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Ndebele launches R97bn rail upgrade plan

Apr 05 2011 13:50 Fin24 & I-Net Bridge

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Johannesburg  - Transport Minister Sibusiso Ndebele on Tuesday announced a major upgrade to rolling stock for the rail industry and promised to create thousands of jobs in the process.

Procurement of rolling stock for Metrorial and long distance rail services will cost in the region of R97bn over 18 years, Ndebele said.

The upgrade will provide an "essential foundation to continued growth and economic development", he said.

"This will enable us to significantly increase the country's passenger rail transport network, offering new routes and destinations throughout South Africa," Ndebele said in an address to manufacturers and financiers.

Ndebele said funding for the project will come from a partnership with private sector manufacturers and financiers, as the state is unable to fund "such a large programme" from its coffers.

Tax-based allowances will be offered to investors in some cases.

An international investors' conference will be held in Cape Town in June to continue discussions on SA's rail upgrade, Ndebele said.
 
The government will ensure that procurement is in line with its industrial policy and growth objectives, and attention will be paid to developing industry through local manufacturing and sourcing of local content.

Broad-based black economic empowerment will also be considered,  he said.

Ndebele said the investment in the rolling stock would over 18 years create up to 100 000 "job opportunities".

"It is expected that through this programme, between 72 000 (and) 100 000 job opportunities for (the) skilled and semi-skilled labour force will be created over an 18-year period," he said.

The upgrade will stimulate the up-skilling of South African engineers, training of mechanical and electrical engineers, technologists and technicians, he added.

Ageing rail stock means services are unreliable and the government wants to embark on the replacement programme by 2013/4, Ndebele said.

In addition to tax breaks, there will be grant-based incentives and loan-based ones from the Industrial Development Corporation.

Ndebele said a team of advisers had been commissioned through the Passenger Rail Agency of SA and a feasibility study is expected to be completed by June.

He will then take the matter to the cabinet and the procurement process will start once cabinet approval is granted.

"In terms of the draft programme, we therefore expect the procurement process to commence immediately thereafter, with March 2012 being the latest for the commencement of this important process," he said.
sibusiso ndebele  |  rail  |  jobs
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