R51bn deal rings in rail renaissance

Gibela wins Prasa contract to build commuter trains

AR2-BILLION state-ofthe-art train factory will be built in the “rust belt”‚ east of Johannesburg‚ as part of a landmark agreement reached between the Passenger Rail Agency of South Africa (Prasa) and the Alstom-led consortium Gibela.

The factory will build modern commuter trains to replace dilapidated rolling stock.

Prasa and Gibela have successfully concluded negotiations over the major elements of the R51-billion contract to supply 3 600 coaches over the next 10 years and will sign off on all the contracts by the end of next month.

The agreement is an important step for South Africa‚ which has ambitions to reindustrialise its economy through state spending.

Under the original tender‚ state-owned freight and logistics company Transnet will build the new 35ha factory. This will be part of a larger industrial park in Ekurhuleni‚ where much of the country’s heavy engineering firms are situated.

The successful conclusion of negotiations has contractually established the Gibela consortium as the designated supplier for Prasa’s rolling stock fleet renewal programme.

Prasa CEO Lucky Montana said the contract was an important milestone for South Africa‚ and provided the public sector with a model for leveraging procurement spend to achieve economic and industrial outcomes.

Speaking at the Africa Rail conference in Sandton on Wednesday‚ Alstom president Henri Poupart-Lafarge said the contract was the largest his company had ever signed. The deal created a platform for Alstom to establish a globally competitive manufacturing facility in Africa capable of producing trains for South Africa and, most importantly‚ for export to the rest of Africa and other global rail markets.

“We see this as building a strong base for exporting in the future . . . we need this to become a worldwide base [for train production]‚” said Poupart-Lafarge, adding that the company was “extremely proud” to be part of a venture that will bring a much anticipated “rail renaissance” to South Africa.

He said Alstom’s new train was a “fantastic product” that the company had recently sold to Australia‚ which demonstrated that new commuter trains in South Africa would be worldclass. “It is the best quality Alstom has‚” he said.

The final contracts will define and apportion the financial and execution risks, namely the escalation in cost of materials, as well as train performance.

These will be completed before the end of next month‚ following which the contracts will be signed and presented to Prasa’s board. — BDLive