General Electric was involved in corruption related to a tender issued by Transnet SOC Ltd in South Africa for 1064 locomotives. As one of the successful bidders, General Electric submitted an initial best offer of R24 million per diesel locomotive but later revised their offer upwards to R38 million after two companies, Regiments Capital and Trillian Capital, illegally inflated prices as transaction advisors. There is evidence that the involvement of Regiments and Trillian corrupted the tender process and resulted in prices being inflated for kickbacks and bribes, costing South Africa billions of rands. The EFF President wrote to the US Ambassador to South Africa to demand that General Electric, as an American company, be referred to American law

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Ambassador Jessye Lapenn, Ms
United State Embassy and Consulates in South Africa
877 Pretorius Street
Arcadia
Pretoria
Per Hand Delivery
14 JUNE 2017
INVOLVEMENT OF GENERAL ELECTRIC IN TRANSNET LOCOMOTIVE
TENDER CORRUPTION
Ambassador Lapenn,
In July 2012, Transnet State Owned Company (SOC) Ltd issued two tenders for a
total of 1064 locomotives 465 Diesel (RFP: TFRACHO – 8609) and 599 Electric
(TFRAC – HO 8609). Between October 2012 and January 2014, Transnet SCO Ltd
assessed submissions by various bidders and a board sub-committee, Acquisitions
and Disposal Committee, chaired by Iqbal Sharma, approved the recommendation of
the acquisition of 599 electronic locomotives of two successful bidders i.e. bidder 1:
Bombadier (40%) and bidder 2: China South Rail (60%). The Committee further
approved recommendation of the acquisition of 464 diesel locomotives of two
successful bidders i.e. bidder 1: China North Rail (50%) and bidder 2: General
Electric (50%).
As one of the successful bidder, General Electric submitted their best and final offer
of R24 321 000 per locomotive for the diesel locomotive. In February 2014, with the
involvement of Regiments Capital (FSP No: 16831) and Trillian Capital (through
Trillian Asset Management (Pty) Ltd FSB No: 42081) as transaction advisors, prices
were illegally inflated from the original final and best prices submitted by the
suppliers. General Electric submitted a new revised final and best offer of R38 655
694 per locomotive for diesel locomotive.

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The prices were inflated under the false pretence of escalation of delivery, as the
locomotives were deemed urgent. However, there is prima facia evidence, which
shows that the involvement of Regiments and Trillian Capital corrupted the tender
process and prices were inflated for kickbacks and bribes and as a result, billions of
rands were stolen from Transnet SOC Ltd and General Electric was involved in this
corruption. It is precisely this kind of corruption that continue to hamper development
efforts for South Africa and Africa as a whole because limited resources are stolen
with the participation and complacence of multination companies. This in turn
undermines all efforts to build a capable state, educate our nation, build strong
economies and reduce poverty and inequality.
Since General Electric is an American multination company, I write to you on behalf
of the EFF to demand that you refer General Electric to American law enforcement
agencies and relevant institutions. I will follow up with your office in due course to get
progress reports on the steps you have taken to report the matter to the law
enforcement agencies and relevant authorities as you are ultimately responsible for
your countries’ entities and their conduct.
I appeal to you to handle the matter with the urgency and the sensitivity it requires as
I await your response.
Yours Faithfully,
Julius Sello Malema
EFF President