South Africa trains to have 65 per cent local sourcing

16 February 2012

Want the latest procurement and supply chain news delivered straight to your inbox? Sign up for the Supply Management Daily

16 February 2012 | Angeline Albert

Public sector buyers in South Africa are investigating whether the country’s businesses have enough capability to get involved in supplying new trains and stations.

The Passenger Rail Agency of South Africa (Prasa) will spend R136 billion ($17.5 billion) buying 7,000 trains and modernising stations but must assess the capability and capacity of potential suppliers in order to meet the South African government’s preferential procurement rules.

Prasa said the rolling stock manufacturing supply chain in South Africa must not only be competitive and sustainable and showcase effective implementation of Broad-Based Black Economic Empowerment but also meet localisation targets.

Some 65 per cent of goods and services being procured must be sourced from South Africa as a minimum requirement for qualifying bids. Most components to be used in building of the trains are expected to be made in the country. 

Feedback about local manufacturing supply base’ capability will be gathered via a local market supplier survey, which will be given to international rolling manufacturers to help inform their bids. Armed with this local information, potential bidders must give detailed plans in their bids about how they will meet the 65 per cent local target, including promoting skills transfer in the country. The local supplier survey will particularly focus on manufacturing assembly and refurbishment.             

The views of rolling stock manufacturers will also be sought about local content requirements to help finalise the request for proposal as part of the train manufacturing procurement process scheduled to start by the end of March.

In a statement made on this week, Prasa said: “The local supplier market survey information will be critical for future rolling stock manufacturing during the procurement process as it will enable them to form critical partnerships with local suppliers within the various spheres of rolling stock manufacturing based on the survey outcomes.”

The train components targeted for local production include doors, windows, seats, lighting, heating and ventilation.

The investment was motivated by rolling stock which is 40 years old and nearing the end of its life as well as increasing passenger numbers, The project involves introducing modern rail technology which uses less energy.

According to Prasa's CEO, Tshepo Lucky Montana, the first new trains are expected in 2015, but to create ‘long-term certainty in the market’ the trains will be delivered over a 20-year period. 

Chelmsford or Cambridge
£33,797 - £39,152 p.a
Anglia Ruskin University
South Sinai (EG)
$100,660, 2 year contract, tax free salary, housing, meals, medical, relocation,
Multinational Force and Observers
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates