Rail investment key to unlocking trade
INVESTMENT into rail infrastructure could be the answer to unlocking Africa’s trade potential to lead to economic growth, Tim Schweikert, the chief executive and President of General Electric (GE) South Africa has said.
Schweikert was addressing delegates at the African Economic Expansion Summit taking place in Durban this week.
“I see rail infrastructure as being a critical path to the future of Africa’s economic success,” he said.
He said programmes such as the National Development Plan were fuelled by economic development.
“Things like rail infrastructure will be the backbone to that economic development in this region,” he added.
GE was one of the four companies awarded a R50 billion contract by Transnet in March to supply 1 064 diesel and electric trains over four years. Transnet was spending twothirds of its R312bn expansion budget on rail, which would include a new fleet and upgrading and laying lines to boost its capacity to haul iron ore, coal and manganese. Other companies which were contracted included Bombardier and two Chinese companies.
The US-based multinational firm has already set aside $2bn (R22.4bn) for investment in the continent by 2018.
Locally GE plans to inject R700 million into developing South Africa’s skills and small medium enterprises as well as creating black industrialists.
Schweikert said rail infrastructure would not only create jobs for the continent but would open up trade paths for regional economies. “Although there are still a number of challenges facing the off-take of such infrastructure projects, Africa has the will and potential to do this,” he said.
South Africa’s busiest port, Durban Container Terminal, transports about 18 percent of cargo by rail.
The rest was transported by road. Panelists agreed that Transnet’s new proposed Dig-out Port plans should be in line with rail infrastructure to avoid future road congestion.
Schweikert said through the Transnet’s contract, GE had already delivered 150 000 hours of skills development training and had set up a manufacturing site in South Africa.
GE’s next contract would include 55 percent of localisation and the firm would be spending $1.8 billion on preferential procurement, he said.
Willie Coetsee, a senior manager for strategy at Transnet Port Terminal, another division of Transnet, said the group waimed to move cargo from road to rail.
General Electric locomotives. Rail infrastructure is critical to economic development in Africa. It will create jobs for the continent and open up trade paths for regional economies.