Picture: David Ritchie.

Johannesburg - A R51 billion contract between the Passenger Rail Agency of SA (Prasa) and Gibela Rail Transportation signed last year has come into effect, Prasa said on Tuesday.

“Thanks to this contract, over 3000 new Metrorail coaches specifically designed for South Africa will soon replace the old generation with high standards of safety, reliability and comfort,” chief executive Lucky Montana said in a statement.

The contract for the supply of 600 commuter trains, including 3600 coaches, over the next decade was signed on October 14 last year and came into effect on Saturday.

The contract included construction of a local train manufacturing plant, but the first 20 trains would be built by Alstom Lapa's plant in Brazil.

Gibela would provide technical support and supply spare parts over 18 years.

Gibela would build a R1bn factory in Dunnottar, near Nigel in Gauteng, to produce the 580 trains to be manufactured in South Africa.

Gibela chief executive Marc Granger said the company and its shareholders, Alstom and black economic empowerment equity partners, were ready to start work on the project.

“To date, we have signed letters of intent with 35 suppliers for a wide range of components and raw material to be sourced from South Africa,” Granger said.

The project would create over 33,000 direct and indirect jobs over 10 years.

Gibela would train around 19,000 people during the project.

“From a site establishment perspective, we will be constructing a new factory and this will give us an opportunity to contribute to the creation of sustainable and enduring economic and social developments for the benefit of the people of South Africa,” Granger said. - Sapa