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Oct 05, 2012

Prasa to conclude fleet renewal 'as quickly as possible' – Montana

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Passenger Rail Agency of South Africa (Prasa) CEO Lucky Montana is positive the first train in Metrorail’s R123-billion fleet renewal programme can be delivered by 2014 or 2015.

“It’s an ambitious programme, yes,” he admits.

Prasa owns the Metrorail commuter service.

Prasa confirmed on Monday that seven companies and consortia had submitted bids to build and supply modern commuter trains. The bids were submitted following a request for proposals, which was issued on April 19 and closed on September 30.

CAF, of Spain; Bombardier, of Canada; China South Rail; China North Rail; Gibela Rail Transportation, which is a French consortium comprising Alstom and Actom; Dudula Rail, a consortium comprising ABB South Africa and Stadler of Switzerland; and CSR/Wictra, a consortium comprising CSR, of China, and Wictra of South Africa, are all competing to supply the commuter-rail utility with new rolling stock.

“Seven major companies responded,” says Montana. “We are determined to start evaluation of the bidders’ proposals so we may be able to announce the preferred bidder at the end of November.”

“Our team is focused on finding the partner with the right technology and maintenance plan, plus, they must have the right proposals on economic development, such as job creation. We must also revive the South Africa rail engineering sector.

“Financial close is scheduled for June, July 2013, and by next year we can start producing coaches. We want to conclude this as quickly as possible.”

Montana emphasises that Metrorail will not be “importing any trains”.

“We are making sure we build them in South Africa. We have put a 65% local requirement out there.”

Montana says “many companies” wanted Prasa to postpone the tender process to better prepare their bid submissions, but hebelieves that Metrorail can ill afford such as move.

“One-third of the fleet is between 46 years and 52 years old, and are due for retirement over the next four years. If we delay the process, Metrorail will not have new capacity in place before these trains retire, and the costs will be enormous.”

Montana says each new coach will have a lifespan of 40 years.

“If we do this right, then we can buy five trains as and when we need them, for example. Then we don’t need to do these big buys again.”

He also notes that 30% of the project has been marked down to allow for black economic empowerment.

Montana says Treasury has promised Prasa financial support to execute the fleet-renewal programme.

Looking at Metrorail’s funding model, he says “commuters are not expected to pay for the upgrade”.

He says the rail utility does not currently transport a large enough number of commuters to enable this, while most of Metrorail commuters are also low-income earners. He adds that Prasa’s balance sheet is not strong enough to fund the fleet renewal.

Montana says Metrorail’s funding will have to be sourced from government subsidies, as is currently the case, with another 15% added from the fare box, and the remainder flowing from the development of station properties.

“We are sitting on some valuable land. We must make sure we develop our Park, Pretoria and Cape Town stations, for example. Park station can become a valuable mixed-use development.”

Montana says he is hopeful Metrorail can “reach an understanding” about this funding model with government.

Edited by: Creamer Media Reporter
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