The newly rebranded engineering services unit within State-owned freight logistics group Transnet is aiming to increase its third-party sales to railways customers to R6-billion a year by 2018/19 and is also moving to add ports and pipelines equipment to its production repertoire.

Previously known as Transnet Rail Engineering, the division has been rebranded as Transnet Engineering (TE) to reflect the fact it now also has engineering responsibility for ports and pipelines equipment.

CEO Richard Vallihu tells Engineering News Online that TE’s non-group orders rose to R850-million in 2012/13 and have been increasing at a yearly rate of more than 10% over the past five financial years.

Over the full horizon of Transnet’s seven-year market demand strategy (MDS), during which the group plans to invest R300-billion in the upgrade and expansion of its railways, harbours and pipelines operations, TE’s internal sales are likely to rise to R12-billion a year.

The majority of these sales relate to locomotives and wagons, which are being produced by TE’s 14 000 employees for Transnet Freight Rail at the division’s six factories around the country. Over the past five years, the division has invested at a rate of around R500-million to modernise its assembly facilities.

TE is assembling General Electric’s Class 43-000 locomotives at its largest workshop in Koedoespoort, north of Pretoria, and is gearing up to assemble electric locomotives being procured by Transnet from China South Rail.

It will also be the assembly and technology-transfer partner for the original-equipment supplier of 599 new dual-voltage electric locomotives and 465 new diesel locomotives. Transnet has delayed the release of the two tenders in a bid to secure price and localisation alignment with National Treasury requirements.

In addition, TE has been identified as the assembly partner for Gibela Rail Transportation, a consortium comprising French multinational Alstom and local engineering company Actom, which will supply 3 600 passenger trains for the Passenger Rail Agency of South Africa (Prasa).

In terms of the R51-billion contract terms, Gibela will need to supply the coaches over a ten-year period, from 2015 to 2025.

However, Vallihu says there has also been a strong pick-up in orders, particularly for wagons, from various African customers.

The largest order has arisen from Botswana Rail, which is purchasing 562 wagons for the transportation of salt from Sua Pan, in Botswana, to customers in South Africa.

TE has also received strong mining-related orders from customers such as Rio Tinto, which is using the wagons to transport coal from it operations in Mozambique. In addition, the unit has received a steady flow of orders for the supply of refurbished locomotives from a number of utility and mining customers in the rest of Africa.

AFRICAN LOCOMOTIVE

Vallihu reveals that TE is in the final stages of developing the prototype of its own ‘Trans-Africa Locomotive’, which has been designed to meet African customer requirement for a robust, Cape-gauge locomotive suitable for short-haul shunting.

Product details remain “under wraps”, but Vallihu is optimistic that the locomotive will play a key role in raising its third-party sales towards the R6-billion target over the MDS period. Such sales will be required to sustain the business as orders from within the larger Transnet group begin to plateau.

The division is planning to invest up to R1-billion over the coming six years on research and development activities in collaboration with the Council for Scientific and Industrial Research and others. It could also eventually emerge with a “flagship” African port-equipment product, with TE already eyeing the rubber-tyred gantry crane market.

To support this product-development thrust, TE is seeking to attract the “best and brightest” engineering graduates and is also ramping up its internal training efforts.

It is currently training 2 000 technicians yearly at its 18 in-house training colleges. The organisation is able to absorb about 500 of these students every year, with the balance available for recruitment by other companies seeking individuals with technical qualifications.

Government is keen for TE to train at an even higher rate in a bid to help deal with the country’s dearth of technical talent and its academy recently secured R175-million from the Department of Higher Education and Training to raise its capacity to train 3 000 technicians yearly.

“With our exciting pipeline of work arising from Transnet, Prasa and external customers, we believe TE is emerging as an employer of choice for young engineering graduates,” Vallihu enthuses.