“This marks a significant milestone in the company’s history together with substantial socio-economic benefits for South Africa. The drive to modernise our fleet is intended to improve reliability and availability of locomotives. This will improve customer satisfaction, ultimately leading to our crucial goal of road-to-rail migration of cargo in line with government’s objectives,” said Transnet CEO Brian Molefe in a statement.
Transnet is a South African state-owned freight transport and logistics company, and the billion rand contract has been recorded as the country’s single biggest infrastructure investment initiative by a corporate.
(READ MORE: Transnet's growth strategy overview)
The four original equipment manufacturers are CSR Zhuzhou Electric Locomotive, Bombardier Transportation South Africa, General Electric South Africa Technologies and CNR Rolling Stock South Africa (Pty) Ltd.
CSR Zhuzhou Electric Locomotive and Bombardier Transportation South Africa will be contracted for the supply of 599 electric locomotives, while General Electric South Africa Technologies and CNR Rolling Stock South Africa (Pty) Ltd will build and supply 465 diesel locomotives.
“This transaction is intended to transform the South African rail industry by growing existing small businesses and creating new ones. We are going to create and preserve approximately 30,000 jobs,” Molefe said.
All the locomotives except 70 will be built at Transnet Engineering plants in Pretoria and Durban.
(READ MORE: Transnet awards nine BEE-based fuel contracts)
Transnet Engineering will share approximately 16 per cent of the total build programme – about a third of which will be outsourced to local emerging engineering and manufacturing firms.
This will enable it to create export capability for locomotives and related products. In total, the localisation elements are expected to contribute over 90 billion rand to the economy.
Transnet Engineering is the company’s engineering, manufacturing and rolling stock maintenance division.
According to the company, once all the locomotives are delivered, Transnet would have met all its rolling stock requirements needed to successfully execute the Market Demand Strategy, the company’s record-breaking 307 billion rand infrastructure investment programme.