This 3 sentence summary provides the high level and essential information from the document: Transnet SOC Ltd issued tenders in 2012 for 1064 locomotives where China South Rail and China North Rail were successful bidders but prices were illegally inflated in 2014 through the involvement of Regiments Capital and Trillian Capital, resulting in billions being stolen from Transnet through corruption. There is evidence that China South and North Rail were involved in this corruption. The letter requests that the Chinese Ambassador refer the two Chinese companies to Chinese law enforcement agencies to investigate their involvement in the Transnet locomotive tender corruption.

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L I Mr SONG
Ambassador Extraordinary & Plenipotentiary
P O Box 95764
Waterkloof
0145
Per Email: han.mfa@gmail.com
14 JUNE 2017
INVOLVEMENT OF CHINA NORTH AND SOUTH RAIL IN TRANSNET SOC LTD
LOCOMOTIVE TENDER CORRUPTION
Ambassador Xuejun,
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 two of the successful bidders, China South and North Rail submitted their best
and final offer of R28.9 million and R27.4 million per locomotive respectively. 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. China South and North Rail submitted new revised
final and best offers of R50.9 million and R42 million per locomotive respectively.
The revised figures were inflated by well over

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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 China North and South Rail were
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 our efforts to build a capable state, educate
our nation, build strong economies to create employment and reduce poverty and
inequality.
Since China South and North Rail are Chinese companies, I write to you on behalf of
the EFF to demand that you refer both companies to the Chinese 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 am encouraged by the position taken by your government of no tolerance to white-
collar crime and corruption in the past, and I appeal to you to handle the matter with
the urgency and the sensitivity it deserves as I await your response.
Yours Faithfully,
Julius Sello Malema
EFF President