How Gibela is helping South Africa grow

Gibela has produced 40 of the 600 new passenger trains for which it has a R59-billion contract with the Passenger Rail Agency of South Africa (PRASA). It was formed in 2013 as a black economic empowerment consortium, the Gibela Rail Transport Consortium, comprising French rail company Alstom and South Africa’s Ubumbano Rail. Gibela’s contract includes a manufacturing and supply agreement and technical support and spares supply agreement.

Releasing Gibela’s first socio-economic impact survey, CEO Hector Danisa said R6.4-billion had been spent on local content in the four years since inception.

“We are building a rail hub that will supply South Africa with comfortable and efficient trains. Trains are the most efficient transport mode and can carry the largest number of people. With the global population growing and becoming increasingly urbanised, and considering the cost to users and the impact on the environment, we believe trains are the future,” says Danisa.

Of the R6.4-billion in local content spent on setting up the Nigel plant and manufacturing the train sets (engines and carriages), R4.6-billion has thus far gone to 370 black-owned companies as per South Africa’s preferential procurement rules. Of that, R1-billion went to small and medium-sized enterprises, some of which are owned by black women.

All this and more is set out in Gibela’s report, The Socio-economic Impact of Gibela, which explores development the company has undertaken in a bid to help South Africa reach the broad socio-economic objectives set out in the National Development Plan’s transport sector objectives.These are revitalising the rail sector, promoting commuter rail as a transport mode of choice, driving inclusive growth, and community upliftment.

This report is the first published by Gibela. Research was done in 2014 to form a baseline study for the train maker, says Buyiswa Mncono-Liwani, Gibela’s corporate services executive.

“The greatest improvement is in our work to revitalise the South African rail industry through localisation,” she says. “We have done that through SMME development, through awarding business to local companies, or to international companies, but with a stipulation that they use local labour or local material. We have achieved 44% local content and are on an upward trajectory.

Gibela’s work contributed 1.25% to Gauteng’s economy over the report period. Gauteng generally contributes about a third of South Africa’s gross domestic product in any financial year, according to Statistics South Africa, and Gibela Rail therefore plays its part in the country's economic growth.

Through its operations over the reporting period, Gibela has created 920 direct jobs in its factory, and has invested more than R30-million in maths and science education, early-childhood development and agricultural schemes in the communities around its Nigel plant.

Gibela’s state-of-the-art X’trapolis MEGA commuter trains are aimed at vastly improving passenger experience. These trains are comfortable, air-conditioned, have better safety features and are made with 90% recyclable components, quite a contrast with the older commuter trains used in South Africa, says Danisa.

Through the Gibela Research Chair programme, the company has contributed to technology research and innovation, with the academics who have benefited from the programme producing 10 journals and 20 conference papers in the report period. Three people have achieved a first degree through the programme, which also funds three post-doctoral fellows, two doctoral fellows and a masters graduate. The programme has also supported local inventors to successfully file two patents.

In addition, Gibela has spent more than R23-million in employee training, through which more than 1 454 staff members have registered to attend training programmes. The majority of the trainees (90%) were black employees, and 50% were women.

Gibela’s contribution to skills development over the reporting period does not stop there. The company put R81.4-million into supplier and enterprise development across 42 different entities, providing qualifying suppliers with access to funding, favourable credit terms and the free issuing of material, and giving them other business support, including access to technical expertise.

Throughout all this, Gibela has operated according to high international environmental performance standards, including improving the condition of a wetland alongside its Nigel plant and working to achieve an 80% waste recovery rate.

“This social impact report shows what South African companies can achieve when we focus not only on our core function. The imperative is on us all to work together to make South Africa a better place by contributing to its holistic growth,” Danisa says.