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Transnet has inked a deal to purchase 95 locomotives from Chinese company, CSR Zhuzhou Electric Locomotive, to replace a portion of its ageing fleet.
Siyabonga Gama, the CEO of Transnet's Freight Rail business, said that the value of the deal was confidential but that an approximate number was R2.6bn.
According to the CSR website, which announced it had won the tender on 12 September, the deal was worth $400m which is closer to R3.4bn at current exchange rates.
The first batch of locomotives is to be delivered by December 2013 and the last batch by September 2014. The first 10 would be assembled in China while the balance would be made locally and supplied with a 30 month warranty and a separate six year warranty on the traction motors.
The locomotives will be a step down from what China South Railways is used to building, with the specifications including a dual voltage system (3kv DC/25kv AC) that will minimise change over times as they are used across different parts of the country's railway network said Transnet CEO, Brian Molefe.
CSR produces trains that are more than three times more powerful than those ordered by Transnet and have the capacity to produce 106 locomotives per month said Molefe who pointed to our narrow gauge railways and limited electricity supply as specific requirements that the Chinese company would have to adhere to.
The new locos would also be more energy efficient and have longer maintenance cycles said Transnet's press release.
Xu Zongxiang, the executive director and general manager of CSR Zhuzhou, said that the order would be relatively easy to fulfil and that it had produced around 2000 of these types of locomotives in the past. It was still looking for a local partner to assist with the traction motors Zongxiang said.
Zongxiang took the opportunity to share that CSR Zhuzhou was busy with prototype trains run by super-capacitors that re-charged whenever it stopped at a station and allowing the train to travel 1.5km on a single charge thereby doing away with the need for power supply along the tracks.
The company also showcased a 500km/h high speed test train at InnoTrans 2012 in September its website said.
Public Enterprises minister, Malusi Gugaba, said that the historic tender required bidders to comply with a 60% localisation threshold in order to qualify and that it would contribute towards "massive local development". The minister was unable to quantify the number of jobs that would be created through the deal.
CSR Zhuzhou has set up a local venture (CSR E-loco Supply) in which it holds a 70% stake to facilitate the deal. The other 30% is held by a broad based black economic consortium called ‘Matsetse Basadi'.
Lietsiso Mohapeloa, talking on behalf of the consortium said that one of the lead companies in the consortium was a 100% black women owned company made up of mainly professional engineers and that they would together hold a 15% stake.
Another 10% stake said Mohapeloa would be held by a company made up of business people with project and business management skills who also had approximately 30% black women ownership.
A community trust would hold the other 5% with a further 5% earmarked for a prospective employee share scheme.
Mohapeloa said that he holds various interests in telecommunications, IT, construction and project management ventures of which he named Channel Data, Motebong and Electrohaps as a few.
Gigaba invited proposals to be submitted for the supply of another 1064 locomotives to meet Transnet's growth aspirations of increasing volumes from the current 201mt per annum to over 350mt over the next seven years as part of its R300bn capital expenditure program.
As background, CSR Zhuzhou Electric Locomotive company is the biggest supplier of electric locomotives, electric multiple units and metro rail cars in China. It has publicly stated its ambitions to expand outside China and has supplied into Iran, Uzbekistan, Kazakhstan, Singapore, Turkey, Malaysia and India.
CSR Zhuzhou has over 9000 employees and production capacity of 1000 electric locomotives and 1000 metro cars per year. The company generated revenue of more than $2.3bn in 2011 Transnet said.
This article first appeared on www.mineweb.com
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