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Transnet wasted billions on trains

Transnet SOC Ltd, South Africa’s port and freight-rail operator, squandered billions of rand and broke a raft of regulations when it altered the terms of a deal to buy 1,064 new locomotives, a investigation by law firm Werksmans Attorneys found.

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South African train manufacturing steams ahead

The R51bn contract to create 600 new passenger trains for the Passenger Rail Agency of South Africa (PRASA) has grasped 32 local suppliers.

To date there have been six trains completed and sent off to South Africa, which was part of an order of 20 from Brazil. The 580 trains outstanding will now be manufactured in South Africa.

Gibela, a joint venture between Alstom, Ubumbano Rail and New Africa Rail, is responsible for supplying the trains to PRASA.

“Our company has no contractual obligations to add local content to the Brazilian-built trains. However, Gibela took a strategic decision to get a head start, in an effort to ensure that local suppliers are well prepared – in terms of technical capability, capacity and investment – for what will be an intensive manufacturing programme once local production starts in 2017,” says Marc Granger, Gibela

By the end of 2019 there will be a rate of two train cars a day or 62 cars a year in local manufacturing. This will be at the Dunnottar plant which is under construction in Ekurhuleni.

“To do this, 10,000 parts will have to come on site every day, from 250 suppliers. This is a very, very significant challenge. Only the best factories in the world can deliver this,” stresses Granger.

For each train that is currently built in Brazil, 22% of procurement spend is on components obtained from South African suppliers.

About 65% to 70% of the mechanisms will be produced locally at peak production, by value.

“Train 21 will have “significantly” higher local content than the Brazilian produced trains,” says Granger.

“Therefore Gibela is on a major mission to find more local suppliers,” adds Granger.

Granger says that they are not only looking for large tier one suppliers, but also tier two, three, four and five.

Granger’s goal is to have all Gibela components come from South Africa, mainly chemicals and paints.

“At full production, Gibela anticipates that around 200 local suppliers will be delivering parts to Dunnottar,” says Granger.

This leaves the consortium with two years to find a noteworthy amount of local suppliers.

“The project to create a supplier park next to the Dunnottar plant is succeeding,” states Granger.

It has been agreed by the Gibela shareholders that Ubumbano Rail will be the main developer of the park.

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