Transnet has secured a R12 billion club loan from five lenders to fund its locomotives fleet acquisition programme.

“The acquisition is the single biggest item of Transnet’s record breaking infrastructure programme – the Market Demand Strategy,” Transnet Group Chief Executive Siyabonga Gama said.

Speaking on Monday during a media briefing in Johannesburg, Gama said the participants in the club loan include Absa, Nedbank, Bank of China, Futuregrowth Asset Managers, as well as Old Mutual Specialised Finance.

Gama said Transnet has been able to secure the loan at competitive rates.

All funders agreed to a term of 15 years, including a grace period of four and half years, while the locomotives are under construction.

“I think what is important for South Africa is that we are at the cusp of creating an efficient and reliable railway service, which will assist South African companies to become competitive in the markets in which they operate,” Gama explained.

Strengthening the logistics in SA

He said it was important for Transnet to strengthen the logistics in the country so that South Africa can create a competitive supply chain.

“But most importantly, we must make sure we have an efficient and reliable railway service that we are able to move commodities from the road onto rail so that we can reduce the number of trucks on our main highways.

Transnet will be building 1 065 locomotives and 994 of those will be assembled in South Africa.

“On top of that, there is another 250 to 300 locomotives for our bulk services that have also been ordered, which will assist us to have replaced probably 1 350 locomotives over a space of 10 years.

“If you look at our current fleet of 2 400 locomotives, we will have about 1 500 … new locomotives… [This] also gives us the opportunity to maintain some of the older locomotives and also to retire some of the locomotives that we have, which are over 40 years and are quite expensive in terms of maintenance,” he said.