JSE-listed Grindrod’s rail division on Tuesday vowed to make rail operations more cost-effective in Africa, as Grindrod Locomotives unveiled its new, cost-effective fit-for-purpose shunting and short-haul locomotive.

The new GS7, launched at Rovos Rail in Pretoria, boasted 80% local content and would cut 30% to 40% of the fuel bill and up to 50% of the maintenance cost required to operate it.

The rail engineering solutions provider aimed to use the new addition to bolster efforts to become a leader in the underdeveloped rail market in Africa by making operating short-haul trips more cost effective.

Grindrod rail divisional CE James Holley explained that cost-effectiveness was imperative in Africa on the back of tough markets, tight margins and global competition.

Between 70% and 80% of rail costs were fixed.

Further, rail volumes in Africa were significantly lower than other emerging markets, he added, citing Brazil’s volumes of 500-million tons a year and China’s volumes, which were upwards of four-billion tons a year.

Africa’s North to South Corridor hauled less than one-million tons a year.

“It is either grow volumes or lower costs [of rail operations],” he said, noting that Grindrod aimed to lower the costs.

With this in mind, Grindrod had, three years ago, conceived GS7 – an emissions-compliant shunting, or short-haul, locomotive that would incorporate local manufacture at half the cost of European counterparts, with a lower running cost, using the latest technology, explained Grindrod Locomotives CEO Robert Spoon.

The maintenance cost of the GS7, which held 30% better continuous adhesion and an emissions tier-3 engine, was half that of the mainline locomotives.

This was attributed to commercially available service parts for engine and other auxillary systems, digital protection of equipment to eliminate expensive failures and up to 18 000 hours engine life without any serious overhaul requirements.

Two GS7 locomotives were effectively cheaper to operate than one 300 HP mainline locomotive, the company pointed out.

Currently, there were about 300 mainline locomotives operating in South Africa.

The new locomotive was expected to become one of the keystones of Grindrod’s ambitions of becoming the largest rail engineering solutions group within Africa’s rail market, particularly as the company had expanded its capacity at its Pretoria-based manufacturing plant.

Grindrod group CEO Alan Olivier added that the “historic underinvestment” in rail, the proliferation of large mining projects and general economic growth provided a favourable environment for growth in the rail sector in Africa.

Spoon explained that Grindrod Locomotives had recently expanded its manufacturing plant to 30 000 m2, with a capacity allowing for up to 100 locomotives of any configuration to be manufactured in a year.

The Department of Trade and Industry had awarded Grindrod an R11-million grant earlier this year to upgrade its production facilities, enhance its component localisation initiative and train and develop its staff.

Grindrod committed R30-million to the project that was now 50% completed.

Grindrod’s rail offering now encompasses the manufacturing of locomotives, maintenance, funding and the leasing of locomotives, mainline operations, track construction, cargo management solutions, as well as signalling, communications and rail technologies across the African continent.