Transnet to roll out new locomotives in July

Johannesburg - Transnet will roll out new locomotives in July after General Electric completed their technical design, CEO Brian Molefe said on Monday.

Transnet awarded GE, Bombardier and two Chinese firms a R50bn contract last year to build 1 064 locomotives to replace its aging fleet and speed up the delivery of goods to the port.

Molefe said Transnet had raised R13bn with financial institutions in Canada, the Unites States and South Africa to fund the GE and Bombardier portion of the deal.

READ: State-owned companies big spenders

On Monday Export Development Canada (EDC) announced up to $450m in financing for Transnet. The loan will partially finance the delivery of 240 TRAXX dual voltage locomotives.

"We are emboldened by the confidence that EDC and other funders throughout the world and South Africa are showing in Transnet," Molefe said at a media briefing.

"Broadly, the agreement is in line with our funding strategy, especially our focus on diversifying sources of funding and raising debt cost effectively. Crucially, the agreement confirms the attractiveness, commercial viability and bankability of Transnet and its projects in an unequivocal and definitive manner."

The Transnet contract is significant because it expands Bombardier's footprint in an emerging market where large-scale infrastructure development is currently underway.

"Bombardier is encouraged by this important step and is pleased with the support that EDC gives to enable Canadian business opportunities internationally," said Aubrey Lekwane, Head of Business Development South Africa, Bombardier Transportation.

A total of $19bn in capital investments in Sub Saharan Africa are expected over the next 5 years, with over 65% attributed to modernising and expanding the rail network.