JSE-listed Barloworld and Electro-Motive Diesel (EMD), of the US, have confirmed the formation of a Southern African rail solutions joint venture, known as Electro-Motive Diesel Africa.
EMD is a leading global supplier of diesel-electric locomotives and a subsidiary of Progress Rail Services, which is, itself, a unit of the Caterpillar Group.
Barloworld has had a long-standing relationship with Caterpillar and is distributor of the group’s capital equipment in Southern Africa, Spain, Portugal and parts of Russia.
The new venture, which was formally established on June 15, will service customers in South Africa and in its neighbouring countries, where a number of EMD locomotives are already operational.
It is emerging at a time when South Africa’s State-owned freight logistics group Transnet has indicated that it intends making significant railways investments.
The utility is planning to purchase some 1 000 new diesel and electric locomotives, valued at around R35-billion, over the coming seven years as part of a larger R300-billion investment into the country’s railways, ports and pipelines infrastructure.
Future locomotive purchases are expected to be pursued on a so-called ‘fleet’ basis, partly to ensure high levels of local content. But the acquisitions will still be conducted through open tender processes.
Progress Rail and EMD CE Billy Ainsworth describes Africa as an important market and says the new business will ‘offer a complete range of rail services’ to customers in the territory.
Barloworld CE Clive Thomson says the venture into rail is consistent with Barloworld’s strategy to ‘invest in identified growth sectors’.