PRASA

COMPANY PROFILE

2013

Travelling on the right tracks

COMPANY REPORT

PAGE 2 MAR 13

Transport in South Africa is an industry which is of vital importance to the whole nation. Whether you rely on the transport infrastructure to get you to work or to facilitate your business, the movement of goods and people around the country is a flow which cannot afford to be interrupted.

It is nearly 1250 miles from Cape Town to Kruger Park. In a car, this would represent nearly one whole day of travelling. With such a vast land mass for people and products to migrate across, the transportation network cannot allow anyone to be travelling down a blind alley.

One of the organisations with major involvement is South African travel and transport is the Passenger Rail Association of South Africa (PRASA). PRASA in government enterprise responsible for most passenger rail services in the country. It is made up of four main branches: Metrorail, which operates commuter rail services in urban areas; Shosholoza Meyl, which operates

regional and inter-city rail services; Autopax, which operates regional and inter-city coach services; and Intersite, which manages the property owned by PRASA.

The various divisions of PRASA are responsible for transporting millions of people around urban areas, literally driving business and commerce in the country.

PRASA was established because of the need for improvements in the performance of passenger rail services.

The organisation’s key objective is to promote rail as the preferred mode of transport for the masses. In the past it has been suggested that the public transport system did not promote efficiency, innovation and accountability, therefore the establishment of PRASA, at the forefront of Government efforts to transform public transport in South Africa, with rail services forming the backbone of the network, has been welcomed by the wider population.

Travelling on the right tracksEditorial – Joe Forshaw

Production – Chris Bolderstone

PRASA are upgrading and improving rail services across the whole

country. The company, which is in charge of Metrorail and other

premier bus and rail services, has some major projects underway

and IndustrySA takes a look at big investments announced recently.

MAR 13 PAGE 3

PASSENGER RAIL AGENCY OF SOUTH AFRICA

Travelling on the right tracks

The essence of PRASA is to integrate inter-modal facilities and services into public transport solutions that optimise the performance of the whole transport system.

The funding for PRASA comes mainly (70%) from the government.

The rest of the funding comes from internally generated cash flow and this is something which PRASA will be looking to grow over the coming years. Increasing fares, exploiting its assets and increasing passenger numbers are all methods that the organisation views as possibilities to help boost internal cash flow.

PRASA’s primary target over the coming years is to upgrade the existing passenger railway system in order to meet the challenges of an increasingly modern and developing society.

This will include implementing plans for the modernisation of the signalling, telecommunications systems, rolling stock and train operating systems.

ROLLING STOCK UPGRADES

Upgrades to the country’s rail infrastructure have been on-going for some time now with great progress being made.

The upgrade of rolling stock is a major investment for PRASA. Rolling stock refers to all vehicles that move on a railway track and PRASA made the decision in December

that the Gibela Rail Transportation consortium, led by French company Alstom and SA engineering company Actom, would receive a multi-billion rand contract to design, manufacture and supply new trains and wagons as part of the on-going upgrades.

“The ageing fleet combined with rapidly growing passenger need has led PRASA to focus on scaling the rolling stock investment as part of a broader strategy to acquire modern technology to meet changing demands,” says Lucky Montana, PRASA Group CEO.

“The Prasa rolling stock fleet renewal programme is the catalyst for the transformation of Metrorail services and public transport as a whole.

“The average age of the current coaches is 39 years, while the lifespan of railway rolling stock is of the order of an average 46 years,” says Mr Montana.

“Prasa has in the past two years intensified its efforts to invest significantly in new rolling stock over the next 20 years, with the first trains expected to be delivered in 2015.”

Metrorail passengers in the Western Cape, Eastern Cape, Durban and Gauteng are serviced by some 4700 coaches, 90% of which are from the late 1950s.

In the 20 years between 2015 and 2035, PRASA’s investment in rolling stock will look to add over 7000 electrical carriages to its portfolio.

COMPANY REPORT

PAGE 4 MAR 13

This investment has been divided into three sub-categories: 5256 vehicles to meet existing rail passenger demand on the current network until 2020; 456 vehicles to satisfy growth in rail passenger demand on the existing network until 2030; and a further 1512 vehicles to meet long-term rolling stock needs as part of future expansion.

