Company positions itself to supply new Transnet and Prasa projects

Subsidiary of defence company BAE Systems South Africa Land Systems South Africa’s Gear Ratio division aims to use the opportunities presented by Transnet Freight Rail’s (TFR’s) and the Passenger Rail Agency of South Africa’s (Prasa’s) tender processes by highlighting its gear sets and driveline components manufacturing capabilities.

A major challenge in the railway industry’s renewal programmes is local content requirements. “The required local content for gears is 100% and, given the current raw-material prices in South Africa, which are, on average, 40% more expensive than the costs for imported raw material, we constantly engage in cost-reduction discussions with our local raw-material suppliers to combat this challenge,” notes Land Systems South Africa operations director Piet Kruger.

TFR announced a tender process for dual-voltage electrical freight locomotives and diesel locomotives in 2012.

The tender for the supply of 95 electric locomotives was awarded in the fourth quarter of 2012 to a consortium comprising Chinese manufacturer China South Rail (CSR), Zhuzhou Electric Locomotive and local black economic-empowerment (BEE) consortium Matsetse Basadi.

At the official signing, at TFR’s Capital Park depot, in Pretoria, in October 2012, Public Enterprises Minister Malusi Gigaba said the R2.6-billion contract could lay the platform for South Africa to become a significant locomotive original-equipment manufacturer (OEM) and further develop trade and investment relationships with foreign countries.

In addition, Prasa’s opening bid for the manufacturing of commuter coaches in 2012 was awarded in December that year to Gibela Rail Transportation – a consortium comprising French multinational Alstom and local engineering company Actom. The R51-billion contract entailed the supply of 3 600 passenger trains to the utility over ten years, from 2015 to 2025.

The project is to be funded primarily from fiscal resources and the first metro coaches are expected to enter the aged Metrorail system in about 2015. Prasa currently operates a fleet of 4 638 coaches in Gauteng, KwaZulu-Natal, the Western Cape and the Eastern Cape, but about 90% of this rolling stock was procured in the 1950s, Engineering News reported in December 2012.

The Gibela consortium was among seven bidders vying for the contract, which could form the first phase of a larger R123-billion recapitalisation programme to add 7 200 new metro coaches by 2035.

Kruger says these tenders will act as a catalyst for an increase in capacity and capability in the railway industry; therefore, the company aims to position itself to supply new contracts. “Land Systems South Africa’s Gear Ratio division can manufacture gears at high-quality standards and, being one of only two local gear-manufacturing companies places it in a good position to do so.”

He notes that Gear Ratio implemented a capital renewal programme in 1999 and continuously renews its capital equipment in line with its capital rejuvenation plan. “We invested about R35-million in capital renewal during 2012,” highlights Kruger.

The purpose of the programme is to enable Gear Ratio to compete in the international market with modern technology, which fulfils capability, quality and delivery-schedule requirements.

“This also enables Gear Ratio to tender for local and international tenders,” he says. The division’s throughput times in heat treatment, gear cutting and gear grinding have increased since the implementation of its capital renewal programme, resulting in better delivery times and a reduction in lead times, adds Kruger.