Official: Alstom Wins $5.8 Billion South Africa Rail Tender

JOHANNESBURG -- The South African government on Wednesday announced that a consortium led by Alstom (IW 1000/159) has won a $5.8 billion tender to overhaul the country's passenger railways.

Transport Minister Ben Martins said a group led by the France-based firm will build 600 trains and 3,600 wagons over a 10-year period from 2015 to 2025.

"This process is much more than a train purchase," Martins explained. "We are reviving our rail-engineering sector, contributing to skills development and job creation amongst other bigger objectives."

Alstom, along with local affiliate Actom, beat seven other bidders, including Switzerland's Stadler Rail AG, Bombardier Inc. (IW 1000/241) and China CNR Corp.

It is the first phase of a much bigger, $14 billion project to revamp the country's Metrorail system, including the building of 7,224 commuter trains for Gauteng -- including Johannesburg and Pretoria -- Durban, the Western Cape and Eastern Cape.

Some 90% of the current rolling stock is said to date back to the late 1950s.

The South African government expects the project to create around 65,992 much-needed jobs, with the first trains expected to be delivered in 2015.

At least 65% of the project will be built locally.

"We have been informed by the client that we are the preferred bidder," an Alstom company source in Paris said.

"The project will not be signed for another few weeks or months."

Alstom also is supplying steam turbines to South Africa's mega coal-power station, which is under construction.

Earlier this year, government announced major infrastructure-development projects worth billions of dollars, in a push to kickstart economic growth.

Other long-term projects include the upgrade of the country's ports, housing and water infrastructure.