SOUTH Africa’s largest coal producers could pay the lionshare of an estimated R1.4bn in order to help Government settle matters with China Railway Rolling Stock Corporation (CRRC), said News24 today.
The publication said three of the country’s three largest coal exporters they were called upon to make the cash contributions on the basis the settlement will help unlock a protracted dispute with the Chinese manufacturer. It is CRRC that has withheld locomotives and spare parts from South Africa. Consequently, South Africa’s rail infrastructrure is heavily constrained.
While coal exporters had agreed in principle to help, they have not yet been asked to actually transfer the funds, said News24. The outstanding locomotives form part of an order for over 1 000 locos, only 590 of which were delivered before relations with CRRC soured, the publication said.
The Chinese company was among those found to have been implicated in state capture, having paid billions in kickbacks to Gupta companies as part of a locomotives supply deal with Transnet. This resulted in the Special Investigating Unit obtaining an order to freeze certain CRRC accounts, while the SA Revenue Service (SARS) instructed third parties to pay over money owed to the company, which it considered a “dishonest taxpayer”.
Public Enterprises Minister Pravin Gordhan travelled to China to meet with CRRC executives in May this year, but a resolution was not announced.
The R1.4 billion in funds pales in comparison to the several billion in coal sales that have been lost due to declining rail performance, which has hamstrung the sector’s ability to take full advantage of high export coal prices, said News24.
One source said there would also be a mechanism for exporters to recover the funds they contribute, it said.
