Rail in­vest­ment key to un­lock­ing trade

The Star Early Edition - - NEWS - Nom­pumelelo Mag­waza

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.

PHOTO: SUP­PLIED

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.

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