Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI



Transnet signs deal for 96 diesel locomotives

Business Report

October 23, 2013

By Roy Cokayne

TRANSNET was to implement a locomotive fleet procurement “of unprecedented scale in South Africa’s history” worth about R35 billion for 1 064 locomotives in the next quarter, Public Enterprise Minister Malusi Gigaba said yesterday.

This new procurement programme was to meet and maintain the volume targets of Transnet’s market demand strategy in line with its R300bn seven-year investment plan.

It would be made up of 599 new dual-voltage electric locomotives and 465 new diesel locomotives and lay a platform for a seven-year strategic partnership between Transnet and its suppliers in the locomotive cluster, he said.

Gigaba was speaking at the official contract signing ceremony of Chinese manufacturer China South Rail (CSR) Zhuzhou Electric Locomotive as the successful bidder for a contract worth about R2.6bn for 95 electric locomotives for Transnet Freight Rail.

The winning bid was awarded to joint venture company CSR E-loco Supply in which CSR has a 70 percent stake and black economic empowerment (BEE) partner Matsete Basadi holds the remaining 30 percent.

Matsete Basadi comprises Matsete Industrial Services, owned by a group of qualified black professionals, and Matsete Dirang, a wholly-owned woman’s group, which both have a 10 percent shareholding in the joint venture. Five percent each is also held by the Matla Sechaba community trust and an employee scheme that still has to be established.

CSR president Xu Zongxiang said it had been working in the South African market for more than eight years and was familiar with local policies, especially BEE requirements.

Zongxiang said three potential partners had been recommended by its employees in South Africa and it had decided to partner with Matsete Basadi because of the consortium’s specialised commercial and industrial expertise and broad-based background.

Gigaba said the tender was historic because it marked the first time Transnet had procured locomotives to provide capacity for its key rail corridors from a Chinese original equipment manufacturer (OEM).

This reflected South Africa’s commitment to the Brics (Brazil, Russia, India, China and South Africa) strategic trade and investment relationships within this emerging economic community, Gigaba said. It also recognised the tremendous progress made in China to build globally competitive capabilities in sectors involving the manufacture of highly sophisticated capital equipment.

The tender awarded to CSR required the suppliers to meet a minimum threshold of 60 percent localisation, but he was unable to quantify how many jobs would be created.

Gigaba said the first 10 locomotives would be assembled in CSR’s factories in China and delivered by December next year, while the remainder would be made in South Africa.

“We believe this will inject massive economic benefits and lead to the development of intermediary sectors who will serve as suppliers because 50 percent of the capital budget will be spent on rail,” he said.

Delivery of the last batch of locomotives is planned for September 2014.

Gigaba said the scale of locomotive fleet procurement was expected to increase in the second phase of procurement in seven years time.

The capital expenditure programme put South Africa on the path of becoming one of a number of manufacturing centres competing on the basis of price and quality, he added.

“We are seeking to partner OEMs not just for the South African market but also for the purpose of exporting to the regional and global market.

“We would like to see our partners make South Africa the design and manufacturing hub for their regional activities, not just in the locomotive supply chain, but in all the spheres in which the OEM is active,” he said.

Does a Growing Africa Need a Foreign Investment Code?

Published: June 06, 2012 in Knowledge@Wharton Law & Public Policy

As managing director of Goldman SachsSouth African office, Colin Coleman has witnessed, and advised, the execution of countless business contracts across Africa. Each deal — from China’s US$9 billion copper deal with the Congo to Walmart’s US$2.4 billion purchase of South African retailer Massmart — highlights the tenuous balance between domestic interests and foreign investment, and raises a set of key questions.

“How do you create a balance of domestic interests in Africa and the interests of globalization?” Coleman asked. “How do you create a balance of interests between the emerging markets and the developed world? Within emerging markets, how does Africa protect its place in an appropriate way?”

These questions become more pressing as Africa’s economy grows and investors take notice. Africa today has 1.2 billion people, a US$1.8 trillion economy and real GDP growth of about 5.5% in 2011, Coleman pointed out. “When you look at the statistics, the fact is that Africa as a whole … is a significant contributor. It has a GDP that compares with any one of the BRICs.”

Such questions led Coleman to wonder: Should Africa create a code for foreign direct investment (FDI) that would guide non-African investors as they increasingly seek out opportunities in Africa’s growing markets? “Is there a case for an ‘FDI in Africa code of conduct’ that should be thought about, articulated, marketed, popularized, bought into and owned by investors, countries, and communities alike?” Read more.

New Research Gives Insight into the Procurement Practices of the Top 100 US Public Companies

The Sacramento Bee

By Trading Partners

October 27, 2011

CHICAGO, Oct. 27, 2011 — /PRNewswire/ — TradingPartners (, the leader in spend management and visibility technology and services, today released research showing the spend management and sustainable supply chain practices of Fortune 100 companies.  The study showed that while almost half of the top public companies cited spend management as a key strategic objective, only four have a Chief Procurement Officer.  The research results also illustrate that:

  • Only 20% of companies have board members with procurement or supply chain backgrounds.
  • The most successful companies have advanced sourcing tools.
  • Companies that include suppliers in their corporate, social and environmental responsibilities (CSER) programs, tend to have a higher net income margin than those who do not.
  • Despite CSER being a success factor for many companies, only seven Fortune 100s have a Chief Sustainability Officer.
  • 35% of CEOs see emerging markets as a key strategic objective, yet only 15% have executives from BRICS (Brazil, Russia, India, China, South Africa) countries on their senior management team.

The study “Procurement Practices: What Every Company Needs to Know About Spend Management Practices in Fortune 100 Companies” was officially released today in conjunction with TradingPartners’ first annual procurement forum in Chicago.  The event hosts C-level executives focusing on innovation in spend management and visibility, as well as sustainable supply chain best practices.

“Our objective with this research was to determine the best practices in both spend and sustainable supply chain management among the top companies in the country,” said Mark Barnekow, Chief Executive Officer of TradingPartners.  “We were astonished to discover that many companies are not taking full advantage of the tools they have, nor are they making serious commitments at the board or executive level to focus on managing spend.”

A slideshow summary of the study can be found at, while the full version of the research is available on request

About TradingPartners

Based in Chicago, with European headquarters in London, and operations in Africa, Asia and Latin and South America, TradingPartners provides growing companies and global Fortune 500 firms with the most comprehensive and effective spend management and visibility technologies and services.  With a global vertical focus in foodservice, healthcare, manufacturing, public sector, retail and services industries, TradingPartners assists its customers to reduce the cost of their direct and indirect purchases with tangible results often in the 10-25% range.  TradingPartners’ unparalleled domain expertise, comprehensive supplier database, and robust spend management technology platform have helped hundreds of corporations and public sector entities achieve dramatic business process improvements and tangible cost savings.  For more information, visit

TradingPartners and its respective logos are trademarks of TradingPartners Ltd.  All other trademarks are the property of their respective owners.

SOURCE TradingPartners.

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