R50-bn locomotive contract sets TRF on growth path

Transnet has awarded a R50-billion contract to four global original equipment manufacturing (OEM) companies for the building of 1 064 locomotives – the largest-ever locomotive supply contract in South Africa’s history. This was announced in Johannesburg on Monday by Transnet chief executive Brian Molefe who acknowledged South Africa’s industrialisation and infrastructure deficit which has hampered its global and intra-regional trade growth and caused delivery frustration. Molefe said that all but 70 of the 1 064 locomotives – 599 electric and 465 diesel – would be built at Transnet Engineering’s (TE) plants in Koedoespoort, Pretoria and Durban. “We are investing significantly in plant and equipment at the plants to make this happen, with Durban to receive a R300-million upgrade,” Molefe noted. “The OEMS have committed to building in South Africa, in conjunction with TE and local South African suppliers, and will transfer their expertise and skills to the local market, enabling TE to create export capability for locomotives and related products,” he said. Molefe added that these localisation elements were expected to contribute over R90 billion to the economy. In terms of the agreements signed with the successful bidders, the last locomotive will roll off the production line within three and a half years, with around 48 locomotives being produced within a month. “The rationale for four bidders was therefore that they could produce stock simultaneously and we could cut down on the production time a single company would need.” With the new rolling stock, Transnet Freight Rail (TFR) will grow its volumes to 350 million tonnes, from the current capacity of 207 million tonnes, with the majority of the new locomotives deployed in the general freight business. Speaking at the announcement, Dr Lutz Bertling, president and chief operating officer of Bombardier Transportation Global – one of the four successful bidders – said that investment in South African rail infrastructure was expected to reach an “alltime high” in the near future. “Our investment extends beyond merely building in South Africa but rather to investing in the growth of the manufacturing sector by developing skills, expertise and resources in the country.” INSERT & CAPTION 1 Our investment extends beyond merely building in South Africa. – Lutz Bertling INSERT & CAPTION 2 The OEMS will transfer their expertise and skills to the local market, enabling us to create export capability. – Brian Molefe