Cape Town - The government is looking to significantly
increase the number of electric and diesel units in parastatal Transnet's
ageing freight rail locomotive fleet, Public Enterprises Minister Malusi Gigaba
said on Thursday.
In a speech prepared for delivery to members of the SA
Chamber of Commerce and Industry, he said an "ambitious fleet renewal
strategy" was being designed.
"(This will) see us procure consistent and significant
quantities of both electric and diesel locomotives annually over the next 15
Gigaba said the average age of Transnet's locomotives was
about 33 years.
"We need both to bring down the age of the fleet and
add significant capacity if we are to both unlock Transnet's customer's growth
potential and move goods from road to rail."
This would make South Africa one of the most strategic
markets for global locomotive equipment manufacturers, particularly in relation
to heavy haul electric models.
"Our plan is to partner the relevant original equipment
manufacturers to build South Africa's locomotive manufacturing capability.
"Our aim is to more than double the quantity of local
content embodied in the locomotive and to ensure that South Africa becomes a
key global manufacturing and niched engineering hub for the relevant original
equipment manufacturer," he said.
Although Transnet had been steadily investing to increase
capacity on the country's key commodity export corridors, this investment was
limited by its balance sheet capacity.
"(It) is insufficient to really unlock new investment
and growth in our mining sector. Consequently, we need new sources of finance
to enable a quantum jump in the rate of investment and in the capacity of these
"The DPE (department of public enterprises) will be
exploring partnerships with both development finance and mainstream finance
institutions to see how equity and quasi equity finance for these projects can
"In addition, the department will be engaging with the
large mining houses to explore co-investment relationships, given that these
companies have the most to gain through additional investment, but are
presently not sharing any of the risk associated with the development of these
Referring to the road and rail sectors, Gigaba said
government would initially focus on areas that were complementary to Transnet's
"This will include areas such as branch line
concessioning, innovative proposals to put cargo from road to rail and reduce
road congestion around ports, and inland terminal development.
"We are investigating the establishment of a governance
framework to expedite these processes," he said.