Latest Media Releases

2006

Spoornet's Purchase of 110 New Locomotives: statement by Ms. Maria Ramos

Good afternoon and welcome. It gives me great pleasure to extend a warm and cordial welcome to you on behalf of Spoornet. I am pleased to announce that several months of negotiations have eventually culminated in this gathering - the signing of an agreement between Transnet and MITSUI & COMPANY AFRICAN RAIL SOLUTIONS PTY LTD (MARS). The agreement provides for the supply of 110 new electric AC/DC locomotives for the Coal line at a total cost of R 3.5 billion over 5 years.

The Coal line is a celebration of the vision, ingenuity and entrepreneurial spirit that gave birth to this industry and is the strategic rail link that is an artery for our "black gold". Indeed, from its humble beginnings of having delivered just 4 million tonnes in 1976, we have steadily increased capacity to over 70 million tonnes for the year ending 2005. We are now gearing up to meet a demand of 92 million tonnes for 2010/2011. This means that the export terminal capacity and that of the Coal line in Richards Bay will have to be increased. And to this extent, we plan to spend a further R9 billion on increasing capacity.

This agreement marks the first major investment in Spoornet's R25 billion capital investment programme for the next 5 years. The replacement of these locomotives is absolutely essential to sustain the volumes being transported on the Coal line and to enable us to ramp up capacity to meet the market demand of 76 million tonnes for the 2006/2007 financial year.

This investment is in line with Transnet's strategy to reduce transportation costs, reduce transit times and increase capacity to move freight with the overarching objective of lowering the cost of doing business and improving the international competitiveness of the South African economy.

It is becoming well known that Transnet will not flinch from its commitment to delivery, and thus remains committed to sustaining the competitive advantage that the Coal line provides to our customers. The operation provides world-class heavy haul transportation of coal, a fact that we are extremely proud of. And these new locomotives will go a long way towards ensuring that we remain at the forefront of international heavy haul operations. The locomotives will, for example, be able to haul heavier loads with the same power, effectively translating to 300 wagon trains as opposed to the current 200. Reliability and availability of locomotives will also increase by as much as 20%. The first locomotive will be ready for testing within 18 months and within 24 months the first batch of 6 locomotives will be deployed on the Coal line.

The new locomotives will be equipped with the latest technological innovations, which will be driven by Toshiba's GPRS systems. These innovations will include black box technology; touch screens and ergonomics through which trip and technical data will be monitored and automatically downloaded via wayside readers as the locomotives enter home depots. This new technology will necessitate that our train drivers undergo training to acquire the requisite skills to operate the new locomotives safely and efficiently.

Please allow me to pause here for a minute to take a look at what the implications for BEE actually are.

MARS is a partnership between Mitsui and Co. Limited, Sibambene Trade and Services Holdings (Pty) Limited and African Sky Innovative Solutions (Pty) Limited. MITSUI has a 59% share in the company and the BEE partners own the remaining 41%. The main subcontractors are Union Carriage and Wagon Partnership, made up of Duduza Rail and Union Carriage and Wagons, and Toshiba, a major Japanese locomotive manufacturer. In fact, there are approximately 43 companies involved in this project with BEE ranging from 5% to 100%.

The involvement of BEE in the high tech rail manufacturing industry and the knowledge and skills transfer that will accompany it, on this scale, is a first for the country. Furthermore, 50% of the contract value will be executed in South Africa and will result in an additional 1 500 direct and indirect employment opportunities. Also it is Spoornet's intention to outsource the maintenance services envisaged in the contract to Transwerk, a division of Transnet, with MARS providing technical support.

For me, improving service delivery and efficiencies through best practice, technological innovations and capacity building within our workforce, is a major source of inspiration. I assure you that the Coal line will be up to the task of meeting the expectations of our customers as we go forward.

We want to assure both government and the nation that Transnet remains committed to assisting government in its chosen path of delivery to lower the cost of doing business and improve the international competitiveness of the South African economy.

I would like to extend my congratulations to MARS and its partners, and indicate that this 5-year agreement will be a partnership built on trust, respect and a commitment to succeed. Such a partnership is designed to improve the quality of Spoornet and to contribute positively to growth and prosperity.

Allow me to conclude by reiterating that we, at Transnet, are committed to delivering efficient logistics solutions at the lowest possible cost while ensuring appropriate investment in the bulk freight market to enable the competitiveness of our economy.

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