LOBAMBA – Members of Parliament (MPs) have called on Eswatini Railways (ESR) to ensure that local trucking companies are given priority in the next coal haulage tender.
The MPs argued that the previous arrangement with South African logistics giant, Grindrod, left many emaSwati counting heavy losses.
The issue dominated proceedings when ESR appeared before the Public Accounts Committee (PAC) for the second time yesterday to respond to findings contained in Auditor General (AG) Timothy Matsebula’s Compliance Audit Report for the financial year ended March 31, 2024.
Besides concerns over procurement irregularities relating to the leasing of locomotives from Grindrod Logistics Africa, the PAC members used the opportunity to demand safeguards that would prevent local truck owners from being sidelined in future commercial agreements.
According to the AG, ESR failed to follow the prescribed procurement procedures when leasing four GL28SCC-DC diesel-electric locomotives, serial numbers GMU 1202, GMU 118, GMU 115 and GMU 110, from Grindrod Logistics Africa.
Matsebula said it was unclear which procurement method had been used when engaging the company, contrary to Section 42(1) of the Procurement Act, 2011, which requires procuring entities to use approved procurement methods for all acquisitions.
He said the procurement process did not demonstrate economy, transparency, fairness or competitiveness, raising concerns that value for money may not have been achieved.
Responding to the findings, Acting ESR Chief Executive Officer Sandile Dlamini conceded that the AG’s observations were correct, explaining that the decision was made after Grindrod sought to move its coal stockpile to Mozambique as quickly as possible.
He said the customer became concerned that coal was accumulating at the stockpile, while international prices were declining, prompting the company to bring in its own locomotives to accelerate transportation.
“In hindsight, we should have stopped the exercise until all legal procurement requirements had been complied with. The locomotives were transporting Grindrod’s coal to Mozambique using our drivers,” Dlamini told the committee.
He revealed that the controversial locomotive lease agreement has since been terminated and ESR was currently winding up the remaining contractual obligations.
According to Dlamini, two of the locomotives were involved in an accident and were repaired by the customer. He said discussions were continuing over insurance payments and outstanding amounts owed to ESR, adding that while Grindrod had begun removing spare parts used on the locomotives, the locomotives themselves remained on ESR premises.
He further disclosed that following the AG’s intervention, ESR had advertised a fresh tender for leasing locomotives.
The procurement process had progressed to the adjudication stage and awaited the intention-to-award phase. While the procurement issue was under scrutiny, MPs shifted focus to the devastating impact the collapse of the coal transportation project had on local truck owners.
Nhlambeni MP Manzi Zwane questioned whether any feasibility study had been conducted before the project commenced, saying many emaSwati had invested heavily in trucks and equipment after being encouraged by the anticipated coal haulage business.
He noted that numerous truck owners were now losing their vehicles to banks after the business failed to generate the expected returns and sought clarity on whether proper contractual arrangements had been in place from the outset.
Dvokodvweni MP, Sicelo Shabalala, said many emaSwati had been impoverished by the manner in which the project unfolded. He observed that while local transport operators had initially benefitted from transporting coal, the situation changed when Grindrod introduced its own fleet of trucks, leaving local contractors without work despite having borrowed substantial amounts to purchase trucks and machinery.
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