Transnet has secured R6-billion from South African financial institutions to fund the first tranche of its R50-billion locomotive acquisition programme, Transnet Group chief executive Brian Molefe announced yesterday.
Molefe signed agreements with Standard Bank, Absa-Barclays and Old Mutual which raised R1.5-billion towards the funding for 293 locomotives to be manufactured by American company General Electric in Pretoria.
The locomotive programme is set to see the country returning to rail as a means of transporting goods over the long haul and reduce the use of trucks.
The Border-Kei Chamber of Business (BKCOB) applauded Transnet for its ability to raise funding and meet the country's logistics challenges.
The procurement of a total of 1064 locomotives was concluded last year between Transnet and General Electric, German company Bombadier and Chinese companies Chine North Rail and China South Rail Zhuzho Electronic Locomotive.
Yesterday Molefe said the rollout of the first locomotives would start in July this year following the funding agreements.
“The first agreement is a R6-billion US-Exim Bank funding of 293 locomotives built by General Electric. R2.25-billion of the funds in terms of the guarantee were raised from Absa/Barclays, R2.25-billion from Standard Bank and R1.5-billion from Old Mutual,” said Molefe.
Yesterday Investec Bank Limited and Export Development Canada also signed agreements to raise R1.74-billion and R5.24-billion for locomotives to be manufactured by Bombadier in Durban.
BKCOB executive director Les Holbrook said: “The main thing is that Transnet’s rail revitalisation is key to SA’s economic growth.
“It has been able to respond to freight challenges in South Africa. We should be doing much more trade by rail versus road. The funding model sounds very workable and diversified. Sometimes we get worried when companies' funding models put all their eggs in one basket.”
Molefe said two-thirds of the funding for the locomotives would be raised from Transnet’s own “kitty” as well as bonds ,adding that the R6-billion from South African financial institutions was guaranteed by US-Exim.
“In the current financial year we are on track to meet our target of R22.4-billion from the capital markets including the issuance of an international bond, listed in London and subscribed by investors from the United States and Europe,” said Molefe.
The locomotive acquisition programme is part of Transnet’s R310-billion seven-year Market Demand Strategy launched in 2012 in a bid to boost the state owned company’s capital investment to provide better services for its customers which include Mercedes-Benz South Africa, Volkswagen Group SA and General Motors SA.
“…More importantly this programme is critical in our pursuit of the crucial goal of migrating rail-friendly cargo off our roads,” said Molefe. — siyam@dispatch.co.za
Billions for Transnet’s expansion programme
Molefe signed agreements with Standard Bank, Absa-Barclays and Old Mutual which raised R1.5-billion towards the funding for 293 locomotives to be manufactured by American company General Electric in Pretoria.
The locomotive programme is set to see the country returning to rail as a means of transporting goods over the long haul and reduce the use of trucks.
The Border-Kei Chamber of Business (BKCOB) applauded Transnet for its ability to raise funding and meet the country's logistics challenges.
The procurement of a total of 1064 locomotives was concluded last year between Transnet and General Electric, German company Bombadier and Chinese companies Chine North Rail and China South Rail Zhuzho Electronic Locomotive.
Yesterday Molefe said the rollout of the first locomotives would start in July this year following the funding agreements.
“The first agreement is a R6-billion US-Exim Bank funding of 293 locomotives built by General Electric. R2.25-billion of the funds in terms of the guarantee were raised from Absa/Barclays, R2.25-billion from Standard Bank and R1.5-billion from Old Mutual,” said Molefe.
Yesterday Investec Bank Limited and Export Development Canada also signed agreements to raise R1.74-billion and R5.24-billion for locomotives to be manufactured by Bombadier in Durban.
BKCOB executive director Les Holbrook said: “The main thing is that Transnet’s rail revitalisation is key to SA’s economic growth.
“It has been able to respond to freight challenges in South Africa. We should be doing much more trade by rail versus road. The funding model sounds very workable and diversified. Sometimes we get worried when companies' funding models put all their eggs in one basket.”
Molefe said two-thirds of the funding for the locomotives would be raised from Transnet’s own “kitty” as well as bonds ,adding that the R6-billion from South African financial institutions was guaranteed by US-Exim.
“In the current financial year we are on track to meet our target of R22.4-billion from the capital markets including the issuance of an international bond, listed in London and subscribed by investors from the United States and Europe,” said Molefe.
The locomotive acquisition programme is part of Transnet’s R310-billion seven-year Market Demand Strategy launched in 2012 in a bid to boost the state owned company’s capital investment to provide better services for its customers which include Mercedes-Benz South Africa, Volkswagen Group SA and General Motors SA.
“…More importantly this programme is critical in our pursuit of the crucial goal of migrating rail-friendly cargo off our roads,” said Molefe. — siyam@dispatch.co.za
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