TFR wins rule-changing tender bid for new locomotives

Transnet Freight Rail (TRF) has been given the go-ahead for its R35 billion acquisition of new locomotives, following a six-month battle between the Treasury and the Department of Public Enterprises over the empowerment and local content weighting of the tender, Business Day reported earlier this week The daily reports that while Finance Minister Pravin Gordhan’s approval for Transnet Freight Rail to proceed with its tender for 1 064 locomotives will come as a relief to the transport company, it carries important implications for state procurement with a view to fostering local industrial development. The sticking point between the department and the Treasury over the tender was the weighting Transnet would be allowed to apply to evaluate the bids. Department of Public Enterprises director-general Tshediso Matona said that a "framework" would now be developed to guide state-owned companies’ spending on large projects such as the Transnet locomotive tender and Eskom’s future nuclear build programme. The framework, which is as yet untitled, would need to be based on the existing Preferential Procurement Policy Framework Act and the Public Finance Management Act, "while balancing that with industrial development and transformation imperatives" of the government. Once a framework was in place it would create flexibility for the state to be able to evaluate programmes "on a case by case" basis to determine which have the potential to deliver desired industrial outcomes.