Weak economy bad for railway procurement

THE economic downturn has had a dramatic effect on Transnet’s wagon procurement programme and ripple effects on domestic component makers.

Black industrialists set up specifically to supply Transnet have been particularly hard hit by the plunge in orders from the parastatal.

Transnet Engineering chief executive Thamsanqa Jiyane told parliament’s trade and industry committee yesterday that in 2016-17 only 100 wagons were built, compared with the 4 119 originally targeted.

The previous year only 2 100 wagons were manufactured, compared with the 3 692 projected.

Jiyane said Transnet Engineering only entered into wagon building contracts when this was required by demand for them.

As the economy slumped‚ so demand for cargo transport declined.

Customers had asked that no more wagons be manufactured as there was no need for them.

“The reduction in demand for wagons translated into low demand for the components related to these long-term contracts entered into,” Jiyane said.

Transnet and the Passenger Rail Agency of South Africa were called before the committee to report on localisation taking place related to major infrastructure projects.

Jiyane reported that in relation to the 1 064-locomotive acquisition programme‚ R4-billion had so far been spent domestically, compared with the R21.8-billion target.

He said 269 of the 1 064 locomotives had been accepted from two of the original equipment manufacturers at Koedoespoort, Pretoria.

ANC MP Adrian Williams said he was sceptical about the information provided, as site visits undertaken by the committee indicated that no localisation was taking place.

“Quite frankly I don’t believe you. I think you are coming here and talking nonsense‚” he said.