http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.34Change: -0.05
R/$ = 12.15Change: 0.01
Au 1188.90 $/ozChange: 0.40
Pt 1112.00 $/ozChange: -4.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
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 Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
May 19, 2011

Govt wants Transnet to more than double local content of new locos

Back
Public Enterprises Minister Malusi Gigaba on South Africa's plan to partner with rail equipment manufacturers in developing the country as a global rail engineering hub. Camera Work: Nicholas Boyd. Editing: Shane Williams (19/5/2011)
Public Enterprises Minister Malusi Gigaba on the need to find new ways of funding the development of South Africa's commodity export corridors. Camera Work: Nicholas Boyd. Editing: Shane Williams (19/5/2011)
previous next
 
 
 
 
 
Engineering|Africa|CoAL|Components|Diesel|Eskom|Export|GE|General Electric|Locomotives|Mining|Ports|PROJECT|Projects|Renewable Energy|Renewable-Energy|Resources|Road|System|Transnet|Africa|Energy|Equipment|Logistics|Maintenance|Manufacturing|Products|Services|Solutions|Infrastructure|Iron Ore|Iron-ore|Power|Locomotive|Locomotives|Diesel
Engineering|Africa|CoAL|Components|Diesel|Eskom|Export|GE|General Electric|Locomotives|Mining|Ports|PROJECT|Projects|Renewable Energy|Renewable-Energy|Resources|Road|System|Transnet|Africa|Energy|Equipment|Logistics|Maintenance|Manufacturing|Products|Services|Solutions|Infrastructure|Iron Ore|Iron-ore|Power|Locomotive|Locomotives|
engineering|africa-company|coal|components|diesel-company|eskom|export|ge|general-electric|locomotives|mining|ports|project|projects|renewable-energy|renewable-energy-company|resources|road|system|transnet|africa|energy|equipment|logistics|maintenance|manufacturing|products|services|solutions|infrastructure|iron-ore|iron-ore-person|power|locomotive|locomotives-product|diesel
© Reuse this



South Africa's State-owned freight logistics group Transnet, which plans to materially expand and modernise its diesel and electric locomotive fleet over the next 15 years, has been set a target of more than doubling the level of local content in these vehicles - hitherto, the local content levels for locomotive procurement projects has been modest at between 20% and 40%.

Public Enterprises Minister Malusi Gigaba foresees particular opportunity for partnerships with suppliers of heavy-haul electric locomotives and says Transnet, which has a R110-billion capital expenditure programme for the coming five years (much of which will be directed towards rail), will enter dialogue with original equipment manufacturers (OEM) to explore localisation prospects.

"Our plan is to partner with the relevant OEMs to build South Africa's own locomotive manufacturing capability," Gigaba said in an address to the South African Chamber of Commerce and Industry. "Our aim is to more than double the quantity of local content embodied in the locomotives."

He has highlighted the recent R2,4-billion deal between Transnet and General Electric (GE), whereby Transnet Rail Engineering (TRE) will assemble 90 of the 100 diesel locomotives being purchased in South Africa.

The first locomotives are to be delivered this year and the last during 2012.The GE deal is also the biggest commitment by Transnet under the government-led Competitive Supplier Development Programme.

The idea will be to position South Africa as a niche engineering hub for specialised rail solutions and as a global manufacturing centre for OEM locomotive components.

There is also a near-term prospect of offering these products and services to other African countries that are also looking to expand their rail infrastructure. Further, there is potential to transform TRE, which currently mainly services Transnet Freight Rail, into a maintenance and repair centre for African rail utilities, as well as private operators.

Gigaba reveals that there will also be a concerted programme to unlock new sources of finance for the expansion of the country's freight rail network, particularly those corridors that could stimulate mining investment and expansions.

He acknowledges that Transnet's balance sheet presents an obstacle to tapping the post-crisis commodity revival, and reaffirms that a task team has been established to find ways to liberate developmental and commercial finance, as well as to enable miners themselves to share project risk as coinvestors. The team includes directors-general from the Departments of Mineral Resources and Public Enterprises, as well as representatives from the State-owned enterprises and the Chamber of Mines.

