Minister announces Prasa fleet renewal BEE partners

Transport Minister Dipuo Peters on Thursday announced that Khiphunyawo Rail, Community Rail Services and Elgin-Identity Rail Corporation would be the 30% broad-based black economic-empowerment (BBBEE) shareholders of the Gibela Rail Transportation, which had secured a R51-billion rolling stock supply contract with the Passenger Rail Agency of South Africa (Prasa).

Gibela, comprising French multinational Alstom and local engineering company Actom, secured the first ten-year rolling stock supply contract with delivery of the first of 3 600 trains in 2015.

The supply contract formed part of Prasa’s R123.5-billion rolling stock fleet renewal programme, which was funded by, among others, the Industrial Development Corporation and the National Empowerment Fund, would be rolled out over 20 years.

The programme would see the upgrading and expanding of the country’s current rail infrastructure through the introduction of new stock for commuter rail service Metrorail and long-distance locomotives and coaches for Shosholoza Meyl, and by offering more routes between destinations in South Africa.

The second ten-year contract would start from 2025.

Prasa, which had already secured R40-billion in funding from government for the Gibela contract, is currently negotiating with the National Treasury for another R11-billion.

The passenger rail agency said that the three winning bidders adhered to the criteria in its process of selecting BBBEE partners, which sought to procure black enterprises currently involved in the rail sector, black enterprises wishing to enter the rail sector and investor black enterprises.

Black enterprise Khiphunyawo Rail is currently involved in rail and included South African Freight Logistics and Autism South Africa, among others; while new entrant Community Rail Services involved people with disabilities, black female youth, Parmtro Investments and Kaelo Investments.

Investor black enterprise Elgin-Identity Rail Corporation consisted of Elgin Engineering, Identity Capital Partners and the Disability Empowerment Concerns Trust.

The selected entities would also participate in the shareholding of the Prasa and Gibela Rail Transportation employee trusts, as well as the educational trust, aimed at the development of rail sector skills.

“Prasa is of the view that the selected BBBEE entities together with the three trusts, create broader participation, which is one of the objectives of Prasa in its rolling stock renewal programme,” the agency stated.

Peters further said the creation of job opportunities, local content, skills development and community upliftment remained essential to the success of a procurement process of this magnitude.

“We are going to continue, through the Department of Transport, the Department of Trade and Industry and the National Treasury, to provide the required technical and administrative support to all the preferred bidders and Prasa, throughout the project.

“It is our hope that henceforth the processes will unfold smoothly to ensure that there are not delays in the actual implementation phase,” she said.

Prasa started the process of seeking BBBEE participation in October last year. Bidders submitted their proposals on December 14, with a total of 74 proposals received. Of this, 38 complied with the mandatory response requirements and were invited to participate in the next round of bidding, which closed on May 31.