Prasa selects Alstom consortium for $5.9bn rail coach supply contract

9 December 2012 (Last Updated December 9th, 2012 18:30)

A consortium led by the French power company Alstom has been selected as preferred bidder by Passenger Rail Agency of South Africa (Prasa) to supply 3,600 new passenger coaches worth R51bn ($5.9bn) under the first phase of a 20-year fleet renewal programme.

A consortium led by the French power company Alstom has been selected as preferred bidder by Passenger Rail Agency of South Africa (Prasa) to supply 3,600 new passenger coaches worth R51bn ($5.9bn) under the first phase of a 20-year fleet renewal programme.

Alstom partnered with South African electrical engineering firm Actom, forming the Gibela Rail Transportation consortium, to submit a bid to upgrade South Africa’s ageing fleet, which is expected to create employment for more than 8,000 people.

South Africa’s Transport Minister Dikobe Ben Martins, who announced the bidding results, said a long journey still lies ahead for the procurement programme.

"This process is much more than a train purchase; we are reviving our rail engineering sector, contributing to skills development and job creation among other bigger objectives," Martins said.

Under the programme, the consortium will be required to build the electric multiple units (EMUs) over ten years, between 2015 and 2025, and maintain them up to 2033 along with spares supply.

"A long journey still lies ahead for the procurement programme."

In April 2012, Prasa requested proposals for the contract and received several bids including some major bidders such as Canada’s Bombardier, Spain’s Construcciones y Auxiliar de Ferrocarriles and China North Rail Prasa, along with the Alstom-Actom consortium.

Prasa CEO Lucky Montana said that only three out of the seven bidders were able to fully meet the technical requirements of the bid.

Alstom offered to build each EMU for R9m ($1m) against Prasa’s initial cost estimates of between R12m ($1.4m) and R16m ($1.8m).

Under the first phase, Gibela Rail Transportation will deliver the first test trains in the first quarter of 2015 with an option to develop two types of six-car trains, one with a carrying capacity of 1,346 passengers and another with capacity for 1,186 passengers.

The consortium is planning to build a factory in South Africa to construct the coaches and has earmarked R32.8bn ($3.8bn) for subcontracts within South Africa to reach 69% local content for the project, which is above the country’s minimum requirement of 65%.

The deal is expected to be finalised in June 2013.