ECONOMIC DEVELOPMENT Like any major investment, PRASA’s new rolling

stock programme will bring more than just improved rail transportation to the economy.

As Gibela Rail Transportation supply 3600 new vehicles, over the next ten years, they will create over 8000 jobs. The company will also be involved with maintenance and technical support for the next 18 years, also contributing to job creation.

Gibela will also spend R797 million on skills development initiatives, R746 million on enterprise development in the rail sector and R273 million on socio-economic development contributions – all factors that helped the company become the preferred bidder on the project.

Social responsibility is something to which PRASA remain dedicated. The company says: “CSI has become an integral part of PRASA’s business, we recognise

our responsibility as a corporate citizen towards our stakeholders and the communities within which we operate. PRASA remains committed to sustainable development in aligning its corporate objectives to that of its performance as a corporate citizen.”

As with other major investments in the country, the rolling stock upgrades have requirements in place to ensure sufficient amounts of local content and knowledge are used in production.

A target of local content of 69% by the second year of the project was set, in addition to preferential procurement policies such as R32.8 billion to be spent on subcontracting to black empowered organisations, R5.3 billion on subcontracting to suitable small enterprises and some micro-enterprises and R1.6 billion on entities owned by black women.

“While the urgent challenge to improve passenger services remains primary, the rolling stock fleet renewal programme has been designed to achieve a number of key government objectives,” says Mr Montana.

“This will include the delivery of quality services to citizens, revitalisation of South Africa’s rail engineering industry through local manufacturing and ensuring local content as part of government’s Industrial Policy Action Plan, employment creation, skills development and broad-based black economic empowerment.”

MAR 13 PAGE 23

PASSENGER RAIL AGENCY OF SOUTH AFRICA

PAGE 6 MAR 13

COMPANY REPORT

IMPROVEMENTS ON TRACKAs well as the major upgrades of rolling stock, PRASA

has been involved with improvements across the entire spectrum of rail services.

In the last financial year, 98 station improvement projects were carried out to develop safety, cleanliness and signalling.

Modernised speed gates, costing R1.9 billion, would also be set up at numerous stations across the country ahead of the introduction of a single transport card for bus and train commuters.

Mr Montana says that PRASA would like to extend rail lines and a number of projects would be developed, including a Johannesburg-Durban High Speed Rail link, to reduce transport time between the two cities to three hours.

South Africa has already missed many rail revolutions in its history, said Mr Montana, and the country cannot miss another one now. To ensure this does not happen,

projects to not only improve services but create new ones have been proposed.

Projects like the Moloto Rail Corridor and the Johannesburg-Queenstown-Mthatha Rail project, a project which has seen R450 million committed for the next three years.

This will fund the construction of eight new stations – providing part of the revitalisation of the industry that Mr Montana is keen to see.

Rail links to Cape Town International Airport and King Shaka International Airport have also been suggested, projects that will bring further investment and further job creation to the local areas.

As PRASA looks to upgrade old trains as well as build new ones, along with the other major investments in the industry, the future looks bright for rail services.

The only question now is whether or not the company will be able to drive the masses towards rail and justify the major spends that have been commissioned..

“The ageing fleet combined with rapidly growing passenger need has led PRASA to focus on scaling the rolling stock investment as part of a broader strategy to acquire modern technology to meet changing demands”

MAY 12 PAGE 7

STRAPLINE

Compressor & Engine Engineering (Pty) ltd (C&E)

is a compressed air specialist company. C&E was founded in 1989 with our head office located in Boksburg East Gauteng.

We pride ourselves on offering bespoke tailor made air solutions to large and medium sized organizations in South Africa in the private and government sectors.

We Specialize in… Refurbishment and Repair of Electric Locomotive Compressor & Vacuum Systems

Refurbishment of Espresso’s used in Diesel Locomotives

Sales of Compressors

Service & Maintenance of Compressors

Turnkey Solutions for the Compressed air Industry

Find us and Contacts6 Bain StreetBoksburg EastGauteng

PO Box 71Boksburg East1478

+27 11 914 1093

+27 11 914 1113

info@ceeng.co.za

www.ceeng.co.za Scan me with your Smartphone

(0)1603 618 000

info@industrysa.com

East Coast Promotions Ltd, Ferndale Business Centre, 1 Exeter Street.Norwich, NorfolkNR2 4QB

www.prasa.com