South Africa: R56bn (US $5.55 billion) train deal gets the green light

June 27, 2013

Africa, Business, International

South Africa: R56bn (US $5.55 billion) train deal gets the green light

South Africa Train

By Anna Cox
The Star

The R56 billion ($5.55 billion US), 10-year project to replace and transform South Africa’s passenger rail industry into a world-class service is going ahead.

A recent visit by The Star to Alstom, the company that forms part of the Gibela Rail Transportation consortium, shows that it is ready to start the transformation of South Africa’s passenger service.

The Passenger Rail Agency of South Africa (PRASA) has 4,638 coaches in its Metrorail operations in Gauteng, Durban, the Western and Eastern Cape.

Of these, 90 percent date from the 1950s, and no new stock has been acquired since the mid-1980s.

Alstom, which has its headquarters near Paris in France, forms part of the consortium named by the national Department of Transport as the preferred bidder in December.

Andreas Knitter, Alstom senior vice-president: transport in charge of South Africa, told The Star that they are committed and excited about the contract.

“South Africa is paradise to work in,” he said.

“We have a long involvement with the country and are very pleased to be part of this project, which is the largest we have won in 10 years. The tender was one of the most competitive, professional and well-run processes in which we have participated. All deadlines were adhered to.

“We’re ready to reaffirm our commitment to the country by taking part in this exciting new challenge.”

PRASA has estimated that it will need 5,256 cars to cope with increasing passenger demands by 2020, and a further 456 for projected growth to 2030.

The initial contract involves the replacement of about 3,600 coaches, to be built between 2015 and 2025.

The estimated costs of each coach was between R12 million ($1.19 million US) and R16m ($1.59 million), but Alstom will provide them at R9m ($892,647 US).

The programme allows for the production of two types of 6-car trains – one designed to carry a maximum of 1,346 passengers and the other a maximum of 1,186 passengers.

The second phase will probably increase the number of coaches to 7,224 vehicles, with a value of about R123bn ($12.19 billion US).

The initial phase, starting next year, will result in the direct creation of 8,088 direct jobs. The first test trains are expected to arrive in the first quarter of 2015.

The first eight will be built in Brazil where the Alstom factory specialises in aluminium frames, which are required in South Africa.

Thereafter, a factory will be built here where the trains will be made from scratch, unlike with the Gautrain, whose coaches were assembled in a factory in Nigel.

Alstom says it will exceed the 65 percent minimum local content requirement within the second year of the contract and ultimately reach 69 percent. It has undertaken to spend R32.8bn ($3.25 billion US) on subcontracting to black empowerment entities. Another R5.3bn ($525.67 million US) will be spent on subcontracting to small, medium and microenterprises.

The consortium has also agreed to spend R746m ($73.99 million US) on “the development of enterprises in the rail sector”, R273m ($27.08 million US) on socio-economic development and R797m ($79.05 million US) on skills development.

Alstom forms part of the Gibela Rail Transportation, which is a consortium made up of Alstom and local electrical engineering firm Actom.

At the time of the announcement of Gibela as the preferred bidder, Transport Minister, Ben Martins said: “This process is much more than a train purchase. We are reviving our rail engineering sector and contributing to skills development and job creation, among other bigger objectives.”


Passenger Rail Agency of South Africa

Passenger Rail Agency of South Africa

Passenger Rail Agency of South Africa


Prior to 1990, road and rail based passenger services were provided by the South African Transport Services (SATS), a state-owned entity.

From 1 April 1990, these functions became the responsibility of Transnet Limited and the South African Rail Commuter Corporation Limited (SARCC), companies created in terms of the Legal Succession to the South African Transport Services Act, (Act 9 of 1989).

Commuter rail services were transferred to the SARCC but long distance (both road and rail) passenger services continued to be provided by Transnet, which created a number of operating divisions including Spoornet and Autonet, the forerunner of Autopax.

The assets required to operate commuter rail services were allocated to the SARCC on the basis of usage at the time. During 1992, a wholly-owned subsidiary company, Intersite Property Management Services (Pty) Ltd (IPMS), was formed to manage and develop the newly transferred property portfolio.

Transnet operated the commuter rail assets on behalf of the SARCC through Metrorail – an operating unit of Spoornet – until 1996 when Metrorail became a business unit of Transnet.

Under this arrangement, the SARCC owned the commuter rail assets and retained responsibility for capital expenditure and asset maintenance. Metrorail was deemed responsible for operational maintenance. However, the lack of clarity on roles led to problems that impacted negatively on the maintenance of the commuter asset base.

Commuter Rail Services

Metrorail: Metro | MetroPlus | Business Express Services

Metrorail is responsible for transporting over 2.2 million passengers in the following operational areas: Gauteng, Cape Town, Durban and Eastern Cape at 317 stations of the 468 stations that Metrorail operates in, the remainder belongs to Transnet Freight Rail. The rolling stock fleet of 406 train sets comprises coaches which were built between 1958 and 1985. Fewer than 3 percent of the fleet are coaches that were bought in the mid-eighties with relatively newer technology. Diesel locomotives are leased to assist with yard operations and provide the traction supply for the Eastern Cape services. Established as a fully fledged business unit of Transnet in 1996, Metrorail has focused on the delivery of commuter rail services in six major metropolitan areas, while assuming responsibility for the maintenance of the operational asset base.

