The South African government on Wednesday announced a consortium led by Alstom had won a $5,8 billion tender to overhaul the country’s passenger railways.
Transport Minister Ben Martins announced that a group led by the France-based firm would build 3 600 vehicles over a 10-year period from 2015 to 2025.
The deal includes heavy black empowerment rules, more or less prohibiting whites from supplying local goods or services to the project.
Alstom is partnered in the rail consortium with Actom, a South African black empowerment company that manufactures electro-mechanical equipment.
Only black empowerment entities will be allowed to become subcontractors, including entities owned by black women.
Other bidders included China North Rail and China South Rail, Spain’s CAF, and Bombardier of Canada.
The contract is the first phase of a planned R123bn 20-year programme to upgrade South Africa’s ageing fleet and network, and meet passenger demand in Africa’s largest economy.
“We’re not just buying trains, we are creating jobs and we are also revitalising our rail engineering industry,” said Lucky Montana, chief executive of the state-run Passenger Rail Agency of South Africa.
“This is much more than a train purchase. We are reviving our rail engineering sector, contributing to skills development and job creation amongst other bigger objectives,” said Ben Martins, the South African transport minister.
The South African government plans to spend R844.5bn on infrastructure in the next three years, and about R3.6tn over a 20-year period.
Alstom is a large French multinational conglomerate which holds interests in the power generation and transport markets. According to the company website, in the years 2010-2011 Alstom had annual sales of over €20,9 billion, and employed more than 85 000 people in 70 countries. Alstom’s headquarters are located in Levallois-Perret, west of Paris. Its current CEO is Patrick Kron.