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Industrial site for commuter-train assembly to be announced in August

Passenger Rail Agency of South Africa (Prasa) CEO Lucky Montana

Passenger Rail Agency of South Africa (Prasa) CEO Lucky Montana

Photo by Duane Daws

12th July 2013

By: Irma Venter

Creamer Media Senior Deputy Editor

  

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Passenger Rail Agency of South Africa (Prasa) CEO Lucky Montana “is confident” the agency will ink the deal for the procurement of 3 600 rolling stock units with preferred bidder Gibela Rail Transportation by the end of July.

Gibela Rail Transportation comprises French multinational Alstom and local engineering company Actom, and will welcome black economic-empowerment (BEE) partners later this year.

Montana says the two parties have already concluded talks on all major issues involving the ten-year R51-billion contract.

The first unit is expected to be delivered in 2015.

Montana says the deal will see the establishment of a new greenfields industrial complex at an as yet unnamed site, housing the rolling stock manufacturing plant, as well as a number of component suppliers and training facilities.

The announcement on the location of this site is expected in August.

Freight rail parastatal Transnet is set to play a pivotal role at this industrial park, as it is expected to participate in the local manufacturing process, notes Montana.

He adds that “government will assume the risk of the factory”, as it will remain a South African asset following the com- pletion of the Prasa contract.

Montana emphasises that the industrial complex is to become a hub for rolling stock manufacturing for Africa and the rest of the world.

Transport Minister Ben Martins adds that government “is not satisfied” that the new complex will only build trains for South Africa.

“We want to be sure South Africa is in a position to export all components used in train manufacture to the rest of the world. That is our medium- to long-term objective. We are on track and happy with the progress we are making.”

Alstom Transport president Henri Poupart-Lafarge says a facility such as the one envis- aged will provide the company with “a fantastic footprint” for doing business in South Africa, Africa and the rest of the world.

Project Funding
Prasa has already secured R40-billion in funding from government for the Gibela contract, which is expected to be the first deal in its more than R100-billion rolling stock renewal programme, says Montana.

The agency is currently locked in negotia- tions with the National Treasury to secure the remaining R11-billion, which is above the project’s R40-billion affordability limit set by the government purser.

Montana says he is confident Prasa will receive the remaining money from Treasury.

He believes it is “too expensive” for Prasa to raise the outstanding funding on the open market, owing to the agency’s balance sheet and passenger numbers.

Prasa is expected to make an announcement on the identity of Gibela’s BEE partners by the end of July, with BEE participation in the rolling stock programme expected to be more than 40%.

Local content on the new units, to be used on the Metrorail system, is expected to be around 70%.

Montana says the ten-year project will create 33 000 jobs.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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