Name and Location
Transnet Freight Rail (TFR) 1 064 locomotives acquisition programme, South Africa.

Client
TFR.

Project Description
The project involves the acquisition of 1 064 locomotives – 599 electric and 465 diesel – for TFR's General Freight Business unit by 2018.

Contracts for the project have been awarded to consortiums led by four major international locomotive manufacturers – General Electric (GE), China North Rail (CNR), China South Rail (CSR) Zhuzhou Electric Locomotive and Bombardier Transportation (BT). GE South Africa Technologies will supply 233 diesel locomotives; CNR Rolling Stock South Africa (CNR RSSA) 232 diesel locomotives; CSR Zhuzhou Electric Locomotive 359 electric locomotives; and BT South Africa (BTSA) 240 electric locomotives.

The contracts have strict local-content requirements of 40% each, with only 70 locomotives to be internationally produced, and the remainder at Transnet Engineering’s (TE’s) Koedoespoort and Durban facilities, in Gauteng and KwaZulu-Natal respectively.

Value
R50-billion. Transnet has to date secured 92% of the funding required for its 1 064 programme.

Transnet announced in March that it had secured two funding agreements, worth a collective R13-billion, with the Export-Import Bank of the US and Canadian export credit agency Export Development Canada, in support of TFR’s acquisition of diesel and electric locomotives from GE and BT.

The US Export-Import Bank agreement entails a 14-year, R6-billion guarantee being extended to Transnet for the acquisition of diesel locomotives from GE. The guarantee assisted TFR in raising funds from South African financial institutions – R2.25-billion from Absa/Barclays, R2.25-billion from Standard Bank and R1.5-billion from Old Mutual.

Export Development Canada provided TFR with a 13-year, R5.24-billion loan facility, which, together with a R1.75-billion loan from South Africa’s Investec Bank, will be used to acquire 240 electric locomotives from BT.

These locomotives will be assembled at TE’s Durban facility.

Duration
One-hundred-and-forty-eight locomotives will be delivered in 2016, 492 in 2017 and 424 in 2018.

Latest Developments
Transnet has reported that 23 of the 359 electric locomotives being supplied by CSR Zhuzhou Electric Locomotive have been delivered ahead of schedule.

Six out of the 233 diesel locomotives being supplied by GE South Africa Technologies have also been delivered ahead of schedule.

The design freeze on 232 diesel and 240 electric locomotives has also been achieved.

Key Contracts and Suppliers
GE South Africa Technologies (supply of 233 diesel locomotives); CNR RSSA (232 diesel locomotives); CSR Zhuzhou Electric Locomotive (359 electric locomotives); and BTSA (240 electric locomotives).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Transnet, tel +27 11 308 3000, fax +27 11 308 2638 or email enquiries@transnet.net.