R/€ = 15.15Change: -0.14
R/$ = 14.27Change: -0.13
Au 1070.91 $/ozChange: -1.14
Pt 854.50 $/ozChange: 9.00
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?

And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters About Us
RSS Feed
Article   Comments   Other News   Research   Magazine  
Oct 17, 2012

Decoupling of BEE, technology bids will broaden beneficiary base – Prasa

Engineering|Actom|Africa|Alstom|Design|Export|Locomotives|PROJECT|rail|Rolling Stock|rolling-stock|Technology|Transnet|transport|Africa|Canada|South Africa|Spain|Switzerland|Equipment|Maintenance|Preferred Technology Supplier|Ben Martins|Lucky Montana|Sifiso Buthelezi|South Africa
Engineering|Africa|Design|Export|Locomotives|PROJECT|rail|Rolling Stock|rolling-stock|Technology|Transnet|transport|Africa||Equipment|Maintenance|||
engineering|actom|africa-company|alstom|design|export|locomotives|project|rail|rolling-stock|rolling stock|technology|transnet|transport|africa|canada|south-africa|spain|switzerland|equipment|maintenance|preferred-technology-supplier|ben-martins|lucky-montana|sifiso-buthelezi|south-africa-region
© Reuse this

The State-owned Passenger Rail Agency of South Africa (Prasa), which is at the beginning stages of a multibillion-rand fleet procurement process, has officially launched the black–empowerment portion of the project, through which a 30% role has been set aside for participation by black investors, workers and industrialists.

The broad-based black economic-empowerment (BBBEE) request for proposals (RFP) has been separated out from the tender for the design, manufacture and maintenance of new commuter trains for delivery from, 2015 and the BBBEE tender documentation is currently available for a fee of R5 000.

The process is being conducted in parallel to the main equipment tender, for which seven companies and consortia submitted bids by the September 30 deadline. These companies include CAF, of Spain; Bombadier, of Canada; China South Rail (CSR); China North Rail; Gibela Rail Transportation, which is a French consortium comprising Alstom and Actom; Dudula Rail, a consortium comprising ABB South Africa and Stadler, of Switzerland; and CSR/Wictra, consortium comprising CSR and Wictra, of South Africa.

The winning rolling-stock supplier would hold 70% of the project delivery company, with the BBBEE equity participants holding the 30% balance. The BBBEE partners would be subject to a three-year lock-in period.

Prasa chairperson Sifiso Buthelezi said the decision to separate out the BBBEE component was informed by the company’s desire to ensure a genuinely broad-based empowerment structure that was decoupled from the technology offering.

Under the scheme, Prasa would insist that 10% of the 30%, or 33% of what is available for empowerment equity, was to be held by an employee trust, to benefit staff below the senior management level. The balance would be divided between black businesses active in the rail industry (10%), passive black investors (7%) and an educational trust (3%).

CEO Lucky Montana acknowledged criticism of the separation, particularly by those suggesting that it would lead to a “forced marriage” between the winning rolling-stock supplier and the winning BBBEE bidder.

But he argued that there were sufficient legal and contractual instruments available to ensure that the preferred technology supplier and the preferred equity partner were able to forge a workable partnership around the project, which could ultimately involve an investment of R123-billion and the purchase of 7 200 passenger coaches by 2035.

In the first ten-year phase, which was the current focus, the National Treasury had set an affordability limit of R40-billion and the number of coaches delivered within that envelope was currently the subject of the competitive bidding process.

Montana stressed, too, that the 65% localisation stipulation would also provide considerable scope for black businesses keen to participate as suppliers to the Prasa fleet renewal programme.

Empowerment companies with existing relationships with the seven bidders would be eligible to participate in the BBBEE tender, but Prasa stressed that recognition of such associations would not be treated as exclusive arrangements.

A compulsory briefing session had been scheduled for November 1 and bids should be submitted by December 14. The evaluation and selection could be completed by January 31, after which the preferred equipment and BBBEE bidders would be given an opportunity to interface ahead of financial closure.

