Alstom has agreed to buy a 51% share in South African rail company Commuter Transport & Locomotive Engineering (CTLE).

The company is buying stake from Commuter Transport Engineering (CTE) and Industrial Development Corporation (IDC), which will remain shareholders.

CTLE specialises in the modernisation of trains.

Following finalisation of the agreement and securing approval from the South African antitrust authorities, Alstom will launch an integration project that will extend the activities of CTLE to include infrastructure, signalling, trains and components.

"This is a win-win partnership that will strengthen the rail sector in South Africa."

The integration project aims to strengthen Alstom’s structure through the development of local competencies and the support of its experts.

The acquisition is expected to strengthen Alstom’s presence in the region and allow for the creation of a stronger industrial and commercial base. It would help the company to provide a broader range of rail products to the South African rail market.

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By GlobalData

Based in Ekurhuleni near Johannesburg, CTLE currently has 450 employees and generated a turnover of more than €15m last year.

CTLE will benefit from Alstom’s global presence in rail transport, new technologies and processes.

Alstom Middle-East and Africa senior vice-president Gian-Luca Erbacci said: "This is a win-win partnership that will strengthen the rail sector in South Africa, boost its economy and, in the long term, address the needs of other countries in the Southern African region."

Last April, Alstom has concluded a €4bn contract with Passenger Rail Agency of South Africa (PRASA) to supply 600 X’Ttrapolis Mega commuter trains, which will be operated on the 1.067m gauge in the country.

The contract was originally signed by both companies on 14 October 2013 and includes construction of a 600,000m² manufacturing facility in Dunnottar, which will house an engineering centre and training facility.

Alstom-led joint venture and South African rail company Gibela is responsible for providing technical support and spare parts for the trainsets over a period of 18 years.

Of the 600 trainsets, the first 20 will be developed at Alstom’s Lapa plant in Brazil and the remaining 580 trains will be produced at the proposed Dunnottar facility.

Image: CTLE specialises in the modernisation of trains. Photo: courtesy of Alstom Transport.