Photo by: Duane Daws
Freight logistics utility Transnet signed a memorandum of understanding (MoU) with locomotives manufacturer CSR Zhuzhou Electric Locomotive (CSR) on Thursday, which could open the way for manufacturing investments by the Chinese group in South Africa.
CSR, which produces electric locomotives, is one of the four manufacturers selected by Transnet as part of a R50-billion contract for the delivery of 1 064 electric and diesel locomotives for the group’s general freight business. The other three suppliers are the CNR Corporation, also of China, Germany-based Bombardier Transportation and General Electric, of the US.
CSR was awarded a contract to supply 359 electric locomotives at a contract value of R14.6-billion, excluding hedging and escalation costs. Prior to the award, CSR was also contracted to supply 95 Class 20E locomotives to Transnet, with an estimated price tag of R2.7-billion.
The MoU was signed in Beijing by Transnet CEO Brian Molefe and CSR president Zhou Qinghe and witnessed by Chinese President Xi Jinping and President Jacob Zuma, who is on a State visit to the country.
The areas of possible cooperation outlined in the MoU included:
- The setting up of manufacturing plants in South Africa;
- The establishment of a research and development facility;
- Joint initiation and development of business opportunities in Africa;
- Skills transfer, including establishment of a training centre in South Africa; and
- Setting up a refurbishment and manufacturing plant.
Initially, Transnet would make available its manufacturing facilities in South Africa, while the Chinese firm would provide the technology. CSR would enter into a joint venture with Transnet and the new entity will be based in South Africa.