he claimed to possess.

According to news reports, Prasa is planning legal action against Mtimkulu to recover Rand 20m in pay, bonuses, and travel expenses paid to him while he worked for the agency.

Montana, who was already serving his notice period after resigning earlier in the year, was fired on July 15 by the Prasa board after it said it was unhappy with his continued criticism of it, according to local media reports.

Meanwhile South African special investigations unit The Hawks is continuing its corruption probe into both Mtimkulu and Montana.

So far 13 Afro4000s been delivered to South Africa, most of them languishing in store at Braamfontein yard in Johannesburg pending the outcome of the regulator's investigation.

One unit was severely damaged in a derailment while hauling a southbound passenger train near Kimberley in September. The locomotive and four coaches overturned when the train ran through a temporary crossover at 80km/h. Transnet Freight Rail had neglected to inform Prasa that engineering work was being carried out on that section of the line. Fifty-eight people were injured, four of them seriously.

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