Transnet procurement to boost local economy

29 March 2011

29 March 2011 | Lindsay Clark

A procurement programme by state-owned logistics group Transnet will become a major driver of economic growth in South Africa, according to the country’s public enterprises minister, Malusi Gigaba.

Last week, Gigaba said the country was well placed for economic growth thanks to extensive fleet investment by Transnet. Speaking at the CommonMarket for Eastern and Southern Africa (COMESA) conference in Dubai, he explained that Transnet faced major infrastructure problems, because the average age of its rolling stock is 26 years. As a result, the company plans to spend billions of rand on rail-related equipment and infrastructure.

“The massive recapitalisation programme of Transnet is regarded as having the potential to become a major driver for economic growth in South Africa,” continued Gigaba. “Much attention and effort is being given to increasing local spend, and to use this capital expenditure programme to entrench world class technologies, suppliers and service providers in South Africa.”

The country’s Competitive Supplier Development Programme (CSDP) would reduce the amount of imports necessary to fulfil the investment, while increasing the long-term economic benefits for the local supplier industry, he added.

Gigaba also voiced his support for Africa’s North South Corridor, an economic development plan that includes investment in rail, road and port infrastructure. Launched in April 2009, the project is backed by COMESA, the East African Community, and the Southern African Development Community. Gigaba said South Africa’s contribution was to focus particularly on economic cooperation between COMESA member states, and to try to address any supplier constraints.

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