Contract worth R 51bn becomes effective
- Published: Saturday, 26 April 2014 07:37
PRASA and Gibela conclude financial close of contract for the supply of commuter trains
The Passenger Rail Agency of South Africa (PRASA) and Gibela Rail Transportation  have concluded the commercial close of the contract signed on the 14 October 2013 for the supply of 600 commuter trains (3,600 coaches) over the next 10 years.
As a consequence, the contract, which is worth R51 billion and includes the construction of a local train manufacturing plant – is in full force and effective from 26th April 2014. The manufacturing of the new train-sets can now commence with the first 20 trains to be manufactured in the Alstom Lapa (Brazil) plant. The first of these trains will arrive in South Africa in the fourth quarter of 2015. In addition, Gibela will provide technical support to PRASA and the supply of spare parts over an 18-year period.
The R51 billion budget is subject to inflation and the foreign exchange adjustments based on the Euro/Rand movement.
"We are proud of successfully conducting one of the biggest railway procurement processes in the world", said Mr Lucky Montana, PRASA Group CEO. "Thanks to this contract, over 3 000 new Metrorail coaches specifically designed for South Africa will soon replace the old generation with high standards of safety, reliability and comfort. This will substantially change the quality of passenger service in order to improve the daily journeys of more than 2 million South African people."
According to Gibela CEO, Marc Granger, the company and its shareholders (Alstom and Black Economic Empowerment Equity Partners) are ready to start work on the project in South Africa and at the sites involved around the world.
"We are excited about reaching this significant milestone which paves the way to start with our industrialization efforts as required by this contract – which is part of a broader strategy to localise and to reinvigorate the railway sector in South Africa. To date, we have signed Letters of Intent with 35 suppliers for a wide range of components and raw material to be sourced from South Africa" explained Granger.
The Minister of Transport, Ms Dipuo Peters MP, congratulated PRASA on the work the agency has done as this would definitely ease congestion on our trains, ensure passenger comfort and, most importantly, replace the current Metrorail fleet which has reached the end of its design life. Government is particularly pleased that the process was transparent, fair and competitive. The appointment of the probity officer was most certainly critical in ensuring that the entire transaction was above board.
"We are proud that finally the work of manufacturing the new trains will now start and the creation of much-needed jobs will commence," Peters said.
PRASA will be supplied with the X'Trapolis Mega, the new X'Trapolis train developed by Alstom to fit South Africa's 1.067 m gauge. The first 20 trains will be manufactured in the Alstom plant in Lapa, Brazil, which is one of Alstom's competence centres for the production of stainless steel trains. More than 500 South African technicians, engineers and other professionals will be trained in the skills and competencies required to build and deliver modern trains of the standard of the X'Trapolis Mega. Gibela will also build a R1 billion manufacturing site in Dunnottar, 10 km north of the town of Nigel, to produce the 580 trains which will be manufactured in South Africa. The 600,000 m2 manufacturing facility is also designed to house an engineering centre and training facility.
"South Africa has always had its own rail industry capacity but because of almost 35 years of under investment in the rail system, the engineering and design capability as well as the capacity to integrate have been lost. As we embarked on this programme, we wanted a technology partner; we wanted the trains to be built here and we wanted South African engineering firms as part of the global supply chain in the rail sector. It is very important for us that we have this factory established here", said Montana.
Granger added: "From a site establishment perspective, we will be constructing a new factory and this will give us an opportunity to contribute to the creation of sustainable and enduring economic and social developments for the benefit of the people of South Africa."
The project will create over 33 000 direct and indirect jobs over 10 years, achieving a local content level of over 65%. Gibela will train an estimated 19,000 people (artisans, technicians, train drivers and, among others, technologists) during the life of the project.
PRASA was established in December 2008, when the President signed the Legal Succession Act into law but was formally launched in March 2009. This completed the consolidation of the various entities (Metrorail, Autopax, Shosholoza Meyl and Intersite) into PRASA from what were the South African Rail Commuter Corporation and Transnet. PRASA has 17 000 employees, 76% of which are employed by Metrorail. Website: www.prasa.com
Gibela is a South African rail company born out of a consortium that was awarded PRASA's 10-year rolling stock programme to design, manufacture and deliver 600 passenger trains. The company will establish a state-of-the art manufacturing facility in Ekurhuleni, Gauteng; localise the manufacture of components for the new fleet and create jobs on a sizeable scale. In tandem with managing local content of more than 65%; Gibela will facilitate the development of local rail-sector relevant skills and the transfer of technical know-how. As Gibela's majority shareholder and major supplier, Alstom will play a significant role in the transfer of historical technological expertise in suburban rail transport which includes the robust design-proven X'Trapolis family and it's X'Trapolis Mega (MEtric GAuge) − a safe, reliable and comfortable train, specifically designed for South Africa.
Alstom is a global leader in the world of power generation, power transmission and rail infrastructure and sets the benchmark for innovative and environmentally friendly technologies. Alstom builds the fastest train and the highest capacity automated metro in the world, provides turnkey integrated power plant solutions and associated services for a wide variety of energy sources, including hydro, nuclear, gas, coal and wind, and it offers a wide range of solutions for power transmission, with a focus on smart grids. The Group employs 93,000 people in around 100 countries. It had sales of over €20 billion and booked close to €24 billion in orders in 2012/13. Website: www.alstom.com
- Gibela, the South African company executing the rolling stock programme, is held 61% by Alstom, 9% by New Africa Rail and 30% by Ubumbano Rail – the hosting entity in the National Empowerment Fund for the Broad-Based Black Economic Empowerment partners, the Gibela and PRASA employees as well as an Education Trust.
he Alstom X'Trapolis Mega for PRASA can travel at speeds of up to 120 km/h with the ability to be upgraded to 160 km/h. Each single-deck train is composed of six cars and is able to carry more than 1300 passengers. Thanks to the modularity of X'Trapolis, PRASA will be able to adjust the configuration of the train depending on the number of commuters (from 4 to 6 cars with the option of having the set coupled).
The train is equipped with air conditioning, ergonomic seats, real-time on-board information, Wi- Fi internet access and a combination of direct and indirect lighting to increase the feeling of space. Additionally, it includes an enhanced door system to provide better accessibility for passengers with reduced mobility and full-length connecting gangways for improved fluidity.
With a 95% recyclability rate, the X'Trapolis sets a high standard in environmental sustainability. Additionally, the stainless steel car body-shell reduces the weight of the train and its electrical braking capacity enables a significant reduction in energy consumption.
- PRASA, through the rolling stock programme, is in the process of procuring approximately 7224 new rolling stock with a projected investment of 123 Billion Rand over a period of 20 years. The procurement of the rolling stock is being done in two phases; within the first phase Gibela is contracted for the first 10 years.
 Gibela is a joint venture led by Alstom and co-owned by local shareholders, Ubumbano Rail and New Africa Rail.