China's CSR Zhuzhou on Track for $306 Million South African Loco Contract

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--South Africa's state-owned transport and logistics utility Transnet (Johannesburg) has signed a $306 million contract with China South Rail (CSR) Zhuzhou Electric Locomotive for the supply of 95 dual electric locomotives. This is the first time Transet has purchased locomotives from a Chinese company.

State-owned CSR Zhuzhou will form a joint venture with the local black economic empowerment consortium Matsetse Basadi to assemble the locomotive in South Africa under the name CSR E-loco Supply.

CSR Zhuzhou will hold 70% of the equity and the South African partners will hold the balance. A letter of intent was also signed between CSR and Transnet Rail Engineering, the group's train-building unit, which will ensure that once the contract has been completed the technology will be transferred to Transnet, said CSR President Xu Zongxiang. He added that winning the contract was an important stepping stone into South Africa for China.

Brian Molefe, Transnet's CEO, said that one of the reasons why CSR beat eight other international rolling stock manufacturers for the contract was because of its ability to start delivering locomotives from December 2014. CSR produces 160 locomotives a month, he said.

Malusi Gigaba, public enterprises minister, said that the contract could lay a platform for South Africa to become a significant locomotive original equipment manufacturer (OEM).

The locomotives will be configured to operate with 3-kilovolt (kV) power on Transnet Freight Rail's kilovolt direct current (DC) and 25-kV alternating current (AC) power supply and will need 3,500 horsepower engines. They will be efficient and save power on Transnet Freight Rail's DS drive technology. They also will be designed to run on South Africa's 1,067-millimeter (mm) gauge track, while in China for a gauge of 1,400 mm to 1,600 mm.

The first 10 locomotives will be delivered in December 2013, and the balance will be assembled in South Africa for delivery by September 2014.

Bidding will continue in the future on the balance of the 465 diesel and 599 electric locomotives in Transnet's $35 billion, seven year investment program. All the major international manufacturers are keen to share in the program as they see it not only as having a profile in South Africa but also as a base to win business throughout Africa as the continent looks to develop its transport infrastructure. For related information see June 28, 2012 -Electro-Motive Diesel, Alstom Seek Roles in South Africa's Locomotive and Rolling Stock Renewal.

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