China South Rail (CSR), a Chinese equipment manufacturer, will take the biggest share in the R50.4 billion contract forthe productionof new-generation locomotives for Transnet, a South African state-owned transport company, whohas announced the names of the four successful bidders on 17th March 2014. Transnet said this was South Africa’s largest locomotive supply contract.


CSR Zhuzhou Electric Locomotive, who had signed an R2.6bn contract with Transnet for building 95 electric locomotives back in 2012, will produce another 359 electric locomotives for the South African state-owned company.The value of CSR’s contract is R14.6bn.


CSR president Liu Hualong said that CSR would deliver the “best quality” products on the ground that CSRisa leading company in the industry and China is known as “the home of electric locomotives”. When it comes to the key factors that helped CSR win the bid, President Liu said, “First of all, we have a highly complete system for electric locomotives R&D and manufacturing. The system guarantees our capability of developing and producing the locomotives.” Liu also said that CSR’s 23 subsidiaries have4 engineering testing centers, 9 national design centers and 7 national testing centers, which fully demonstrates CSR’s competence of delivering the orders.


Transnet Freight Rail chief executive Siyabonga Gama said, “We are very happy with the first 10 locomotives that we have received from CSR. In fact they are of an above-average standard. Our engineers are pleasantly surprised. We don’t foresee that we are going to get any problems from the locomotives. CSR delivered the first batch of the 95 class E20 locomotives after only eight months, well ahead of schedule, and Transnet will put some of these CSR locomotives into operation next month.”

Transnet said the first batch of the 359 locomotives would be delivered in about 15 months. Although Transnet’s fleet procurement program is a five-year project, the delivery of all the locomotives would be shortened into just three and a half years.


All the remaining 85 locomotivesinthe 95 projectand the 319locomotivesinthe 359 project will be manufactured and assembled in South Africa at Transnet Engineering’s plants in Koedoespoort, Pretoria.


Over 100 South African technical staffers from Transnet Engineering were dispatched to Zhuzhou in China for training from July 2013 to November 2014. After that, CSR also dispatched more than 100 technical engineers and experts to South Africa to support the production in Transnet Engineering. At this moment, the first five locomotives manufactured by Transnet Engineering have been completed and delivered to Transnet Freight Rail.


CSR is also following closely South Africa’s localization requirements. What CSR will be exporting is certain electronic technologies. In the contract, there is a formal plan aboutfuture capacity-building facing the fact that at least 600 technicians and engineers will be required for the new locomotive project. However, in addition to working with Transnet Engineering, CSR will also be sourcing systems and components from other South African rail suppliers.


CSR’s output of technical equipment is not only based on advanced technologies, but also takes into account the actual requirements of the client. South Africa is characterized by long distances, harsh weather and challenging geography. In this context, CSR ZELC has designed a locomotive tailored for South Africa’s conditions. The locomotives that will be manufactured in South Africa will have a local content of over 60%. Substantial technology transfer will also be included. By doing so, South Africa’s rail maintenance and manufacturing capability will be considerably strengthened. Once the 359 locomotives manufacturing process is underway, 12 units will be completed per month and the whole order will be completed in 2018.

Through local procurement, industrialization, technology transfer, skills development to Transnet and other local suppliers, creating and preserving more local jobs, promoting the development of small businesses and rural areas, this transaction aims at transforming the South Africa’s rail industry by growing existing small businesses and creating new ones.