In a significant development for South Africa's ongoing battle against state capture, former Public Enterprises Minister Malusi Gigaba and four high-ranking former Transnet executives made a brief court appearance in the Gauteng High Court in Johannesburg. The case, centered on the infamous R54 billion locomotive procurement scandal, has been scheduled for trial in 2027. This multibillion-rand saga has long symbolized the depths of corruption that plagued state-owned enterprises during the Jacob Zuma era, with allegations of irregular tender processes, kickbacks, and undue influence from the Gupta family.

The procurement involved Transnet, the state logistics giant responsible for rail and port operations, acquiring 1,064 locomotives between 2011 and 2014 to modernize its aging fleet and boost freight capacity. What was intended as a vital infrastructure upgrade devolved into a web of graft, costing taxpayers billions and crippling the nation's rail network for years.

The Origins of the Locomotive Deals

Transnet's locomotive fleet modernization plan emerged in the early 2010s amid growing demands for efficient freight transport. South Africa's economy relies heavily on rail for bulk commodities like coal, iron ore, and minerals, which account for over 80% of freight volumes. By 2011, the fleet was outdated, with many locomotives over 20 years old, leading to inefficiencies and breakdowns.

The process began with a business case for procuring up to 1,064 electric and diesel locomotives. Instead of a competitive open tender, Transnet opted for a confined process, justifying it as an emergency due to urgent capacity needs. Contracts were awarded to four original equipment manufacturers: China South Rail (CSR, now CRRC), China North Rail (CNR), General Electric, and Bombardier Transportation. The total value escalated from an initial estimate of R38.6 billion to over R54 billion, raising red flags about inflated pricing and hidden costs.

Key irregularities included misrepresentations of economic terms like net present value calculations using incorrect hurdle rates, failure to obtain necessary ministerial approvals, and the insertion of unnecessary financing structures. For instance, the deals incorporated expensive loans from the China Development Bank, arranged through Gupta-linked firms Regiments Capital and later Trillian, which extracted hefty fees without delivering commensurate services.

Key Players in the Scandal

At the heart of the case are five prominent figures:

• Malusi Gigaba: As Public Enterprises Minister from 2010 to 2014, he allegedly received undisclosed cash payments from the Gupta family in exchange for facilitating the irregular contracts.
• Brian Molefe: Former Group Chief Executive Officer of Transnet, accused of approving confinements and misrepresenting financials to the board.
• Anoj Singh: Former Group Chief Financial Officer, implicated in authorizing inflated fees and loans.
• Siyabonga Gama: Former CEO of Transnet Freight Rail, involved in operational approvals and earlier reinstated despite misconduct findings.
• Thamsanqa Jiyane: Former Chief Procurement Officer, charged with incorporating batch pricing that favored suppliers.

These individuals held pivotal positions, enabling decisions that bypassed standard procurement protocols and oversight bodies like the Bid Adjudication Committee.

Detailed Charges Facing the Accused

The National Prosecuting Authority (NPA), through its Investigating Directorate Against Corruption (IDAC), has indicted the accused on multiple counts including fraud, corruption, money laundering, and contraventions of the Public Finance Management Act (PFMA). Specifically:

• Corruption related to three contracts: 95 locomotives, 100 locomotives, and the flagship 1,064 locomotives.
• Fraud through deliberate misrepresentations to Transnet's board and the Minister, leading to undue benefits for suppliers and intermediaries.
• Money laundering of kickbacks totaling billions, laundered through shell companies like JJ Trading, Regiments Asia, and Gupta fronts such as Homix.

Gigaba faces a singular but grave corruption charge for accepting bribes. The Zondo Commission, which probed state capture, provided critical evidence, labeling Gigaba as part of the capture network. For more on the official charges, see the NPA's statement.

Photo by Katherine McAdoo on Unsplash

Gupta Influence and State Capture Links

The scandal is inextricably tied to the Gupta family's capture of Transnet. Salim Essa, a key Gupta associate, orchestrated kickbacks via Hong Kong-based shell companies. For the 95-locomotive deal alone, CSR paid R523 million in bribes, much of which flowed to Gupta entities. Regiments Capital, under Eric Wood, pocketed millions in advisory fees and arranged costly interest rate swaps, causing Transnet R1.83 billion in losses.

Former President Jacob Zuma's interference in appointments, such as reinstating Gama, set the stage. Ministers Gigaba and Lynne Brown appointed pliant board members. The Zondo Commission detailed how this systematic control steered procurement toward corrupt beneficiaries, siphoning an estimated R16 billion through inflated pricing and unnecessary intermediaries.

Timeline of the Procurement and Investigations

• 2010-2011: Gama reinstated; Molefe appointed GCEO; business case approved.
• 2012: RFPs issued; McKinsey/Regiments appointed advisors.
• 2013: Ministerial approval for 1,064 locomotives.
• 2014: Contracts signed at R54.5 billion; kickbacks flow.
• 2015-2017: Deliveries amid mounting scandals; swaps executed.
• 2022: Gama, Molefe, Singh, Jiyane arrested.
• Nov 2025: Gigaba charged; joins as fifth accused.
• Jan-Feb 2026: Case transferred to High Court.
• May 8, 2026: Trial date set for 2027. (Full timeline)

This chronology underscores years of delays in accountability, with courts now annulling contracts like the R8 billion Wabtec deal in 2025.

Economic Fallout from Transnet's Rail Crisis

The scandal's repercussions extend far beyond courtrooms, devastating South Africa's logistics backbone. Transnet Freight Rail volumes plummeted from 226 million tonnes per annum (mtpa) in 2017/18 to under 150 mtpa by 2023, recovering slightly but still far below potential. This shift to road transport has overloaded highways, increased costs, and damaged infrastructure.

Economists estimate daily GDP losses of R1 billion due to inefficiencies. Mining exports, vital for forex, suffer delays at ports like Richards Bay, where queue times exceed 40 days. Transnet posted a R5.7 billion loss in 2023, ballooning debt to R130 billion. Broader impacts include stifled growth, with rail's modal share dropping from 24% to 10%.

Government bailouts totaling R51 billion have propped it up, but private rail concessions are now prioritized to revive capacity.

Public Reaction and Political Ramifications

The case reignites public outrage over state capture, with social media buzzing about 'Locogate'. Opposition parties like the DA demand swifter justice, while ANC figures distance themselves. Gigaba maintains innocence, decrying political persecution. Civil society groups like OUTA and SIU hail progress, having recovered over R1 billion.

Polls show eroding trust in SOEs, fueling calls for structural reforms.

Photo by Levi Meir Clancy on Unsplash

Transnet Reforms and Recovery Efforts

Under new leadership, Transnet has suspended corrupt employees, partnered with private operators, and leased locomotives. The Network Statement opens 1,000km of rail to third parties. Freight volumes edged up 7% in 2025, but challenges persist: theft, vandalism, and debt.

SIU investigations continue, with more contracts under scrutiny.

Outlook for the 2027 Trial and Beyond

The 2027 trial promises revelations, potentially implicating more figures. Success could deter future graft, but delays risk public disillusionment. For South Africa, restoring Transnet's viability is crucial for economic revival, underscoring the need for transparent governance in SOEs.

As the nation watches, this case tests the NPA's resolve post-Zondo.