Of the total amount, R13bn will be spent on infrastructure development and about R3bn will be spent on the construction of new depots in Cape Town and Gauteng.
According to Prasa Group Chief Executive Officer, Lucky Montana, the first new trains are expected as early as in 2015. He said they were expecting to receive in the region of 500 to 600 coaches a year until 2032.
Addressing the media in Pretoria on Tuesday, Montana said the current fleet was ageing and there was a need to acquire new trains to improve services. Most of the current trains are about 40 years old.
"The people of South Africa must have a mode of transport that they will be proud of," he said.
According to Montana, the trains will look completely different from the current ones - they will be fitted with public announcement systems and information screens indicating the name of the station that the train is approaching.
Montana continued to say that with the current fleet, the level of reliability was deteriorating. "We also need to reduce travel times as part of improving on our service," Montana said, adding that travel time from Pretoria to Johannesburg needed to be reduced.
The roll-out of the programme is expected to create about 65 000 job opportunities.
The project would include introduction of modern rail technology using less energy. Most components to be used in building of he trains would be made in South Africa.
With regard to safety, Montana said the safety of passengers is a priority.
Montana explained that the new trains would be lighter and more energy efficient.
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