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Transnet seeks court order compelling CRRC to release spares for 120 idle locomotives

A Transnet Freight rail locomotive

A Transnet Freight rail locomotive

Photo by Creamer Media

17th August 2022

By: Terence Creamer

Creamer Media Editor

     

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State-owned freight logistics group Transnet has launched a High Court application through which it is seeking an order compelling China Railway Rolling Stock Corporation (CRRC) E-Loco Supply to release spare parts and components required to return 120 locomotives to service.

Transnet said in a statement that the spare parts and components had been imported to service and maintain the 95 20E and 100 21E locomotives acquired from CRRC in 2012 and 2014 respectively.

“The application provides for an urgent hearing to secure the immediate release of the spares to Transnet for use in the locomotives, and for the amount due by Transnet to CRRC for such spares, if anything, to be determined in due course,” Transnet said in a statement.

Access to the spare parts and components, the utility added, would allow it to bring back to service 53 Class 20E and 67 Class 21E locomotives, which have been standing idle as a result of the inability to access the required spares and components.

“In addition, it will contribute to timely maintenance of these two fleet classes,” the statement adds.

The standoff with CRRC arose following Transnet’s 2019 decision to halt the so-called 10-64 contract, for 465 diesel and 599 electric locomotives, in which CRRC participated along with three other original equipment manufacturers (OEMs).

Transnet deemed the contracts, which featured during proceedings undertaken as part of the State Capture commission, to be “irregular and illegal”.

The cancellation of the contracts has left Transnet Freight Rail (TFR) with a locomotive shortfall, which Transnet aims to address through the issuance of a new tender, possibly later this month.

It has been amplified, however, by CRRC’s refusal to provide Transnet with the spares required to maintain those locomotives already supplied to the utility.

In July, Transnet CEO Portia Derby said that the impasse was partly responsible for as many as 300 locomotives having been “parked” and also indicated that an alternative OEM support strategy would be pursued for the existing fleet if the current deadlock with CRRC was not resolved.

Several TFR customers have expressed dismay at the poor performance of the rail business over the past few years, owing to a shortage of locomotives and ongoing theft across the rail network, with TFR having lost a total of 1 500 km of overhead copper wire to theft in 2021/22 alone.

Coal exporters have identified the poor performance of the rail service as a key reason for them having failed, thus far, to take full advantage of the super cycle conditions that have arisen for the energy mineral as a result of Russia’s invasion of Ukraine.

Steel group ArcelorMittal South Africa, meanwhile, reported that it was forced to close a blast furnace at Vanderbijlpark earlier this year, because intermittent rail deliveries had left it short of iron-ore.

The  group has resorted to receiving material by road, even though the logistics systems at its mills are specifically designed to receive bulk material by rail.

Several large rail users have indicated that they will consider partnering with private rail providers should Transnet extend the sale of slots to third parties beyond the 18 general freight corridors identified for the initial phase of such sales.

Derby indicated previously that TFR was committed to making slot sales a permanent feature of the rail business.

Edited by Creamer Media Reporter

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