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New Rolling Stock Procurement Programme, South Africa

8th May 2015

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

  

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Name and Location
New Rolling Stock Procurement Programme, nationwide, South Africa.

Client
Passenger Rail Agency of South Africa (PRASA).

Project Description
The Department of Transport, through PRASA, is to invest in a new rail rolling stock fleet-renewal programme across South Africa.

The programme will upgrade and expand the current rail infrastructure by introducing new stock for commuter rail service Metrorail and by offering more routes between destinations in South Africa.

The aim is to replace the old fleet, which has reached the end of its design life.

As part of the procurement programme, PRASA aims to upgrade and construct fully functional modern maintenance depots at Braamfontein, Wolmerton, Salt River, Durban Yard and Springfield, which will support and service PRASA’s new metro trains by the time the first new train sets are delivered in the first quarter of 2015. The new depots will meet maintenance demand of the new, increased fleet and PRASA’s existing metro trains, until 2034.

The modernisation will mainly consist of the refurbishment or upgrade of selected existing buildings, the construction of additional operational buildings and the reconstruction of the staging yards. The initial phase of the works will include the demolition of selected buildings in preparation for the upgrade.

The upgrade will result in the introduction of the following technologies at the depots to optimise operational efficiencies:
• a new in-floor lifting system (synchronised retractable train-lifting jacks);
• a new universal lifting system, which allows for the synchronised lifting of different types of trains;
• an underfloor wheel lathe, which enables wheel-set profiling on site; and
• yard signalling, to allow for the efficient control of train movements within the yards.

Value
R123-billion.

An extra R14.5-billion will be invested in signalling, new depots, modern stations and integrated ticketing.

Duration
The 20-year procurement process will comprise two periods – the first ten-year contract will run from 2015 and the second from 2025.

The first new trains are expected for delivery in 2015.

Latest Developments
Construction on the Dunnottar plant, on the East Rand, which was initially scheduled to start in February, has not started.

PRASA is to secure the land and hand over the site to Gibela.

“We are close to starting construction . . . I can not say exactly when this will happen,” says Gibela CEO Marc Granger. Gibela has been appointed to deliver 600 new X'Ttrapolis Mega commuter trains to State-owned Metrorail operator PRASA, in a deal valued at R51-billion.

Granger notes that Gibela and PRASA are aware that a ten-month waiting period – from the signing of the contract to the start of construction – will “be a challenge”, owing to the complexity and number of parties involved in securing the site.

He says Gibela is not concerned about the delay.

It was reported that Gibela is to deliver the first South African made train by June 2017.

Production of the first train, in Brazil, is continuing according to schedule, says Granger.

The train is being built by Gibela’s majority shareholder, Alstom Transport, at the Lapa manufacturing plant.

The South American site will produce the first 20 trains while the South African facility is being established, which requires “an intense skills and technology transfer”, says Granger.

The first car of the first Brazilian train has progressed from manufacturing to testing, with PRASA executives able to “see and touch” the rolling stock in April.

The first train is scheduled to arrive in South Africa in November this year, after which it will be tested at a PRASA site for a six-month period.

It is scheduled to start service in June 2016.

Meanwhile, Granger has said that the technology gap between South Africa’s rail industry and the global industry is “very significant”, with “very few” existing black companies active in the local rail environment.

While the first 20 X'Ttrapolis Mega commuter trains will be produced in Brazil, the remaining 580 will be built at Dunnottar, with the last train scheduled for delivery in 2027.

The project demands a high level of content from local suppliers, with a specific emphasis on procurement from black-owned companies.

The technology to which Granger refers in “technology gap” includes products, materials and complexity, as well as industrial efficiency and competitiveness.

It is about the industrial capability to deliver “the right product at the right quality and at the right time”.

The manufacturing rate required to make the number of trains the PRASA contract requires is “at the top of what the most experienced large original-equipment manufacturer is able to do at its best [global] manufacturing unit”, Granger has told Engineering News Online.

“We need to put together thousands of parts coming from hundreds of suppliers. If one part is missing, production stops.

“We will buy massively, but we will buy from suppliers that will deliver at the performance we need from a quality point of view, and from a time delivery point of view.”

Granger regards the pricing negotiated by PRASA in the rolling stock deal as “very aggressive”, which means there is no room to pay a premium for locally made parts.

This means that South African component suppliers will have to ensure they are competitive on an “open, global market”.

Should these companies be able to do so, there is nothing that stops them from also supplying their goods to the global rail network, says Granger.

He adds that Gibela is “committed” to meet its targets, despite the technology gap that exists.

Gibela has designed a specialised programme to select the suppliers it requires to “be as transparent and realistic as possible”.

To date, 1 300 people have participated in Gibela’s supplier days.

Granger says Gibela will place a large number of contracts with tier-one suppliers, which will, in turn, procure their goods from tier-two and tier-three suppliers.

“Gibela will buy more systems and subsystems than individual parts.”

Gibela currently employs 100 people. This number is to grow to 500 in 2016.

PRASA was not immediately available for response at the time of this publication.

Key Contracts and Suppliers
KPMG, Gibb Engineering and Science, Interfleet Technology and Edward Nathan Sonnenbergs (ENS – feasibility study) and Gibela Rail Transportation, comprising Alstom and its black economic-empowerment equity partners (Phase 1 – rolling stock supply contract) and Siyahamba Engineering (manufacture of drivers’ cab doors for the first 200 PRASA trains); Columbus Steel (coils and sheets for the first 20 passenger train sets); and Vossloh (40 locomotives).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
PRASA, Moffet Mofokeng, tel +27 12 748 7000 or email momofokeng@prasa.com.
KPMG corporate finance Walter Meyer, tel +27 21 408 7220 or email market.engagement@kpmg.co.za.
Gibb Engineering and Science, tel +27 11 519 4600 or fax +27 11 807 5670.
Interfleet Technology, tel +44 1332 223000 or fax +44 1332 223001.
ENS, tel +27 11 269 7600, fax +27 11 269 7899 or email info@ensafrica.com.
Alstom, tel +27 11 518 8100.
Gibela, Pamella Radebe, tel +27 11 518 8232 or email pamella.radebe@gibela-rail.com.
Siyahamba Engineering, tel +27 11 824 2183 or fax +27 11 824 3627.
Columbus Stainless, tel +27 13 247 9111 or fax +27 13 246 1681.
Vossloh, tel +49 23 92 52 608 or email presse@ag.vossloh.com.

Edited by Creamer Media Reporter

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