A South African court set aside an R8-billion contract between the State rail operator and a company that’s now a unit of Wabtec Corp for 233 diesel locomotives, part of a long-running crackdown against corruption in government institutions.

The Gauteng High Court’s decision comes seven years after President Cyril Ramaphosa first referred claims of graft at logistics company Transnet for investigation, with the firm and the Special Investigating Unit (SIU) – a government agency that probes State corruption – calling the judgment “momentous” in a joint statement Wednesday.

In 2014, Transnet awarded four contracts to procure 1 064 locomotives that cost R54-billion. A South African panel that spent four years probing graft through 2022 found Transnet fell victim to racketeering during former President Jacob Zuma’s rule, making it the “primary site” of State capture, a local term to describe how private companies worked with government and State-company officials to funnel funds from these entities.

Ramaphosa pledged to end corruption that resulted in the theft of more than R500-billion from State companies and government departments during Zuma’s nine-year rule.

Officials are now focused on reviving an economy whose growth has averaged less than 1% annually over the past decade, and restoring public finances after years of corruption, mismanagement and bailouts of struggling State-owned companies.

The April 14 ruling marks “a pivotal advancement in our ongoing efforts to combat state capture and restore integrity in South Africa’s state-owned enterprises,” the SIU and Transnet said.

As part of the settlement, Transnet will keep the locomotives delivered by Wabtec, formerly GE South Africa Technologies, the SIU said. Wabtec will retain all payments received under the contract, while Transnet will receive R70.4-million.

Furthermore, Wabtec will provide Transnet with a credit of R70.4-million “to fulfil outstanding supplier development obligations.”

At the time, Transnet also awarded Bombardier Transportation South Africa a contract for 232 electric locomotives. It signed up for 240 diesel locomotives from CNR Rolling Stock South Africa – now CRRC SA Rolling Stock – and 359 electric ones from CSR E-Loco Supply – now CRRC E-Loco Supply.

Transnet and the SIU said the Wabtec contract “marks the first of four locomotive contracts to be annulled by the courts.”

In December, McKinsey & Co agreed to pay more than $122-million to resolve US criminal allegations tied to a corruption scandal involving former leaders of Transnet. SAP, KPMG and ABB have all accepted responsibility for improper work at South African State-owned companies and in some cases paid back fees.