"We need new sources of finance to enable a quantum jump in the rate of investment in the capacity of these [iron-ore and coal] export corridors," he asserts, adding that equity and quasi-equity arrangements are being explored.

The immediate thrust, however, is on lowering the average age of Transnet's locomotives from over 33 years, as well as ensuring that sufficient locomotives and wagons are available to raise daily train movements from 680 to the network's potential of 1 700 trains a day.

No private sector participation deals have been struck, with the Minister indicating that these are still in the "planning" phase. He also indicates that the initial developments will probably focus on branch lines, partnerships designed to shift freight from road to rail and initiatives to reduce congestion around South Africa's key ports.

PRIVATE SECTOR & POWER

Gigaba also stresses that localisation, as well as private sector participation will increasingly feature in the electricity milieu, still dominated by State-owned Eskom, which is spending R549-billion on generation, transmission and distribution investments.

Private participation will initially be focused on the deployment of renewable-energy solutions and Gigaba assures that government is committed to ramping up the role of independent power producers (IPPs).

At present, there are only five IPPs operating in South Africa, but South Africa’s stated policy is for 30% of all new generation capacity to be delivered by private developers.

However, there are still several regulatory and legislative impediments, notwithstanding the recent publication of the integrated resource plan for electricity, which outlines a substantial role for IPPs in the roll-out of 37 300 MW of new capacity between 2010 and 2030.

Gigaba assures that the National Treasury and the National Energy Regulator are making independent progress on dealing with the constraints to investment, while work is also advancing in the creation of an independent system and market operator, which will evolve over time and will eventually be separated entirely from Eskom.

 


 

Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
 
Latest News
Updated 1 hour 24 minutes ago All grades of petrol will increase by 47c/ℓ on Wednesday, the Department of Energy announced on Friday. The reef price for unleaded 93 and LRP petrol was currently standing at R12.61/ℓ, while unleaded 95 cost R12.89/ℓ.
Updated 1 hour 26 minutes ago JSE-listed Tower Property Fund has acquired the Link Hills Shopping Centre, in Waterfall, KwaZulu-Natal for R160.9-million from The Sabre Trust and Matlu Family Trust. The shopping centre, on Inanda Road, was situated in an upper-high-growth residential area, next to...
Updated 1 hour 33 minutes ago South Africa recorded a trade deficit of R2.51-billion ($207-million) in April from a revised shortfall of R9-million in March, data from the revenue agency showed on Friday. Exports fell by 7.5% to R84-billion, while imports were down 4.8% to R86.5-billion on a...
More
 
 
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
 
 
 
 
 
This Week's Magazine
While strongly welcoming the promulgation of the new Part 101 of South Africa’s civil aviation regulations, governing the commercial operation of civil remotely piloted aircraft (RPAs) in South Africa, the Commercial Unmanned Aircraft Association of Southern Africa...
LSM Distributors has contracted engineering consultancy WSP | Parsons Brinckerhoff Africa to undertake the R100-million restoration of the 54-year-old Kyalami racetrack, situated in Midrand. The restoration will assist in re-establishing it as a venue for...
South African Defence Minister Nosiviwe Mapisa-Nqakula has expressed the hope that the defence budget will be significantly increased over the next five years. She did so while addressing the media in her recent budget vote media briefing. The 2015/2016 defence...
The African Development Bank (AfDB) has been an implementing agency for the Global Environment Facility (GEF) since 2008. The relatively young portfolio has 28 projects over 30 countries on the continent according to the 2014 AfDB and GEF annual report released...
PAUL SPEAR Training and development should be an integral and proportionate part of the long-term strategy of all companies, regardless of their size
Investment in South African youth through apprenticeships and learnerships will not only create direct benefits for businesses but will also contribute significantly to job creation and socioeconomic transformation in the country.
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
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
 
 
Close
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