The preferred equipment supplier could be announced by the end of September and once the BBBEE partner was identified the two participants in the project delivery company would have until around mid-2013 to reach financial close.

It was also confirmed that Transnet Rail Engineering (TRE) would provide the facilities for the production of the passenger coaches and had also been designated in the tender documentation as the conduit through which all technology transfer would occur.

The idea was to use TRE as the platform for the creation of a local rail manufacturer, with the capacity to design, manufacture and maintain locomotives and passenger coaches for South Africa and for export. In return the Transnet subsidiary would be expected to invest in a customised facility at which the preferred Prasa bidder would manufacture and assemble the passenger coaches.

Transport Minister Ben Martins argued that there was an opportunity through the process to create a new “template” for the way in which government pursued empowerment deals – one that encouraged broad-based participation and was aligned to the country’s industrialisation ambitions.

Martins encouraged black business to participate in the tender, but also highlighted the opportunity arising for “black industrialists” to supply into the Prasa programme.

“It can’t be correct that, whenever black people participate in ventures of this nature they only do so by way of a certain percentage of shareholding . . . We have to see black individuals creating value in this country by becoming industrialists,” the Minister asserted.

Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines (150 word limit)
Other Transport & Logistics News
Updated 1 hour 39 minutes ago  Rail group Alstom announced on Thursday that it had signed an agreement to purchase 51% of South African rail company Commuter Transport & Locomotive Engineering (CTLE), for an undisclosed amount. CTLE, specialising in the modernisation of trains, was previously...
Updated 3 hours ago The Presidency on Thursday said that the government was in the process of “finalising” the appointment of a new SAA board. In a statement responding to queries about the role of Deputy President Cyril Ramaphosa in turning around loss-making parastatals, Ronnie...
Article contains comments
Latest News
Updated 45 minutes ago Business confidence has dropped by a full 15 points over the past year to reach its lowest level in five years, the latest Rand Merchant Bank (RMB)/Bureau for Economic Research (BER) Business Confidence Index (BCI) has shown. After falling from 43 to 38 in the third...
Updated 51 minutes ago JSE-listed beverage, food and nonperishable packaging manufacturer Nampak’s basic earnings a share rose 3% to 228.3c for the year ended September 30, from 221.7c the year before. The company also reported an increase in group revenue and trading profit of 13%, to...
Updated 1 hour 14 minutes ago As Parliament mulls the new regulatory framework to govern South Africa’s financial industry, the sector is preparing for its promulgation; however, it will require a complete “rethink” of the way regulators guide financial institutions. The tabling of the Financial...
Recent Research Reports
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
This Week's Magazine
Additive manufacturing, better known as 3D printing, has the potential to completely change the relationships between individual consumers, professional designers and manufacturers. So argued Loughborough University Reader in Computer Aided Product Design Dr Ian...
Airbus Defence and Space: Military Aircraft has highlighted that its A330 Multirole Tanker Transport (MRTT) has significant commonalities with the Airbus A330-200 commercial airliner, upon which it is based. The South African Air Force (SAAF) once operated a fleet of...
Financial services provider Nedbank launched the second edition of its Carbon Footprinting Guide earlier this month, which is aimed at demystifying carbon footprint approaches and help readers grasp the main concepts of carbon measuring, monitoring, reporting and...
This year marks the thirtieth anniversary of Caterpillar’s first backhoe loader. This also coincides with the worldwide release of its latest-generation F2 series backhoe loader, which was launched at supply chain services company Barloworld Logistics’ Big Dig Day in...
BARRY DWOLATZKY The CPD programme provides advanced skills required locally, and provides a stepping stone to Wits University’s Master of Engineering degree in software engineering
A shortage of software engineers is leading to fewer information technology (IT) projects in private and public sector organisations. This also places a dampener on the economy, as IT is an integral part of business and civil service, says University of Witwatersrand...
Alert Close
Embed Code Close
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96