Prasa, Gibela close in on deal
THE Passenger Rail Agency of SA (Prasa) and Gibela Rail Transportation have completed negotiations that will cover the production and maintenance of 600 new commuter trains, according to Piet Sebola, head of Prasa’s R123bn rolling stock fleet procurement programme.
Completion of the final contract will allow Gibela, the winning bidder, to approach banks for finance to support the build programme.
“We want to confirm the negotiations are now complete … and now we are finalising the two project agreements,” Mr Sebola said.
The completion of the negotiations meant Gibela and Prasa were within the stipulated timelines for the ambitious project to reach financial close by December, he said.
Prasa and Gibela were finalising the details of the 10-year manufacture and supply contract for the 3,600 coaches that are to be built in SA. It also provides for technical support and a spares supply agreement, Mr Sebola said.
“We are likely to sign on the 14th or the 16th October. We are earmarking those dates to sign the agreement between Prasa and Gibela,” he said. The plan is to allow the signing ceremony to coincide with a state visit by French President Francois Hollande.
The technology partner and lead partner in the Gibela consortium is French transport and power giant Alstom, which was selected as the preferred bidder in December last year, beating several other bidders for the R51bn programme.
SA is undertaking an enormous rail investment programme to modernise its rolling stock for both freight and passenger services after decades of underinvestment in infrastructure.
Gibela will now start approaching banks for finance to support the build programme. Financing was required to cover the performance warranties — which are in place to ensure the trains perform as promised — and to secure long-lead items required for the manufacture of the coaches, Mr Sebola said.
“We (Prasa) don’t have money between now and April 2014 … and as soon as they sign they will start with localising. So between now and next year April, Gibela will cover whatever expenses there are,” Mr Sebola said, adding that Prasa was also in negotiations with the Treasury about funding.
In parallel with this, Prasa — along with the National Empowerment Fund, the Treasury and three black economic empowerment consortia — has been working to craft a shareholder agreement.
The shareholder negotiations were “work that is ongoing”, said Sonja de Bruyn Sebotsa, one of the principals of Community Rail Services, one of the three winning bidders. “The best I can say, timetablewise — we are making progress.”
She said the three partners were “working well together” and “we don’t see any reason for delays in our process”.
Gibela is expected to begin producing coaches for Prasa by the first quarter of 2015.
Mr Sebola said Prasa had negotiated “aggressively” to ensure that the deadline was not compromised and the current schedule for the contractual and financial close indicated it would still be met.