Transnet is weighing up pricing, timing and localisation imperatives, Engineering News reports, “as part of its intensive evaluation of a so-called ‘urgent’ tender process for the procurement of 100 diesel locomotives, while indicating that an award is now ‘imminent’. The tender, which was issued in November and closed on March 17, arose following the cancellation of an earlier request for 212 locomotives.

“The initial tender was issued in September 2006 and the preferred bidder named in 2007. But following the discovery of a conflict of interest involving Transnet Freight Rail (TFR) managers and the empowerment component of the preferred bidder, the Electro-Motive Sibanye Joint Venture, the tender was withdrawn.

“Acting CEO Chris Wells told Engineering News that the group would have liked to have finalised its selection already, but that it also wanted to be ‘ultra careful’ in ensuring that the process was beyond reproach. It was, therefore, taking legal advice every time a contentious issue was raised, which had lengthened the process.

“The problem is that, we are constantly getting tip-offs… and we are being so careful with this tender, having already been bitten once,” Wells explained, admitting that it was ‘a bit frustrating’.
Further, despite its urgency, the tender had also stipulated that bidders offer Transnet a choice between a ‘direct purchase’ of locomotives and an option that sought to maximise the ‘localisation’ element.

“Wells indicated that there would be a pricing benefit to the bid involving a higher local content. But an off-the-shelf-type purchase would accelerate the deployment of much-needed new motive power for the general freight business, which was still hamstrung by the age of its existing fleet. ’There is still an urgency for us to get new locomotives deployed, because it will improve our ability to deliver on our growth ambitions and to capture market share, particularly container business. But we also know that we want to get into a cycle where we are ordering, say 60 locomotives year in, year out, enabling us to place regular repeat orders with local facilities,’ Wells outlined.

“Given the slowdown in demand, and growing pressure on state-owned enterprises to increase the local content of their investment programmes, the group would, thus, probably lean towards the offer that placed a premium on local content. Through a ‘confined tender’, Transnet had invited three international original equipment manufacturers to bid to supply the locomotives, including: Electro-Motive Diesel, GE Transportation and Siemens. The immediate aim was to secure locomotives to improve the handling of 
magnetite, copper, vermiculite and rock phosphate, with delivery scheduled for the latter part of 2010.”

Related posts:

1. TRANSNET TENDER TO HIGH COURT
2. WHY TRANSNET DISCONTINUED THAT DIESEL ORDER
3. GE PREFERRED FOR SUPPLY OF 100 DIESELS
4. TRANSNET & THE CLAIMS
5. TRANSNET ON THE RIGHT TRACK
6. LOCO DELIVERY DELAYS
7. TRANSNET RESULTS
8. TRANSNET CONFIDENT ABOUT ITS CAPEX PLAN

Tags | Locomotive, Transnet, Transnet Freight Rail