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Jan 10, 2012

Transnet boosts locomotive manufacturing capacity, confirms new order for 43 more GE units

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Transnet CEO Brian Molefe, Transnet Rail Engineering CE Richard Vallihu and GE Africa president and CEO Jay Ireland on the significance of the latest acquisition to South Africa's locomotive manufacturing capacity. Camera Work: Nicholas Boyd. Editing: Darlene Creamer.
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State-owned freight logistics group Transnet has concluded a 'follow-on’ agreement with General Electric (GE), of the US, for a further 43 diesel-electric locomotives, over-and-above the 100 already being purchased under a deal concluded in 2009. No contract value has been disclosed, owing to a confidentiality agreement between the two companies.

The 143 locomotives will be introduced to the Phalaborwa-Richards Bay corridor (53), the Sishen-Saldanha iron-ore corridor (30), the Witbank-Nelspruit-Komatipoort line (32) and to transport coal to Eskom power stations (28).

The 43 Class 43-000 locomotives are to be built by Transnet Rail Engineering (TRE) at its workshops in Koedoespoort, north of Pretoria, and will include higher local content levels than those achieved with the first batch.

Transnet chairperson Mafika Mkwanazi indicated at a function at the Koedoespoort facility that the deal further consolidated TRE as a potential original equipment supplier of locomotives for third parties, including other African and international railways businesses. A non-group sales target of R1-billion has been set for TRE.

TRE already supplies wagons and offers maintenance services to non-group customer, but is now looking to become a significant manufacturing hub for locomotives.

LOCOMOTIVE HUB

Besides its GE relationship, which has reportedly already generated enquiries from the rest of Africa, as well as from Queensland, Australia, TRE CE Richard Vallihu tells Engineering News Online that the company is also working on a TRE locomotive design, which is being tailored to suite conditions prevailing in a number of African markets.

About R70-million has been invested to create the facilities needed to produce "world-class" locomotives and Vallihu said efforts are also being made to increase TRE’s internal research and product development capacity.

This vision is receiving strong support from Public Enterprises Minister Malusi Gigaba, who is keen for State-owned companies, such as Transnet, to use their infrastructure budgets to support the development of local industry, which could eventually also supply markets outside of South Africa.

ENLARGED PIPELINE

He also reiterated his desire for Transnet to enlarge its capital programmes beyond the R110-billion pipeline already approved for the coming five years. He says it is premature to offer details, but stresses that the increase will “not simply be handsome, but beautiful”.

An upscaled pipeline, Gigaba indicates, should create even more opportunity for industrialisation in line with the recently concluded ‘Local Procurement Accord’, under which government, business and labour set an aspirational goal of procuring 75% of their needs from local industry.

CEO Brian Molefe indicated that more than 65% of the latest GE contract value could be considered to be local content as framed by government’s Competitive Supplier Development Programme, which covers aspects such as localisation of parts and production, skills transfer and development, technology transfer, industrialisation, social investment and job creation. In total 337 new jobs would be created as a result of the contract.

The level of localisation in the 43 locomotives has also been increased to 29.8%, as compared with 20.3% for the first 100 units, with the first ten having been manufactured and assembled at GE's facilities in Erie, Pennsylvania, in the US, and delivered between January and April last year.

The balance of the Class 43-000 locomotives will be assembled by TRE at the Koedoespoort facilities, at a rate of one every three days, with the first 28 locally produced units having already been delivered to Transnet Freight Rail (TFR).

TRE has geared up for the assembly by sending 60 employees to GE facilities in the US, Mexico and Australia, while GE sent technical services teams to South Africa to oversee the establishment of the facilities required to produce the units.

GE Africa president and CEO Jay Ireland says the relationship has enabled the US group to create a manufacturing “foothold” in Africa, which should improve its ability to compete for rail opportunities across the continent. He also indicates that GE may seek to replicate the localisation model achieved with TRE in other African countries.

VOLUMES TARGET

The diesel-electric units are based on GE's 3 300-hp, fuel-efficient C320-ACi technology platform, designed by GE Transportation Systems and Ireland says the locomotives will improve TFR’s hauling capacity, while reducing emissions.

TFR COO Mlamuli Buthelezi reports that the locomotives are already helping to bolster the performance, with two locomotives being used on 70-wagon trains. Hitherto, TFR has required five locomotives to operate 50-wagon trains.

Therefore, Buthelezi is confident that TFR will meet its 200-million ton target for 2011/12, which would be a 9% improvement on the previous year. In fact, he indicates the business is on track to move up to 72-million tons of coal and 54-million tons of iron-ore by March 31.
 

Edited by: Creamer Media Reporter
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