A senior Department of Trade and Industry (DTI) official has “promised” that the department is giving focused attention to ensuring that the local-content targets associated with Transnet’s R50-billion locomotive procurement programme were met. Chief director for industrial procurement Dr Tebogo Makube acknowledges, however, that it is a “challenging terrain”.
The so-called ‘1064’ contract has been divided between General Electric South Africa Technologies and China’s CNR Rolling Stock South Africa, which will supply 233 and 232 diesel locomotives respectively, as well as CSR Zhuzhou Electric Locomotive and Bombardier Transportation South Africa, which have been contracted to supply 359 and 240 electric locomotives respectively.
Subsequent to the orders being placed in 2014, the two Chinese companies merged to form the China Railway Rolling Stock Corporation, but the contracts are still being monitored separately.
The stipulated thresholds for local production and content are 60% for electric locomotives and 55% for diesel locomotives, with various components, such as car body shells and bogie frames, to be fully localised from the start of the programme. Other components, such as traction motors and braking systems, will be localised progressively over a six-year period.
There have been several reports suggesting that not all the companies are making even progress in meeting their local-content commitments, which are “designated” under Section 9 of the Prefereantial Procurement Policy Framework Act.
Speaking at a recent DTI Economic Policy Dialogue in Johannesburg, Makube said a cluster had been set up within the DTI to oversee the delivery of local content associated with the rolling stock being procured by both Transnet and the Passenger Rail Agency of South Africa.
“We have been to Parliament with Transnet. We still have to report back, because questions have been raised,” Makube said, adding that it was also working with industry to ensure that the original-equipment manufacturers (OEMs) provided local companies with opportunities to supply.
“It’s a challenging terrain, but what I can promise is that we have the focus to ensure that it is being implemented.”
The DTI, he added, would work with the departments of Transport and Public Enterprises, as well as the Trade and Industry Portfolio Committee in Parliament to ensure the OEMs delivered on their commitments.