GE May Supply Locomotives for $3.2 Bln Transport Project in South Africa

Written by Makula Dunbar

Mar 14, 2014

General Electric Co. will probably be named preferred bidder to supply 465 diesel locomotives to South Africa’s state-owned Transnet SOC Ltd. as part of a $3.2 billion investment, according people familiar with the matter.

Another manufacturer is set to be named preferred bidder for a contract to supply 599 electric locomotives, said the people, who declined to be identified because the decision isn’t public yet.
Africa’s largest economy is buying the diesel and electric locomotives to upgrade the country’s transport infrastructure and improve export capacity.

The government has said the R35 billion ($3.2 billion) earmarked for the more than 1,000 locomotives will be spent over a seven-year period. Transnet, which operates railways, ports and pipelines, plans to spend a total of R307 billion over that period.

The Department of Public Enterprises, which oversees Johannesburg-based Transnet, yesterday said they will announce “one of the biggest infrastructure transactions in South Africa” on March 17.

The diesel locomotive contract may be worth less than $1 billion, based on calculations using prices Transnet paid in a different order announced in September.

Transnet spokesman Mboniso Sigonyela declined to comment on the deal. GE bid on the contract to supply diesel locomotives, spokeswoman Jennifer Erickson said in an e-mailed response to questions. She declined to comment further.

Alstom SA, the French maker of trains and power equipment, responded to the locomotive tender in early 2013 and is now waiting for its outcome, said spokeswoman Virginie Hourdin.