Africa is a big potential growth market, given the urbanisation occurring on the continent, and winning the tender for the Passenger Rail Agency of South Africa’s (Prasa’s) fleet renewal programme would be a key milestone for the company, Alstom Transport president Henri Poupart-Lafarge told South African journalists during a media visit in Berlin last month.
He noted that, if successful, this would enable Alstom Transport to establish a base in South Africa from where it could eventually serve the rest of Africa.
Poupart-Lafarge noted that the R123-billion Prasa tender, which was aimed at the procurement of 7 224 new commuter coaches over 20 years in two ten-year contracts, and for which bids closed at the end of September, was a complex tender for both Alstom and South Africa, given the 65% localisation target.
Nevertheless, he believes Alstom has proved it is serious about localisation and technology transfer.
Alstom again reiterated its successful localisation strategies in other emerging econo- mies, including Brazil, Russia, India, China, Morocco, Algeria and Kazakhstan.
Further, Poupart-Lafarge said that, while Alstom was used to complex tenders, this was a particularly complex one, especially given the black economic-empowerment (BEE) requirements, which were expected to be announced by Prasa at the end of September.
BEE investors were expected to obtain a 30% equity interest in a project company that would be established to manufacture the passenger coaches.
Meanwhile, Alstom Transport was also planning to participate in Transnet Freight Rail’s (TFR’s) tender to procure 599 new dual- voltage electric locomotives for its general freight business by 2019. TFR’s tender is also subject to a localisation target of 60%.
Poupart-Lafarge stated that, if Alstom Transport failed to secure either of these tenders, it would be difficult to enter the South African market, given the size of the domestic rail market.
He noted that the company would have to ensure that there was an adequate economic incentive to establish a base in South Africa.
Meanwhile, Alstom Transport senior VP for North and Central Europe and Africa Andreas Knitter agreed that securing a substantial order in South Africa would enable the company to make further inroads into the rest of sub-Saharan Africa.
There was good opportunity in the region, but entry into that market would not be quick and not of the same magnitude as in South Africa, he said.
Poupart-Lafarge said marketing very high-speed rail offerings to the South African market was not a priority for Alstom Transport at this stage.
He indicated that the distances between most of South Africa’s major cities made it unfeasible to launch such services, as it was best to limit high-speed transport between two cities to three hours.
Meanwhile, Alstom Transport also hosted South African journalists at one of its largest manufacturing factories, in Salzgitter, Germany.
The 200 000 m2 factory employs between 2 400 and 2 500 staff and produced about 140 trainsets, with on average four cars per trainset, in 2010. This will increase to about 210 trainsets a year over the next three years.
The Prasa tender will require the manufacture of about 360 cars a year.
The factory also produces about 1 000 bogies a year and undertakes the repair of about 3 600 freight locomotives a year.
Most manufacturing processes in the train manufacturing sector are not conducive to auto- mation, given that only a limited number of the same components are reproduced for any given contract.
Further, machines are not precise enough to achieve the required tolerances.
This means that a high number of skilled individuals, including welders, are required to work in such factories.