South African freight and logistics company Transnet has signed a memorandum of understanding (MoU) with Chinese locomotive manufacturer CSR Zhuzhou Electric Locomotive (CSR) to build manufacturing facilities in South Africa.
The new manufacturing plants will carry out the production and maintenance of electric locomotives, as well as core rail equipment and components for African markets. The agreement was signed in the wake of the official visit of South African President Jacob Zuma to China.
It is reported that CSR has provided 95 electric Class 20E locomotives to Transnet, with an estimated price tag of R2.7 billion
In addition, this agreement will also allow the establishment of a research and development facility, joint initiation and development of business opportunities in Africa, in addition to the construction of a refurbishment and manufacturing plan.
The countries will carry out possible skills transfer programmes, including the setting up of a training centre in South Africa.
Transnet spokesman Mboniso Sigonyela was quoted by Independent Online as saying: “In terms of the agreement, Transnet and CSR will contribute their respective expertise and will leverage their unique expertise and experience and provide access to the know-how of their highly qualified and specialised business divisions.”
In the initial stage, CSR will deliver the technology to Transnet to manufacture and maintain locomotives and core rail components at its facilities. CSR is expected to develop a joint venture with Transnet and that entity will be based in South Africa.
In 2014, Transnet ordered 599 electric and 465 diesel locomotives from four manufacturers, including CSR with the support of a $557.7 million funding guarantee from US export credit agency US-Exim.