Public Enterprises Minister Malusi Gigaba hinted to an even larger locomotive investment programme to follow the current R35-billion, 1 064 procurement process being pursued by State-owned freight logistics group Transnet.
Transnet recently issued tenders in July for 599 electric locomotives and 465 diesel units, which it aimed to introduce to its general freight business between 2013 and 2019. The State-owned company aimed to have both contracts in place by the end of its current financial year, which runs to March 31, 2013.
Speaking at the inaugural US-South Africa Business Summit, in Johannesburg, Gigaba said the procurement laid a platform for a seven-year strategic partnership between Transnet and locomotive suppliers.
“We expect to more than double the amount of national content in locomotives during the course of the process and expect the scale of the procurement to increase in the second phase of the procurement in seven years time,” Gigaba said.
South Africa remained welcoming of multinational original-equipment manufacturers with US origins, particularly those that plan to make direct investments and are open to integrating South African firms as part of their global supply chains.
“We do not want you to limit your manufacturing activities to the infrastructure supply sector, but also to include other significant sectors such as mining equipment supply. We would like to see you make South Africa the design and manufacturing hub for your regional activities,” Gigaba said.
State companies looking to buy complex capital equipment would focus on three different dimensions of value, “which means that we are procuring equipment, we are procuring an industry and supplier development process and we are procuring a process of addressing the racial and class inequalities in our economy”.