22 October 2012
A consortium led by Chinese manufacturer CSR Zhuzhou Electric Locomotive (CSR) has been named as the winning bidder to supply Transnet with 95 electric locomotives as the South African state company embarks on a massive drive to upgrade its freight rail capabilities.
Transnet will pay R2.6-billion (about US$300-million) for the 95 locomotives, the first 10 of which will be assembled in CSR’s factories in China, while the remainder will be made in South Africa.
CSR owns 70% of the winning joint venture consortium – to be known as CSR E-loco Supply – with local partner Matsetse Basadi owning the remainder.
R300-bn capital investment programme
Earlier this year, Transnet announced the details of a R300-billion capital investment programme that it said would create over half-a-million new jobs while making its freight rail division the fifth-largest in the world.
The company plans to spend the lion’s share of this, R205-billion, on rail projects – R151-billion on freight rail – as it pushes to increase its freight rail volumes from about 200-million to 350-million tons by 2019, while increasing its market share of South African container traffic from around 79% to 92%.
This increase would significantly reduce the cost of doing business in South Africa, Transnet said at the time, citing internal studies showing that rail in the country was on average 75% cheaper than road transport.
Shifting freight from road to rail
A large-scale shift in freight transport from road to rail would also “address costs, congestion and reduce carbon emissions,” the company said.
In addition to the 95 locomotives that CSR E-loco Supply will deliver, Transnet has invited additional proposals for the supply of 1 064 locomotives, including 465 diesel and 599 electric locomotives.
Speaking at the official signing of the tender at Transnet Freight Rail’s depot in Pretoria on Monday, Public Enterprises Minister Malusi Gigaba said the award followed an open and public tender process which drew interest from leading manufacturers around the world.
CSR E-loco Supply will deliver the first batch of locomotives by December 2013, with the last batch scheduled to be delivered by September 2014.