Public Enterprises Minister, Mr Malusi Gigaba, sealed an agreement for Transnet SOC Ltd’s purchase of an additional 43 locomotives from General Electric’s (GE) local arm, General Electric South Africa Technologies (GESAT). The agreement takes the total number of locomotives Transnet has bought from the manufacturer to 143.
Mr Brian Molefe, Transnet Group Chief Executive and Mr Jay Ireland, GE Africa president and CEO, marked the signing of the agreement at Transnet Rail Engineering’s (TRE) manufacturing facility in Koedoespoort, East of Pretoria.
TRE is the manufacturing, engineering and rolling stock maintenance division of Transnet.
In terms of the agreement, GESAT will supply Transnet’s rail freight division, Transnet Freight Rail (TFR), with 43 C30ACi diesel-electric locomotives. The locomotives are to be deployed on TFR’s various lines throughout the country especially, the General Freight Business.
Commenting on the purchase, Mr Molefe says: “The acquisition of these locomotives is part of our fleet renewal programme – a key element of our R110 billion 5-year capital investment programme. Improving the average age of our assets is crucial in our efforts to improve our reliability, efficiency and our ultimate goal of running a scheduled railway.”
In February last year, Transnet and GE announced that they had reached an agreement for the purchase of 100 locomotives - 90 of which were to be manufactured at TRE’s Koedoespoort facility. Production is ongoing and on schedule. To date 27 locomotives have already been delivered and operating. The first 10 were manufactured at GE’s plants in the United States.
The C30ACi is the first AC diesel electric locomotive to be introduced in sub-Saharan Africa. These locomotives, which will be used to haul freight and coal, will decrease life-cycle costs, improve fuel efficiency and reduce emissions.
Speaking shortly after the signing, Minister Gigaba said: “This purchase signifies our commitment to improving efficiency on the railways and therefore strengthening South Africa’s logistics chain – the backbone of our economy. Crucially, this agreement and its predecessor have confirmed Transnet as a bellwether in our efforts to use the different fleet renewal programmes, especially by state-owned entities, to boost our manufacturing, engineering and development of local industries.”
Encouragingly, and in line with Transnet’s continued commitment to using its rolling 5-year capital investment programme to meet the objectives of the Competitive Supplier Development Programme (CSDP), GE committed to stringent localisation, industrialisation, skills development, job creation/preservation and technology and intellectual property requirements.
CSDP, which constitutes just over 65% of the value of the latest purchase – building on the 52% achieved in the previous contract -, is a government initiative, pioneered by the Department of Public Enterprises, to encourage localisation of manufacturing, procurement from local suppliers, employment and skills development.
“Transnet is exploring various funding solutions to raise funding for the batch of 43 locomotives. These will include the possible utilisation of credit support from US Exim Bank, an Export Credit Agency (ECA), in line with our strategy of diversifying sources of funding,” concludes Mr Molefe.