South Africa’s Transnet Engineering (TE) is assembling 30 General Electric-branded C30ACi diesel-electric locomotives at it Koedoespoort facility, east of Pretoria, for African railways customers and has entered into a partnership with the US multinational to jointly market the solution across the region.

Transnet CEO Brian Molefe confirmed the orders at a briefing held to announce the extension of a R1.1-billion Nedbank loan (with a guarantee from US export credit agency Ex-Im) for 53 of the 143 C30ACi locomotives that have already been introduced into Transnet Freight Rail’s (TFR’s) fleet.

The 30 locomotives, he reported, would be built on the same production line that had been established to assemble C30ACi locomotives for TFR.

TE CEO Richard Vallihu said there was a “great deal of interest” in the product, with the initial locomotives “at various stages of completion”. There was also interest arising for some of TFR’s older locomotives, which were being refurbished and sold to customers across the continent.

The South African engineering services unit was aiming to increase its third-party sales to railways customers to R6-billion a year by 2018/19 – an aspiration that has been criticised by some private enterprises, which have expressed concern that the State-owned company could crowd out their efforts to penetrate the African market.

Speaking at the same event, GE South Africa president and CEO Tim Schweikert said the C30ACi was the first GE locomotive to incorporate the Cape Gauge standard, which was common to many parts of the region, together with the group’s latest traction technology.

“This product fits perfectly in places such a Mozambique, Angola and Botswana,” he said, adding that the association with TE was in line with its strategy to localise its products in key markets.

Producing at Koedoespoort, Schweikert stressed, also made sense from a quality, delivery and cost perspective, with the locomotives being operated by TFR achieving availability rates better than 96%. “That’s as good as any fleet that we have operating anywhere in the world.”

The revitalisation of South Africa’s locomotive manufacturing capacity was, in Molefe’s view, also critical to reinvigorating rail across the continent and he indicated that Transnet was willing to partner with other original-equipment manufacturers.

The group is currently in the process of procuring 95 dual-electric locomotives from China South Rail, which had completed a prototype that was currently being tested by TFR. The first 10 locomotives will be built in China, with the balance to be assembled in Koedoespoort.

1 064 LOCO UPDATE

In addition, Transnet was currently adjudicating bids for the supply of 599 dual-voltage electric locomotives and 465 diesel locomotives, which could involve an investment of around R35-billion.

Molefe said the group would “ideally” like to announce the outcome of its adjudication process for the procurement of 1 064 new locomotives “by Christmas”. However, he cautioned that the documentation associated with the proposed acquisitions was voluminous and that the group was, thus, officially aiming to announce the contracts only by the end of the group’s financial year, which ran to March 31, 2014.

The locomotive programme made up a significant portion of the group’s R307-billion, seven-year investment programme, with TFR rolling stock and infrastructure projects comprising 65% of the overall investment programme.

Molefe said he could not comment further on the adjudication for the sake of the integrity of the process. Bids were submitted on April 28, but the identities of the bidders have not been released, nor has the procurement value.

“The comprehensive capital expenditure programme is supported by a board-approved and shareholder-endorsed funding strategy. Although we are a State-owned company, we are proud to point out that our funding initiatives are on the strength of our financial position, and are not guaranteed by the fiscus,” he said.

Last year the group raised R14.6-billion and during the current year it intends raising R15.6-billion from a range of sources. To date, R10-billion has been secured.