MNP2601 MCQ Memo Bundle
2021/ALL
Questions 1 to 10 are based on the case study below.
No stopping this train!
Background: Replacing outdated trains in South Africa
Trains are at the core of the modernisation program of the Passenger Rail Agency of
South Africa (PRASA) to deliver improved passenger services to the country’s
commuters. In one of South Africa’s largest-ever infrastructure projects, Gibela Rail
Transport Consortium contracted with PRASA for a train upgrade replacement
programme serving as a catalyst for transformation in South Africa, which includes
stringent economic development commitments. Gibela is a South African joint venture
(JV) which brings together Alstom (a French train manufacturer) and local empowered
businesses. Training and development are fundamental to Gibela’s commitments as
they work to build and enhance rail technology skills amongst employees, suppliers
and students.
Following Gibela’s tracks
The road to delivering the first train at the end of 2018 required focused planning,
negotiation and commitment, as can be seen in the following milestone events.
2013-2014
Milestone 1: Gibela’s vision to develop local supply chains
In October 2013, Gibela was awarded a contract by PRASA to manufacture and
replace South Africa's outdated trains and deliver 600 new passenger trains into the
South African rail network within 10 years. This project also involved the construction
of a manufacturing facility in South Africa. In 2014, Gibela preselected nearly 100 local
,companies as possible component and service suppliers to show their commitment to
fulfilling local content requirements during the servicing of the R51-billion rolling stock*
contract. The company targeted 70% local content in its components and services to
revitalise the South African economy and develop local supply chains. At that stage,
before negotiations even took place, eleven letters of intent for the provision of steel,
cables, lights, interiors, connectors, and insulation had been signed, while four
contracts with local suppliers had already been in place. In some cases, Gibela even
began the processes necessary to raise the potential suppliers’ product specifications
to international standards.
2016
Milestone 2: Gibela’s progress towards meeting the local content target
By 2016, Gibela had already initiated the construction of a state-of-the-art local factory
where 580 of the 600 trains were to be built by trained and skilled South Africans using
South African inputs. At that stage, the factory was scheduled to deliver its first train
by the end of 2018 and, thereafter, to deliver five completed trains each month for 10
years to PRASA. Prior to 2016, 20 of the 600 trains had been built at Alstom’s Brazilian
plant. All components for the first 20 trains had been made in South Africa, using South
African materials, and had been shipped to Brazil. During a site visit in June 2016, the
first 32 South African suppliers to provide local content for the new passenger trains
being built by Gibela were welcomed to PRASA’s Wolmerton depot to view the
manufacturing of the first five X’Trapolis Mega** trains to be completed. This visit
provided the local component and service suppliers with an opportunity to see, first-
hand, how their products would be contributing to the creation of fully operational
trains. Welcoming the suppliers, Gibela’s CEO Marc Granger said that, in just two
years, Gibela’s journey in delivering the next generation of trains to South Africa’s rail-
commuter public had gained momentum on all fronts and in particular, in the sourcing
and supply of local equipment and components of a standard that was meeting
Gibela’s high quality and other standard demands. In Granger’s address to the
suppliers he added: “By producing quality components such as these, local suppliers
will, in addition to being able to service Gibela and the South African rail sector as a
whole, be able to compete in global markets, opening up the real potential for
significant exports and resultant foreign exchange earnings for South Africa. We are
,starting to make substantial progress in rejuvenating our local rail manufacturing
industry’s capabilities and capacity.” While making it clear that his list was not
exclusive, Granger flagged a broad range of South African made components visible
inside and outside each train, and other equally important components not visible to
passengers, such as batteries, heating and braking systems. Although there had been
no contractual obligations for local content on the 20 Brazilian-built trains, Gibela took
a strategic decision to get a head-start to ensure that local suppliers are well prepared
(in terms of technical capability, capacity and investment) for an intensive
manufacturing programme adhering to stringent standards of quality and tight delivery
schedules. For each train that had already been built in Brazil, 22% of procurement
spend was on components sourced from South African suppliers of which a large
percentage was on interiors, energy and sheet metal work domains.
Contributing to the success of the South African suppliers had been the technical
advice and assistance provided to them by Gibela itself as part of efforts to develop a
robust and sustainable South African supplier base. The following examples of
Siyahamba Engineering and LED Lighting SA proved their success in this regard.
Siyahamba Engineering had been responsible for the supply of cabin doors and
partition walls for the new trains. CEO Julius Motshopi said: “Gibela brought in a
specialist from the UK to work with us to help us industrialise and organise ourselves.
We have gone through a steep learning curve and developed a good working
relationship in the process.” LED Lighting SA, a Cape Town-based medium-sized
company, supplied Gibela with one of the world’s first set of exterior LED lights to
comply with international rail standards. CEO Andrew Glenday commented: “There’s
much more of a buzz in South Africa around the rail transportation and I believe that
well-structured investment in our local rail business will be repaid many times over
through export, employment, skills development and even intangibly in national pride.
I am proud of the offices and factory we have set up. They are as well established as
any factory in the United States or Europe; we’re making world-class products and we
are gearing up to export.”
2017 -2019
Milestone 3: Gibela delivers the first South African-made trains to PRASA
, By May 2017, the construction of Gibela’s manufacturing facility in Dunnottar was well
underway and was due to be completed by the end of 2017. The on-site Training
Centre had already been completed and admitted its first intake of students in April
2017. At peak production, Gibela was confident that they would produce 62 trains
annually. At that stage, Gibela reported that a supplier base, consisting of a panel of
200 local suppliers would be manufacturing equipment and components for the 580
locally-produced trains (X’Trapolis Mega commuter trains) from 2018 onwards. Local
suppliers would be able to compete in global markets, opening the real potential for
significant exports and foreign exchange earnings for South Africa.
In December 2018, the first train was dispatched from Gibela’s new train
manufacturing complex at Dunnottar, in Ekurhuleni, travelling to PRASA’s Wolmerton
depot, north of Pretoria. The train took 14 months to complete, with production having
started in September 2017. It was a celebratory moment for Gibela to report that the
first train has been built, while also completing construction of one of the largest
manufacturing plants in the world.
As soon as November 2018, the second state-of-the art X’trapolis Mega commuter
train was also nearing completion, with a minimum of six trains scheduled to be
delivered to PRASA by the end of the first quarter of 2019. The R1-billion plant was
described as the only one in Africa containing R350-million worth of specialised
equipment. The equipment included seven axiswelding robots, the first of their kind in
the railway industry globally. Gibela was proud to announce that thousands of people,
mostly South Africans, had been involved in the scores of activities related to the
construction, sourcing, skills development, and manufacturing to get to this point.
In April 2019, PRASA unveiled the next two Gibela-built X’Trapolis Mega trains in
Cape Town, South Africa.
Going forward: A win-win relationship
Alstom Southern Africa is pleased to be participating in the South African railway
transport revitalisation project. The success of the joint project with Gibela positioned
them as a reliable partner, established for the long-term in South Africa. Gibela is
consistently receiving recognition through various industry bodies, such as the South
African Government’s Transport Education and Training Authority for excellence in
Skills Development and Training.
