Rolling stock manufacturer and maintenance company Transnet Engineering on May 12 held an Industry Day at its Pretoria facility, as part of its aim to be transparent, during which the division, and its parent company Transnet, called for collaboration with the private sector, stating that they are “open for business”.

Transnet Engineering is being overhauled with the aim of turning it into a world-class engineering entity, leveraging on several prioritised opportunities arising from the country’s rail reform and open access.

This includes the entity capitalising on increased demand for manufactured rolling stock and refurbishment of existing locomotives and wagons, among other equipment, to support the modernisation and capacity expansion of the rail network.

Rolling stock will need to increase to transport the targeted increase of freight on rail. Transnet Freight Rail and third-party train operating companies (TOCs) will require new or refurbished rolling stock as freight rail volumes increase in future.

Moreover, a new revenue stream will arise from the introduction of TOCs requiring regular and specialised rolling stock maintenance, repair services and train preparation support.

Increased infrastructure development also provides opportunities for Transnet Engineering to bolster work it is already undertaking in supplying components to rail and port infrastructure and in supporting engineering development.

The division will look to serve a diverse customer base, supported by partnerships that are expected to enhance its rail industry market position and brand reputation.

It was noted that Transnet and its divisions required the help of the country and all stakeholders, including the private sector, with the State-owned entity having declined since 2017. A recovery plan was instituted in 2023, to begin arresting this five-year decline.

During a panel discussion, it was noted that Transnet Engineering’s foundry business was struggling and required funding, with this presenting an opportunity for stakeholders.

Transnet Engineering’s Koedoespoort facility, in Pretoria, has the capability to work with different types of locomotives and re-manufacturer and re-engineer these. Transnet Engineering is working with other original-equipment manufacturers on possible collaborations.

The division is also exploring the potential for work in maritime services, with this not being tapped into before, as part of its efforts to diversify, and with the capability to use similar machines to manufacture for this industry.

Moreover, it was emphasised that Transnet viewed the country’s rail sector being opened up to private-sector participation as an opportunity, rather than a threat.

Of particular focus during the discussions was a new leasing company, LeaseCo, that was being pursued, with this being one of seven Transnet diversification initiatives.

The entity is pursuing setting up this company, partnering with the private sector, to provide a new model for rolling stock access, with railways struggling in this regard.

Thus far, Transnet has completed a bankable feasibility study for LeaseCo, which was said to have shown strong regional rolling stock demand, and that this leasing model was feasible.

It has issued a request for qualification (RFQ), which kickstarts the process of selecting a partner.

Transnet will provide wagons and locomotives, as well as its expertise and capabilities, to this partnership.

The private-sector partner is expected to inject considerable capital to re-manufacture and refurbish assets, expand the growth of rolling stock release leasing and enable market access.

The RFQ closes on July 4, and interested parties have been encouraged to participate. It will be followed by the issue of a request for proposals.

It is estimated that the LeaseCo will take about 18 months to reach financial close.