HiSpeed Rail: a fast-tracked gravy-train?

[Steve Appleton]

From Johannesburg's The Times, 22 February 2011:
http://www.timeslive.co.za/local/articl ... or-cabinet

High-speed rail project heads for cabinet

Feb 22, 2011 2:32 PM | By Sapa

The proposed high-speed railway project between Durban and Johannesburg is ready to be presented to cabinet for approval, Transport Minister Sibusiso Ndebele said on Tuesday. Cabinet approval would start a process which included a feasibility study on the viability of the rail link, Ndebele said in a statement.

The project was part of the Transport Department's plan to revitalise the country's rail industry and, in the process, unlock its economic potential and create jobs, he said. He dismissed reports that President Jacob Zuma's son Duduzane Zuma, Lazarus Zim, the Gupta Brothers and their Chinese partners were in line to win the rights to construct the high-speed rail project. "We wish to state that the Department of Transport will only call for expressions of interest on the Durban-Johannesburg high speed rail route in July 2011. In June 2011, we are also hosting an International Investors' Conference in Cape Town to consolidate the interests in our infrastructure projects, including the Durban to Johannesburg high speed rail project," said Ndebele. Once these expressions of interest were received, they would be subjected to a strict evaluation process and the preferred and winning bidders would be announced after an inclusive and transparent process. "Taking this into consideration, there is no way that any party including the media that is currently interested in the Durban to Johannesburg rail project could know before we have even called for expressions of interest, that they will win the rights to construct this rail project," he said.

Ndebele announced in September last year that as part of the National Transport Master Plan (Natmap) 2010 to 2050, the department planned to revitalise the commuter rail network between Durban and Johannesburg. In 2005, through Natmap, the department under the then transport minister Jeff Radebe, who is now minister of justice and constitutional development, conceptualised high-speed rail for Johannesburg to Durban, Johannesburg to Musina, and the Moloto Corridor between Tshwane and the former KwaNdebele in Mpumalanga.

[Steve Appleton]

One really has to question this process, not so much as to whether we need a high-speed rail network, but the mechanisms and politics behind it all.

The high-speed rail project is suddenly on a very fast-track into the highest committees in the land. I have to wonder if the prospect of sharing in the potential R500bn bonanza has anything to do with it? Especially those directors of a company that was formed only a very short while ago to work with China Railway Construction Corporation who are apparently serious bidders for the project. See this posting: http://www.friendsoftherail.com/phpBB2/ ... 108&t=8070.

The ministry also set out to allay fears about potential cronyism involving the project, saying it had "noted recent media reports indicating that Duduzane Zuma, the son of President Jacob Zuma , Lazarus Zim, and the Gupta brothers together with their Chinese partners were in line to win the rights to construct Africa’s first high-speed rail project" and that the department would only call for " expressions of interest on the Durban-Johannesburg high- speed rail route in July".Business Day 23 February 2011

Not so incoincidently, several of these same "connected" directors, one of whom has just been appointed by political masters as chairman of Telkom, have announced a massive project to build a new steel plant in conjunction with Indian company, Steel Authority of India.

Weighty investment in SA. NEWS that Lazarus Zim’s Afripalm Resources has signed an understanding with the Steel Authority of India to possibly build a R21bn integrated steel plant in SA will hugely excite government planners and steel consumers weighed down by what they say are high prices. Published: 2011/02/24 Business Day

How and why is it that the names "Lazarus Zim" and "Gupta" have risen so amazingly from relative obscurity, seemingly attaching themselves to all the grandest of projects -- those that have the close ear of cabinet?

This Business Day column by Tim Cohen sums it up http://www.businessday.co.za/Articles/C ... ?id=134947:

TIM COHEN: Zuma pals line up for contracts

INTERESTING that President Jacob Zuma’s pals are getting top jobs and in most cases there is a link to the Guptas.
Published: 2011/02/21 09:05:47 AM

INTERESTING that President Jacob Zuma ’s pals are getting top jobs and in most cases there is a link to the Guptas.

The big rentees are crowding around the infrastructure and the telecoms business, since that is where new government spending is likely to be. But that requires a set of new CEOs who are — how can I say this? — amenable to constructive suggestions.

So former Public Investment Corporation head Brian Molefe has been moved to Transnet, just before big contracts are handed out there. Molefe is reportedly "close" to the Guptas.

The other move is to get a new CEO for Telkom , and that requires former Kumba chairman Lazarus Zim to be Telkom chairman for a suspiciously short time. The new CEO could be Zim’s friend Romeo Kumalo.

Why Telkom? Apparently because there is going to be another BEE deal at Telkom.

Telkom has been asking how the market may react to a new deal. A 25% share in the company’s equity was given away in the first one. Hard, but understandable given SA’s history. But a further dilution? Proponents will argue that Telkom has no BEE deal in place. But Telkom had a BEE deal. That was before it decided the sale of its half-share of Vodacom was such a big transaction, all bets were off, and the bind-in rules were voided. Everybody cashed out: management, investors, BEE beneficiaries.

What irks the new administration is that many of those beneficiaries were Mbeki supporters. Bur the answer should not be to plunder this struggling company even further. Luckily, there is a solution. The state still owns 30% of Telkom. Investors won’t mind if that goes to BEE shareholders. Taxpayers who subsidised Telkom for years will be miffed, but who cares about them?

Do rats smell? If so, perhaps I do smell one.

[Aidan McCarthy]

Lots of pork all round

[Steve Appleton]

From Business Day, 25 February 2011
http://www.businessday.co.za/articles/C ... ?id=135514

Cosatu calls for probe into Zuma, Gupta dealings

Cosatu to commission an investigation into allegations that Zuma’s family and the Gupta family are plundering the economy

SAM MKOKELI
Published: 2011/02/25 06:27:57 AM

THE Congress of South African Trade Unions (Cosatu) will commission an investigation into allegations that President Jacob Zuma ’s family and the Gupta family, with which he has close ties, are plundering the South African economy.

This announcement, made on the first day of the tripartite alliance summit, could further strain relations between the labour federation and African National Congress (ANC) leaders. Relations between Cosatu and its alliance partners — the ANC and South African Communist Party — have come under increasing strain due to the union’s outspoken criticism of government performance and corruption.

The call for an investigation follows media reports that a company linked to the president’s son, Duduzane Zuma, and the Gupta family’s Mabengela Investments will benefit from the government’s multi-billion rail infrastructure programme. Both companies are alleged to have partnered with China Railway Construction Corporation, which is the main player in the R500bn project.

Cosatu spokesman Patrick Craven said the federation’s executive committee decided this week that independent investigators should be commissioned, as it was concerned about reports of irregular business deals involving the Gupta brothers and Mr Zuma’s son.

While no time frame had been set, Cosatu said yesterday it wanted to investigate the matter to ascertain if the allegations were true.

The alliance summit ends in Pretoria today, and is expected to deal with conflicts over the government’s performance, policy direction and power battles between the allies.