Transnet, China Development Bank sign pact

By Drum Digital
26 March 2013

South Africa's freight rail company Transnet and China Development Bank have signed a agreement on financing upgrades at rail and port networks, Transnet said on Tuesday.

It said the pact would ensure co-operation on localisation of equipment manufacturing.

It also provided for collaboration on research and development initiatives, manufacturing and marketing, and the construction of cross-border infrastructure throughout the continent.

The agreement was endorsed at the Union Buildings in Pretoria, ahead of the Brics summit in Durban.

Transnet group chief executive Brian Molefe said: "This historic agreement between two state-owned entities within Brics illustrates the opportunities inherent is such diplomatic ties.

"The agreement will enable us to explore innovative funding options as we pursue our borrowing plan, focusing on cost-effective solutions and diversity."

The agreement is one of the various country-to-country collaboration agreements intended to strengthen economic and trade relations among the Brics countries -- Brazil, Russia, India, China and South Africa.

South African President Jacob Zuma, his Chinese counterpart, president Xi Jinping and Minister of Public Enterprises Malusi Gigaba also witnessed the signing of the agreement.

Last year, Transnet announced a R300 billion investment programme, the Market Demand Strategy, to revamp and expand its ports, rail and pipelines infrastructure and equipment.

About two-thirds of the required funding will be raised from internal resources, while the remainder will be raised through various sources in the debt capital markets.

As part of the investment programme, Transnet has awarded various equipment manufacturing contracts to companies which include the United States' General Electric, Finnish crane maker Kalmar and China South Railways.

-by Sapa

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