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Rail investments come rolling in

Hundreds of billions of rand in investment into passenger and freight rail transportation will see the Passenger Rails Association of South Africa injecting R123-billion into it rolling stock replacement programme and European manufacturer Alstom has briefed local companies on what it sought in a supplier, with which it would partner.
Alstom is preparing to tender for the first of Prasa's rolling stock projects. The winning bidder will design, manufacture, supply and maintain 3 600 carriages over a 10-year period. The intention is to replace Prasa's entire fleet of trains as the average age of Metrorail's coaches is 40 years and their lifespan is just 46 years.

The requirement for local content is 65%. In addition, there are broad-based black economic empowerment, local economic development, skills development, job creation and intellectual property transfer criteria attached to the tender, says Prasa CEO Lucky Montana.

The tenders are designed to force global rail manufacturers to partner local businesses. Olivier Baril, Alstom Transport vice-president for sourcing, says the company wants to work with a limited number of companies, but over a long period. It has asked suppliers to make proposals to it that are tailored to the specifications of the Prasa tender bid.

This week, the US's General Electric (GE), which is supplying 143 locomotives to Transnet, said it had achieved a local content level of 37%. The locomotives will be delivered by the end of 2013.

GE's close working relationship with Transnet Rail Engineering may put the company in a better position to win future contracts. Transnet is expected to issue a tender for the supply of 1 300 new locomotives.

Tim Schweikert, CEO of GE transportation for sub-Saharan Africa, China and south-east Asia, says his company hopes to use its investment in rail engineering in SA as a springboard to expand into other African countries.

Similar to other global companies, which have recently sought to enter the SA market, Schweikert says GE's intention is to operate in the region over the long term.

A newer entry into the region's rail market is Barloworld, which has entered into an agreement with Caterpillar's Electro-Motive Diesel to establish a new joint venture: Electro-Motive Diesel Africa.

It hopes to provide locomotives and railway products and services, and will no doubt compete for its share of rail contracts. The firm's newly appointed CEO, Sibani Mngomezulu, is a former Barloworld director.

Source: Financial Mail via I-Net Bridge.


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