Monday, August 3, 2009

south african R80bn passenger-rail upgrade could be approved later this year – Prasa CEO

The newly established Passenger Rail Agency of South Africa (Prasa) hopes to receive the go-ahead from Cabinet later this year for a proposed R80-billion, 6 800-coach new rolling stock programme, Prasa CEO Tshepo Lucky Montana said this week.

The new coaches would be deployed by commuter rail specialist Metrorail, a division of the State owned Prasa.

"We expected the decision on whether we could go ahead with the project last year, but then the political landscape changed, and the economic recession hit.

"I really hope it can happen this year, as the lead time on procuring new rolling stock is three years, and we can't really wait any longer," Montana outlined.

Speaking with Engineering News Online on the sidelines of a rail conference in Johannesburg, he confirmed that the recapitalisation programme was still a priority, despite the change in South Africa's administration in May.

"Under the programme, we will need around 560 to 600 new coaches a year for ten to 12 years," says Montana.

This number was reportedly aligned to projected passenger growth, which was currently expanding at 8% a year.

Montana said that the current R7-billion, three-year medium-term framework coach refurbishment project was merely sustaining Metrorail fleet operations, and would do so for the next five years. But, he argued that the company had "come to the point, where it needs to implement a replacement strategy. The refurbishment project is buying us time, but it is not a long-term solution."

He regarded the current economic downturn as the ideal time to implement the new capacity plan. "If we use this time, we won't have overcrowding when the upswing happens. I hope government shares this view, and regards this programme as extremely important. We can't postpone any further."

Metrorail currently refurbishes around 700 coaches a year, up from 180 coaches three years ago.

"Once government gives the formal stamp, we will invite bidders to tender for the project. We envisage that this will not be a sole Prasa project, but that the National Treasury will also be involved," Montana elaborated.

There would, no doubt, be some strings attached for the winning bidders, particularly given government's stated intention of building industrial capacity around infrastructure developments.

Hesitant to discuss details before the issuance of the tender, Montana confirmed that the aim would probably be to limit the imported component, and to build capacity and skills to manufacture the rolling stock locally.

"We have taken the decision to not destroy our local industry. However, we urge industry to use the refurbishment programme to become more competitive. We can't act in a protectionist fashion. We have certain World Trade Organisation obligations."

Partnerships between local and international companies might be promoted, especially given the magnitude of the proposed recapitalisation tender.