Cape Town. 200314. Brian Molefe, the chief executive of Transnet speaking to residents of Khayelitsha at the Oliver Thambo hall. Picture Leon lestrade


The core engineering parts in Transnet’s 1 064 locomotives, for which the winning bidders were announced on Monday last week, will all be produced outside South Africa.

Parts such as the engines and traction motors will be exported by the companies that won the tender from their countries of origin. Only the “frills” would be manufactured in South Africa before they were assembled here, Transnet chief executive Brian Molefe said on Friday.

Speaking after a community engagement in Khayelitsha on Thursday about job opportunities and enterprise development that would result from the locomotive contract, Molefe said that not only General Electric South Africa but all suppliers would import core parts to South Africa.

“A locomotive is about traction motor and engine. That is the heart of the locomotive. There is a lot of intellectual property involved. The rest is frills. So we will do the frills but the frills are a lot. And in the process we will acquire the skills to do the whole locomotive ourselves and become an original equipment manufacturer,” Molefe said.

Parts to be made in South Africa will include the wheels, cabling, the interior, windscreens and the covers of the locomotives, made of fabricated steel.

When Transnet had learnt the ropes of manufacturing the entire locomotive, Molefe said, the logistics utility would position itself as an exporter of locomotives to the continent.

While in the learning phase, Transnet expected that the tender to manufacture its own locomotives would create 300 000 direct and indirect jobs.

When it announced the four foreign companies that would share the R50 billion order, Transnet said 16 percent of the project would be handled by Transnet Engineering. The division would outsource more than 30 percent of that work to local manufacturing firms.

On Thursday, Molefe said that in the Western Cape, for instance, there were a number of engineering firms that had traditionally worked with Transnet Engineering in its maintenance facilities, supplying locomotive and wagon parts. These would be considered local partners.

“There is no reason why they shouldn’t participate,” Molefe said.

He told Business Report that Transnet would launch its second enterprise development hub in Saldanha in the Western Cape next month.

Four of these hubs are expected to be opened in the Western Cape, Eastern Cape, KwaZulu-Natal and Limpopo in the next three to four months.

Transnet launched its first enterprise development hub at the Carlton Centre in Johannesburg in August last year. The hub provides a one-stop shop for small businesses, with almost all compliance and enterprise support institutions, such as the Small Enterprise Development Agency, the SA Revenue Service and the BEE Verification Agency, on site.

By March next year, each province would have one enterprise development hub, he said. Transnet developed the programme so it could transform its supply chain by grooming its own supplier base of small and medium enterprises.

In the past week, Transnet has held discussions with black businesses and other structures about opportunities that exist for entrepreneurs within the freight logistics utility.

Meanwhile, Transnet was at pains yesterday to rebuff claims of conflicts of interest in the tender process after reports surfaced that some of its former employees involved in the procurement process were now involved in empowerment firms that were partners of the firms that were awarded work.

In a statement, spokesman Mboniso Sigonyela said none of the local or empowerment partners of any of the bidders had failed Transnet’s conflicts of interest test.

“Conflicts were discussed through our governance structures set up specifically for the contracts and it was decided that there was no conflict or potential influence,” he said.