A senior government official said at a briefing in Cape Town this week that the move would enforce compliance with rules on local content and ensure that locomotive and rolling stock deals were financially sound.

Minister in the presidency Mr Jeff Radebe says consolidating locomotive procurement would ensure “efficiency and compliance with localisation requirements,” BDLive reports.

Transnet and Prasa have traditionally made their own deals with locomotive builders. In June 2014, Transnet signed a deal worth more than Rand 50bn ($US 3.6bn) for 1064 locomotives from General Electric, Bombardier and CRRC Corporation, while passenger operator Prasa entered into a Rand 3.5bn deal with Vossloh for 70 locomotives.

The Vossloh deal - which has since ballooned to Rand 5bn as a result of inadequate hedging - has been mired in controversy since the new locomotives were found to exceed the South African loading gauge, resulting in Transnet banning the units from operating over its 3kV dc network for fear of fouling the catenary.

Meanwhile, the South African Bureau of Standards (SABS) said in April it was yet to receive full details on the amount of local content in the new locomotives currently being built for Transnet, BD Live reports.

Transnet has set a localisation target of 69% for its new locomotives, a move that is in line with state requirements to support local manufacturers as well as Transnet's long-term ambition to became an OEM in its own right. This would be the first time the standards bureau had conducted a localisation review of rolling stock.

On August 23, the government also announced that President Jacob Zuma will oversee the strategy of all state-owned enterprises as the chairman of a special presidential coordinating committee.

The president will have “line-of-sight on strategic decisions and interventions” concerning South Africa's state-owned enterprises, said Bloomberg News quoting Radebe.

The committee will oversee 715 state entities which operate the South African rail network, airports, harbours, troubled national airline South African Airways, and energy suppliers which generate about 90% of the country's electricity.