By Devon Maylie
JOHANNESBURG--French power and transport engineering company
Alstom SA (ALO.FR) Wednesday secured a $5.8 billion contract to
refurbish South Africa's passenger rail company with a fleet of new
train cars.
On Wednesday, state-backed Passenger Rail Agency of South Africa
said the French company led a consortium to win the sought after
deal, one of the biggest government contracts awarded in
post-apartheid South Africa.
The contract, worth 51 billion rand ($5.8 billion), is for ten
years and includes replacing 3,600 train cars starting in 2015, a
spokesman for PRASA said. The company currently has roughly 4,600
coaches that ferry people across the country, many of which are
nearly four decades old.
South Africa, like many countries in Africa, is in the process
of revamping and expanding its infrastructure capacity. President
Jacob Zuma announced a plan earlier this year to spend $462 billion
over 15 years on infrastructure development, including rail.
The deal for passenger cars follows similar purchases by the
country's state-owned Transnet Ltd., which operates South Africa's
ports and freight railroads, to buy 143 locomotives from General
Electric Co. (GE).
South Africa's rail system, despite its ageing railstock, is one
of the best on the continent and is used to transport people and
move minerals such as coal to the ports.
"The current fleet has reached the end of its life and we need
to replace it," said Prasa Chief Executive Lucky Montana.
"Government realized for our cities to work in the future we need
more reliable trains."
Mr. Montana said the deal will create 33,000 new jobs over 10
years and is the first part in further plans to improve the
passenger rail network.
Alstom beat out other companies including Canada's Bombardier
Inc. (BBD.B.T), Spanish company Construcciones y Auxiliar de
Ferrocarriles SA (CAF.MC) and China CNR Corporation Ltd. to clinch
the deal.
Write to Devon Maylie at devon.maylie@dowjones.com