South Africa agreed upon a $5.8 billion deal Wednesday with French company Alstom SA to completely refurbish the nation's passenger trains, part of a 20-year plan to overhaul the rail system of Africa's biggest economy.
The Passenger Rail Agency of South Africa accepted Alstom's bid over other companies including Bombardier Inc., Switzerland's Stadler Rail AG, a Spanish firm and Chinese companies. The deal includes Alstom, partnered with a local company, building some 3,600 passenger coaches for the rail agency.
Officials with Alstom in Paris could not be immediately reached for comment Wednesday.
Currently, the rail agency has some 4,600 coaches operating across the country — with much of it more than three decades old. The deal represents one of the biggest agreements made by the South African government since the end of apartheid in 1994 and seeks to improve rail to improve passenger movement across a nation where many of the poor cannot afford care transport.
The railway agency predicts some 8,000 jobs will be created locally by the deal. The agency hopes to build another 3,600 coaches as part of a second-phase of the project 10 years from now.
South Africa's Transport Minister Dikobe Ben Martins applauded the deal Wednesday, saying it would help modernize and improve the safety of the country's railroads.
"This process is much more than a train purchase, we are reviving our rail engineering sector, contributing to skills development and job creation amongst other bigger objectives," Martins said in a statement. "A long journey still lies ahead of us, we will walk with our fellow citizens and keep them informed."
While other African nations have allowed their colonial-era railroads to fall into disrepair, South Africa still has a strong industrial and passenger rail network that runs into neighboring countries. South Africa saw some of the first railroads built in sub-Saharan Africa in the 1860s, as miners exported the nation's diamonds and minerals abroad.
In recent years, Nigeria has started a process to revamp its railroads, pouring billions of dollars into the efforts. Chinese companies, as well as other foreign mining companies, have paid for improvements in other countries to help speed their exports.
Alstom SA: www.alstom.com
Passenger Rail Agency of South Africa: www.prasa.com
Jon Gambrell can be reached at www.twitter.com/jongambrellAP.