The Passenger Rail Agency of SA (Prasa) will ask the National Treasury for another R11 billion to buy new train coaches.
CEO Lucky Montana told the public services select committee today negotiations with the preferred bidder – the Alstom-led Gibela Consortium – to build new trains had been concluded.
Prasa’s board needed to approve the tender in a meeting planned for tomorrow.
The entire contract to build the new train coaches was worth R51 billion over 10 years.
However, Treasury had only approved an amount of R40 billion.
“In mid-August, Prasa will go back to Treasury, which will look at our contract, the terms of our contract, and say yes it’s fine, we’re happy,” Montana said.
“Once they say we are happy and they are going to give us another R11 billion, we can then go formally and close the deal and sign.”
Prasa was confident Treasury would approve the deal as the need to replace train coaches – some now over 50 years old – had become urgent.
“If you look at an additional R11 billion over a 10-year period, it’s affordable … It’s just R1.1 billion a year and we think it’s reasonable,” Montana said.
If the deal with Gibela got the final nod from Treasury, construction of a factory to manufacture the train sets on the East Rand would begin.
The Prasa board would be asked to approve the names of black-owned companies, which would get a 30% stake in the deal.
“Then on Thursday, we’ll expect the minister of transport to announce the BEE parties, to mention their names and the value of their stake, and so on.”
Simulated versions of what the new modernised and faster trains would look like were presented to MPs.
Over 3 000 coaches would be manufactured in the first decade of the new factory’s operation, and this number would be doubled over a 20-year period.
“In the first quarter of 2015, the first trains will be on the track … Today we are literally about 16 to 18 months away from that.”
Asked whether he thought the time frames were ambitious, Montana said Prasa had made it clear to all the bidders the first trains would have to be up and running by 2015.
Over 70% of the components for the trains would be sourced locally.
However, Montana warned MPs that while the focus was on localisation, there was also a need to import about 20 trains to replace those that were more than 47 years old.
These trains needed to be retired before 2015.
“The production must start now so that we avoid that gap. We don’t want another 10 trains out of the Western Cape system. You can’t let that happen,” Montana said.
A contingency had been built into the R51 billion contract to avoid further deterioration of the system.
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