SouthAfrica.info (Johannesburg)

7 December 2012

South Africa: SA Awards R51 Billion Rail Upgrade Contract

The Passenger Rail Agency of South Africa (Prasa) has named the Gibela Rail Transportation consortium, led by French company Alstom, as the winner of a multi-billion rand contract to design, manufacture and supply new trains and wagons for the country's massive railways overhaul.

"The ageing fleet combined with rapidly growing passenger need has led Prasa to focus on scaling the rolling stock investment as part of a broader strategy to acquire modern technology to meet changing demands," Prasa chief executive officer, Lucky Montana, said in a statement on Wednesday.

"The Prasa rolling stock fleet renewal programme is the catalyst for the transformation of Metrorail services and public transport as a whole."

Current Metrorail operations in Gauteng, Durban, Western Cape and Eastern Cape are serviced by 4 638 coaches, and approximately 90% of the rolling stock in operation dates back to the late 1950s.

Intensified efforts to invest in rolling stock

"The average age of the current coaches is 39 years, while the lifespan of railway rolling stock is of the order of an average 46 years," Montana said.

"Prasa has in the past two years intensified its efforts to invest significantly in new rolling stock over the next 20 years, with the first trains expected to be delivered in 2015."

The programme is looking to acquire 7 224 electrical multiple units, with an estimated investment of R123-billion over a period of 20 years between 2015 and 2035.

It has been divided into three components: 5 256 vehicles to meet existing rail passenger demand on the current network until 2020; 456 vehicles to satisfy growth in rail passenger demand on the existing network until 2030; and a further 1 512 vehicles to meet long-term rolling stock needs as part of future expansion.

Of seven groups to submit bid responses, the Gibela consortium led by Alstom and including local engineering company Actom was selected as the preferred bidder.

'Investing in development'

As the preferred bidder, Gibela will offer 3 600 vehicles delivered over a 10-year period from 2015 to 2025 at an expected cost of R51-billion; maintenance, spares supply and technical support over 18 years from 2015 to 2033; and 8 088 direct jobs created.

Gibela will also spend R797-million on skills development initiatives, R746-million on enterprise development in the rail sector and R273-million on socio-economic development contributions.

A target of local content of 69% by the second year of the project was also set, in addition to preferential procurement policies such as R32.8-billion to be spent on subcontracting to black empowered entities, R5.3-billion on subcontracting to qualifying small enterprises and exempted micro enterprises and R1.6-billion on entities owned by black women.

"While the urgent challenge to improve passenger services remains primary, the rolling stock fleet renewal programme has been designed to achieve a number of key government objectives," he said.

This includes the "delivery of quality services to citizens, revitalisation of South Africa's rail engineering industry through local manufacturing and ensuring local content as part of government's Industrial Policy Action Plan, employment creation, skills development and broad-based black economic empowerment".

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