Chinese President Xi Jinping (R) introduces members of his delegation to South African President Jacob Zuma (L) at the Union Buildings in Pretoria, during the start of his official tour to South Africa on December 2, 2015.

The Department of Water and Sanitation and the Passenger Rail Agency of South Africa (Prasa) are set to hand over two contracts worth R70 billion to a Chinese parastatal according to media reports.

In a report by The City Press on Sunday the newspaper claimed that two mega-contracts between government and a Chinese parastatal are set to go ahead, despite neither qualifying for deviation from procurement laws.

The newspaper said it had obtained confidential documents that indicate that the DWS, together with Prasa and Treasury, have entered into funding negotiations with the Export-Import Bank of China (Exim Bank).

According to the report the documents also appear to show that Exim will only provide the finance on condition that the construction on both projects is done by another Chinese parastatal, the China Communications Construction Company.

DA to question Gigaba

The two projects under the spotlight are the Moloto rail development corridor which has an estimated cost of R57 billion and has been identified as one of the country’s 18 strategic infrastructure projects (SIPs) and the Mzimvubu water project which is estimated to cost taxpayers R16 billion.

According to reports the DA expects Finance Minister Malusi Gigaba to explain why the parastatals were awarded the contracts without adhering to the public tender process and to reassure the government and the public that the projects would not go ahead without following the correct protocols.

Fin24 reports that the DA would pose these questions to Treasury when it appears before the Standing Committee on Finance on Wednesday.

Source: City Press, Fin24