Business Expresses
South African rail commuters are now travelling to their destinations in style.

When the idea of a luxury commuter train was first mooted in 2006, most couldn’t even imagine it becoming a reality. Yet, since the Wits Metrorail region unveiled South Africa’s first luxury commuter train at Naledi Station, Soweto, in 2007, the highly successful service has caught on and now includes the popular Khayelitsha business express service, as well as those between Strand and Cape Town in the Western Cape, and between Pretoria and Johannesburg in Gauteng.

The concept was simple: change the public’s perception of rail by:

  • demonstrating the comfort and convenience of train travel;
  • providing commuters with a choice of rail services;
  • restoring dignity to rail travel; and
  • responding to customer willingness to pay for a superior service.

The express trains sport brand new livery and are instantly recognisable. The comfortable seats, curtains and carpets ensure a fresh and luxurious look. Onboard services include cabin and security crew, a complimentary daily newspaper and refreshments. The Strand to Cape Town Premium Express also boasts two LCD screens per carriage allowing state-of-the-art onboard communication.

Fast Facts:

  • Area: Soweto to Johannesburg
  • Seating Capacity: 360
  • Stopping Stations: Naledi, Dube, Johannesburg Park Station
  • Average Travel Time: 90 minutes


  • Area: Huguenot to Cape Town
  • Seating Capacity: 300
  • Stopping Stations: Paarl, Kraaifontein, Brackenfell, Stikland, Cape Town
  • Average Travel Time: 70 minutes


  • Area: Pretoria to Johannesburg
  • Seating Capacity: 520
  • Stopping Stations: Pretoria, Centurion, Kempton Park, Johannesburg Park Station
  • Average Travel Time: 90 minutes


  • Area: Strand to Cape Town
  • Seating Capacity: 252
  • Stopping Stations: Strand, Somerset West, Firgrove, Eerste River, Kuilsriver, Mutual, Cape Town
  • Average Travel Time: 70 minutes

Mainline Passenger Services
Main Line Passenger Services comprised of Shosholoza Meyl, and Luxrail (Premier Classe), provides regional inter-city passenger rail services, currently operating within the borders of South Africa. In addition to offering passenger services, the business offers transportation of excess baggage, and cars on certain routes. The current routes are mainly between Johannesburg (Pretoria) and the main cities (Cape Town, Durban, Hoedspruit, East London, Port Elizabeth, Musina, Komatipoort and Bloemfontein) in South Africa.

It is envisaged that cross border train services will be resumed in future.

Shosholoza Meyl: Economy | Tourist Class
Shosholoza Meyl promises that each customer will be treated to “a pleasant experience” from the moment they book, and buy their ticket, throughout their journey by train until they disembark at the end of their destination.

Shosholoza Meyl, currently services twenty-one routes between major destinations in South Africa. It carries over 3.9 million passengers per annum, many of whom are migrant workers travelling between the rural areas and the Metropolitan centres of South Africa as well as migrant workers from neighbouring countries such as Mozambique, Malawi, Zimbabwe, Lesotho and Zambia. The sitter or economy class travellers contribute 87.5% of the total revenue of the business. In addition to this core basic service, Shosholoza Meyl also provides Premier Classe trains, Tourist Class trains, baggage and car transportation. The different services are explained briefly hereunder.

Shosholoza Meyl currently stops at 95 stations under the ownership of either PRASA or Transnet Freight Rail (TFR). Shosholoza Meyl owns 1223 rail coaches, of which some 1086 are currently used for passenger transport. The fleet is aging and 33% of the coaches are older than 30 years, while all coaches in service are older than 20 years. Shosholoza Meyl is materially reliant on Transnet Freight Rail (a division of Transnet) for the provision of the railway track and support services such as train control to enable it to operate.

This is a new section of the business that is focused on providing luxury services on specific routes and offering tailor made products to the requirements of the targeted market segments. These services will be positioned and operated such that they cover their own operating cost. The product currently offered is this segment is the Premier Classé train. The Premier Classé service is our window to a world in one country which will take our customers to places they have never been before – from rugged snow capped mountains to wide open plains to the crashing waves of the ocean side – and take their imagination to that place where the sun never sets.

Luxrail is expecting that in the near future The Blue Train will be transferred from Transnet to PRASA (Rail Operations), and will also form part of Luxrail division.

Premier Classe
The Premier Classe was first introduced in 2001 with only four coaches accommodating 24 guests. In 2006 it became a dedicated luxury train with eleven coaches accommodating 84 guests, travelling between Johannesburg and Cape Town twice a week. Our newest train introduced in October 2007 accommodates 126 guests.

The moment you board the Premier Classe train, you step into a world that recaptures the elegance of a bygone era of luxury train travel, enhanced by the convenience that modern technology affords. We accommodate 126 passengers in the sheer luxury of our spacious compartments and lavishly appointed bathrooms. Our highly-trained staff members anticipate your every need, making sure that your time spent with them is the trip of a lifetime.







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