Transnet Rail Eng tenders for export of wagons

[Steve Appleton]

From Business Day, 7 October 2011, http://www.businessday.co.za/Articles/C ... ?id=155437

Transnet eyes potential for supplying wagons
Transnet unit participating in a tender to supply as many as 740 wagons for Mauritania’s state rail authority
NICKY SMITH
Published: 2011/10/07 07:11:10 AM

TRANSNET Rail Engineering (TRE), the train-building unit of state-owned freight and logistics company Transnet, is pushing to establish itself as a supplier of wagons and locomotives following confirmation that it is participating in a tender to supply as many as 740 wagons for Mauritania’s state rail authority.

In an interview yesterday, the company’s GM for marketing, Thoba Majoka, said its wagons sell for R750000 each, which makes the contract worth about R550m.

"It is a large contract and there are many other contracts on the continent. That is why it’s important we market ourselves and say we are available to manufacture," he said.

Mauritania needs the wagons for transporting iron ore.

TRE has passed the technical capability test for the Mauritania contract and on October 16 the company’s financial capability will be evaluated, he said.

Transnet is already building [wagons for Rio Tinto to move coal from its mine in northern Mozambique, TRE CEO Richard Vallihu said. "We have a contract to build 200 wagons for Rio Tinto; we have completed 150 of those wagons."

Mr Majoka said the balance of the contract would be completed by about December.

In the Democratic Republic of Congo, TRE was pursuing a smaller tender to supply 30 wagons to the state rail authority, he said.

"We went to the (Congo) for the first time and it’s a small contract, but it’s important for us. They want dual-purpose wagons that can carry containers and be converted to be able to carry logs."

TRE competed with four other companies, two of them Chinese, one Japanese and one French. "We put in a very competitive price. They opened the tenders when we were there and we saw we were the lowest in terms of price," he said.

The order, worth about R25m, is important for TRE because "there is huge potential in that country".

In SA, there is a good possibility that the contract TRE has with General Electric to build 90 heavy- load Class 43 locomotives could be extended by a further 43 locomotives to a total of 133.

"It has not been confirmed but there are discussions."

The current General Electric contract for locomotives is the largest Transnet has with a locomotive supplier and is part of the programme Transnet has to revitalise its aging fleet in order to meet the demands of coal and iron ore mining companies.

Of the 90 locomotives being built in SA under the General Electric contract, 10 were built in the US. Seven have been completed and are in service on the coal and iron ore lines. The balance of the contract for 83 locomotives will be completed by March next year.

TRE is also eyeing the 20-year fleet renewal programme of the Passenger Rail Agency of SA (Prasa), the owner and operator of commuter rail service Metrorail.

Prasa will spend about R110bn over the next 20 years on the acquisition of new coaches, wagons and locomotives.

"We have the capability to play some role and be a part of the (Prasa) programme," said Mr Majoka, adding that TRE also had the capability to play a part in the localisation programme.

The state has indicated it wants the successful winners of the Prasa tenders to ensure that at least 65% of the content is obtained from SA.

"We want them to consider us as well … it is an opportunity to grow our skills even further and create a proudly SA rail company that can supply Africa with coaches and wagons rather than going to China and Europe," said Mr Majoka.