Mahomedy tackles locomotive costs, interest rate swaps at Zondo Commission
Transnet acting CE Mohammed Mahomedy continued his testimony at the Zondo commission of inquiry into State capture on Thursday, further detailing how the State-owned entity was bleeding billions of rands as a result of irregular contracts and interest rate swaps.
Mahomedy told the commission about three contracts with China South Rail (CSR) that were entered into over various periods to supply locomotives to the State-owned freight operator.
He said that over a two-year period, the price for locomotives from CSR had risen from about R28-million per locomotive to R50-million per locomotive. There were “specification differences” between the locomotives, he said.
Mahomedy also testified that Transnet had and would continue to lose billions of rands because of interest rate swaps on loans it made to secure contracts that were set to run until 2030.
Additionally, authorisation for the interest rate swaps appeared to have been done without following procedure.
He said the interest rates on loans made to purchase the locomotives was swapped from floating to fixed.
The fixed rate could mean Transnet would be paying additional money in interest each year on massive loans.
He said that according to an email he had read while reviewing the contracts, the swap in one case would have led to an additional interest payment of R200-million on a R12-billion loan for locomotive purchases.
The swap was, however, approved by Transnet. Mahomedy said he could find no evidence that procurement processes were followed.
Mahomedy was the company’s acting chief financial officer until he was moved to his current position in May last year. This was done after the entire board was replaced.
The new board has been reviewing all of the contracts entered into by Transnet, which has formed the basis of Mahomedy’s testimony at the commission.
His testimony continues.
Comments
Research Reports
Projects
Latest News
Showroom
Rentech provides renewable energy products and services to the local and selected African markets. Supplying inverters, lithium and lead-acid...
VISIT SHOWROOM
Weir is a global leader in mining technology. We recognise that our planet’s future depends on the transition to renewable energy, and that...
VISIT SHOWROOM
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
