PRASA: Study for R11bn of new locos nears completion

[Steve Appleton]

From Business Day, 6 January 2012, http://www.businessday.co.za/Articles/C ... ?id=164214

Prasa’s study for R11bn locomotive plan nears completion.

The state-owned Passenger Rail Agency of SA, operator of commuter rail service Metrorail, is working to complete a study paving the way for the company to spend R11bn on new locomotives.

NICKY SMITH
Published: 2012/02/06 08:42:20 AM

THE state-owned Passenger Rail Agency of SA (Prasa), operator of commuter rail service Metrorail, was working to complete a study paving the way for the company to spend R11bn on new locomotives. This programme is in addition to Prasa’s plan to spend R137bn on new rolling stock.

In November Prasa said it was unable to fund the purchase of new rolling stock because of its weak balance sheet and because it could not afford private-sector financing, it would rely on state-backed guarantees and funding.

Finance Minister Pravin Gordhan is expected to announce details of how much would be spent on the two projects during his budget speech later this month.

The new trains would replace part of the ageing fleet belonging to Shosholoza Meyl, Prasa’s long-distance commuter rail service.

Commenting on the status of the R137bn renewal programme, the company’s fleet renewal project director, Piet Sebola, said on Friday: "We have made significant progress. We have appointed transaction advisers to prepare the procurement documentation and the tender procurement process will be kick-started in March. "There shouldn’t be anything to stop the process now." The second part of the process would be the completion of a survey of the local industry’s "capacity and capability" to manufacture rolling stock, he said.

As part of the government’s strategy to create jobs and resuscitate the country’s ailing industrial base, it is setting minimum thresholds for a percentage of the new equipment to be manufactured in SA. In terms of Prasa’s 20-year programme, a minimum of 65% of the rolling stock due to be acquired should be manufactured domestically, Mr Sebola said. "We need to more or less know what the capacity is, but we are doing a quick survey because it is important to see what capacity can be provided because it is a huge investment programme."

Securing enough skilled people was also critical to the success of the fleet renewal programme. "Up-skilling is a must-have and we will invest quite significantly in engineers, artisans and technicians for this project. SA last bought trains in the mid-’80s and for quite a while we have lost a lot of good skills in the rail industry," he said.

Prasa was expected to start its market engagement process this month by publishing information regarding the tenders. On March 9 Prasa would formally issue is request for proposals for the replacement programme, Prasa CEO Lucky Montana said last week.