New Transnet locomotives to assist in skills development

Monday, February 21, 2011

Pretoria - The delivery of the first two of a 100 locomotives is not only in line with Transnet's capital investment programme but it will also assist in skills development, Public Enterprises Minister Malusi Gigaba said on Monday.

The minister was speaking at a ceremony where Transnet received the first two of a 100 locomotives it bought from General Electric South Africa Technologies (GESAT). The locomotives are the first AC diesel locomotives to be introduced in sub-Saharan Africa.

They are to be used on the coal line and general freight business of Transnet Freight Rail and are part of Transnet's fleet renewal plan and the company's R93.5 billion five-year capital investment programme.

"Jobs, skills development - especially engineering and technical skills, localisation of manufacturing of equipment and ensuring that our logistics infrastructure works efficiently are some of the key deliverables on which we are to be judged," he said.

The agreement between the parastatal is in line with its commitment to using its capital investment programmme to meet the objectives of the Competitive Supplier Development Programme (CSDP). The CSDP is the department's initiative that is intended to encourage localization of manufacturing, sustainable employment and skills development.

The first 10 locomotives will be built at the GE plants in the United States, while the other 90 percent will be assembled at Transnet's manufacturing facilities in Koedoespoort, with GE supplying Transnet with all major components including engines. Transnet Rail Engineering (TRE) will be responsible for the complete assembly as well as sub-assemblies.

The GE/Transnet agreement is South Africa's largest CSDP transaction to date, placing the utility as the leading state-owned enterprise in localisation.

The minister described the event as a "groundbreaking achievement."

"The agreement between Transnet and General Electric will go a long way towards ensuring that our state-owned entities play a significant role in advancing the goals of our New Growth Path," he explained.

The long term objective of Transnet is to localise its supply chain of imported manufactured goods or services to a reasonable level, while also promoting local industries and South Africa.

Transnet chairperson Mafika Mkwanazi said locomotive fleet renewal was central to the company's drive to improve productivity, safety and efficiency of assets and people.

"In addition to the obvious benefits of a significantly reduced average age of Transnet Freight Rail's fleet, this enables us to showcase our technical ability through our engineering division. It also gives us an opportunity to develop our engineering, technical and manufacturing skills in partnership with a leader in this field - GE," said Mkwanazi.

Transnet Rail Engineering's Koedoespoort plant was upgraded and employees have received training at GE facilities in the United States, Mexico and Australia.

"We are pleased to partner with Transnet to turn its vision of 21st century rail freight transport into reality. This partnership allows us to bring leading rail technology to South Africa while contributing to world-class skills development in the region", Lorenzo Simonelli, President and CEO of GE Transportation said.

Transnet is in the process of finalising an agreement with United States export credit agency (ECA) - US EXIM - to provide funding for the purchase of these locomotives. Such funding is part of Transnet's Board-approved strategy of diversifying its funding sources cost effectively.