Transnet yesterday celebrated the signing of a deal to buy 43 diesel-electric locomotives from General Electric South Africa Technologies (Gesat), the local arm of US firm General Electric (GE).
The deal is the latest development in Transnet’s R110 billion capital expenditure plan to be rolled out over five years. Last year, Transnet purchased 100 of the same locomotives from Gesat, 10 of which were built by GE in Pennsylvania.
The remaining 90 were to be built by Transnet Rail Engineering (TRE), the train-building unit of the state-owned enterprise, at its manufacturing plant in Koedoespoort. This plant has 3 692 employees, of which 3 434 are permanent.
According to the agreement, GE must adhere to the government’s competitive supplier development programme, meaning it must commit to stringent local requirements of industrialisation, skills development, job creation and preservation of technology and intellectual property.
At the celebration, Public Enterprises Minister Malusi Gigaba said the 43 locomotives, which would also be built at the Koedoespoort plant, would bolster TRE as a global supplier of wagons and locomotives.
“This occasion (yesterday) is not only about procurement from local suppliers, local building and assembling of locomotives, sustainable employment and skills development, but will also launch South Africa as a competitive manufacturing destination of rail equipment in the global rail industry.
“This event breathes further life to the recently signed local procurement accord with social partners, which underscores the strategic intent of our industrial policy strategy and calls for increased localisation of production… goods with an objective of reducing dependency on imported capital goods,” he said.
The diesel-electric locomotives, the first of their kind in sub-Saharan Africa, will cut life-cycle costs, improve fuel efficiency and reduce emissions.
The R110bn investment plan seeks to strengthen South Africa’s logistics chain. So far, 37 trains have been delivered and the remaining 63 of the first deal should be completed by the end of the year.
Donald Gips, The US ambassador to South Africa, said the US could benefit from Africa’s success, adding that “reducing barriers to regional trade by improving rail infrastructures is one way to hasten that process.”