General Electric Co., Bombardier Inc. and two Chinese companies are reported to have been chosen from the South African state-owned ports and rail operator Transnet SOC Ltd to supply it with new locomotives. This is reported to be part of an investment, which is estimated to 4.7 billion dollars, and aims to restore the aging rail system in South Africa, which has an average age of 33 years, and increase the production and export capacity of Transnet.
The contract is considered as one of the biggest single infrastructure contracts for the region. It is also expected to influence on the transportation lines of coal and iron ore to ports in South Africa.
Brian Molefe, who is the current Chief Executive Officer of Transnet SOC Ltd made a statement, revealing that according to the agreement, 465 diesel locomotives will be supplied by General Electric Co and CNR Rolling Stock, and 599 electric engines will be provided by Bombardier Inc. and CSR Zhuzhou Electric Locomotive.
Mr. Brian Molefe said in the statement, which was cited by Bloomberg: “Ability to stick to an extremely tight delivery schedule was one of the key considerations in assessment of the bids. It is our view that no single supplier would have the capacity or resources to deliver within the timelines we had envisaged.” He also explained that most locomotives, except the first 70 are planned to be manufactured in South Africa, in the plants of Transnet, which are located in Pretoria and Durban.
South Africa, the continents largest economy, has lured investors interest as the region, which is rich on resources, is considered to be one of the fastest growing globally.
As reported by the Financial Times, Transnets Chief Executive Officer added: “This transaction is intended to transform the South African rail industry by growing existing small business and creating new ones. We are going to create and preserve approximately 30 000 jobs.”
General Electric Co. settled 1.27% higher in New York on Monday at $25.43 per share, marking a one-year change of +9.38%. The company is valued at $254.94 billion. According to CNN Money, the 14 analysts offering 12-month price forecasts for General Electric Co. have a median target of $29.50, with a high estimate of $32.00 and a low estimate of $26.00. The median estimate represents a +16.00% increase from the last price of $25.43.
Bombardier Inc. jumped by 4.85% on Monday in Toronto and closed the session at 4.11 Canadian dollars per share, trimming its one-year loss to -3.97% and marking a market capitalization of 7.20 billion.
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