Transnet has issued a formal request for proposals (RFP) to two shortlisted bidders that participated in an earlier request for qualification (RFQ) process relating to the creation of a railways rolling stock leasing entity, dubbed LeaseCo, as a public–private partnership.

The identities of the two bidders were not immediately released, with Transnet confirming only that the shortlisted bidders had been selected from among the 14 respondents to the April RFQ.

LeaseCo will be responsible for the acquisition, management, and leasing of rolling stock to domestic and regional markets and is being implemented as a private sector participation project involving Transnet Engineering.

“The private sector majority partner will bring capital, technical expertise and operational capability to revitalise, manage and expand the fleet,” Transnet said in a statement confirming the launch of the RFP.

Transnet reported in May that, owing to market demand from private train operating companies (TOCs), rolling stock assets had already been allocated for leasing by Transnet Engineering.

It also announced leasing agreements with five of the 11 TOCs that had received rail access agreements from the Transnet Rail Infrastructure Manager, or TRIM.

These leasing contracts would be transferred to LeaseCo once it was formally established.

“The business is structured as a commercially viable, independently governed leasing entity,” Transnet said, reaffirming that it would contribute a ring-fenced fleet of rolling stock assets as equity, as well as original equipment manufacturer capabilities through Transnet Engineering.

Engineering News has reported previously that some 500 diesel and electric locomotives and 17 000 wagons would be injected into LeaseCo, to be set up as a special purpose vehicle (SPV) following the appointment of the preferred bidder and once the transaction had reached financial close.

No timeframe has been provided by Transnet for the selection of the private partner and the creation of the SPV, however.

Transnet Group CEO Michelle Phillips said LeaseCo represented a transformative initiative primed to modernise Africa’s rail system, mobilise private capital, and enhance the reliability of freight logistics.

“With the significant demand from TOCs, LeaseCo is well positioned as an appealing investment opportunity,” she said.