Tags: Africa | locomotives | GE | Bombardier

GE, Bombardier Among Winners of $4.7 Billion S. Africa Deal

Monday, 17 March 2014 07:29 AM

Transnet SOC Ltd., South Africa’s state-owned ports and rail operator, picked four companies to supply new locomotives as part of a $4.7 billion investment to renew its aging fleet.

General Electric Co. and China’s CNR Rolling Stock will supply 465 diesel locomotives while Bombardier Inc. and China’s CSR Zhuzhou Electric Locomotive won the contract for 599 electric locomotives, Chief Executive Officer Brian Molefe told reporters in Johannesburg today. Most of the locomotives will be built in South Africa and they will be delivered within three-and-a-half years, he said.

“Ability to stick to an extremely tight delivery schedule was one of the key considerations in assessment of the bids,” Molefe said. “It is our view that no single supplier would have the capacity or resources to deliver within the timelines we had envisaged.”

Africa’s largest economy needs the locomotives to upgrade its transport infrastructure and improve export capacity. Transnet, which owns and manages about 12,400 miles of rail lines, transports commodities such as iron ore and coal as well as general freight goods. The locomotive contract is worth 50 billion rand ($4.7 billion), Transnet said today. The figure is more than 40 percent higher than a previous government allocation for the commission.

Boosting Volumes

More than two-thirds of Transnet’s capital expenditure will be used to renew and expand the company’s freight rail infrastructure.

The company plans to lift cargo volumes, which include coal, manganese and iron ore, to 350.3 million tons by March 2019, according to its website.

To create jobs and develop expertise, South African state-owned companies in the past preferenced suppliers who committed to manufacturing major parts of their offerings domestically. The investment is expected to contribute over 90 billion rand to the local economy, Molefe said.

GE, based in Fairfield, Connecticut, already built 143 locomotives for Transnet at a South African factory, according to the rail operator. The Export-Import Bank of the U.S. backed a 1.1 billion-rand loan to Transnet to pay for the engines, Transnet said in September. The company in 2012 also agreed to pay CSR Zhuzhou 2.6 billion rand for 95 locomotives.

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Transnet SOC Ltd., South Africa's state-owned ports and rail operator, picked four companies to supply new locomotives as part of a $4.7 billion investment to renew its aging fleet.
Monday, 17 March 2014 07:29 AM
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