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Jul 27, 2012

Transnet issues much-anticipated tenders for big locomotive acquisition programme

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State-owned freight logistics group Transnet has issued two large tenders for the procurement of 1 064 locomotives for its general freight business (GFB) – the acquisition programmes, which will be implemented between 2013 and 2019, could involve an investment of R35-billion.

In what is arguably the group’s largest- ever single tender, Transnet has issued a request for proposals (RFP) for the supply of 599 new dual-voltage electric locomotives. In addition, tenders have been invited for 465 new diesel locomotives.

Both RFPs will close at 10:00 on October 2, and both will attract a R40 000 nonrefundable tender charge. Formal compulsory site meetings for both tenders will be hosted at Transnet Freight Rail’s (TFR’s) head office in Parktown, Johannesburg, on August 16, and the RFP documentation will be available until August 10.

The large-scale tenders follow hot on the heels of a programme to procure 95 new electric locomotives, which will be delivered by the end of March 2014 – 45 during the group’s current financial year and a further 50 during the 2014 financial year.

A total of nine bids were received for that far smaller tender, which closed on April 17 and CE Brian Molefe said recently that the adjudication process was well advanced.

However, a number of locomotive suppliers have argued that the scale of the acquisition programmes should be increased to meet Transnet’s objective of securing both value for money and high levels of local content.

The group is currently achieving localisation levels of around 52%, an average that has been lifted materially by the 67% being achieved on a 'follow-on’ agreement with General Electric for 43 diesel-electric locomotives. These Class 43-000 locomotives are being assembled by Transnet Rail Engineering (TRE) at its workshops in Koedoespoort, north of Pretoria.

However, Molefe has reported that Transnet will insist on even higher levels of local content under its ‘fleet’ procurement model for the 1 000-plus new locomotives and that it also aims to use the acquisitions to build TRE into an original-equipment manufacturer.

TRE CE Richard Vallihu has reported that the unit is already working on an in-house locomotive design, which is being tailored to suit conditions prevailing in a number of African markets.

The locomotive acquisition programmes have also been coupled to a plan to introduce 19 400 new wagons between 2013 and 2019. In addition, TFR plans to add 112 Class 19E locomotives to the export coal line and a further 23 Class 15E and three diesel locomotives to the export iron-ore channel.

The locomotive and wagon investments form the largest components of the group’s R300-billion market demand strategy, which will seek to upgrade and expand Transnet’s rail, ports and pipelines businesses over a seven-year horizon.

A total of R201-billion will be invested into TRE, followed by the Transnet National Ports Authority (R47-billion), Transnet Port Terminals (R33-billion), Transnet Pipelines (R11-billlion) and TRE (R4-billion).

The rail investments are designed to increase the GFB unit’s yearly volumes capacity from 79.7-million tons to 170.2-million tons by 2019, raise export coal capacity to 97.5-million tons over the same period, increase the iron-ore export channel to 82.5-million tons and develop a new 16-million-ton-a-year manganese export channel.

During the year to March 31, GFB hauled 81-million tons, which was 9.9% higher than the 73.7-million tons achieved in 2011. Coal export volumes rose 8.8% to 67.7-million tons, iron-ore volumes rose 13.2% to 52.3-million tons and the number of containers moved by rail increased 21.5% to 762 700 twenty-foot equivalent units.


Edited by: Martin Zhuwakinyu
Creamer Media Senior Deputy Editor
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