Alstom: A contract worth 51bln Rand1 in South Africa

Regulatory News:

PRASA (Passenger Rail Agency of South Africa) signed today a contract with Gibela² - a joint venture led by Alstom (Paris:ALO) to supply 600 passenger trains (3 600 coaches) to be delivered between 2015 and 2025. The contract is worth R51 billion and includes the construction of a local manufacturing facility. In addition to this contract, Gibela will provide technical support and supply of spare parts over an 18-year period. This project is one of the biggest in rail transport worldwide and is the largest contract ever signed in Alstom’s history. The contract was signed by PRASA Group CEO, Lucky Montana, Alstom Chairman and CEO Patrick Kron, and Henri Poupart-Lafarge, President of Alstom Transport.

The contract is part of PRASA’s aim to revitalise the rail industry, create jobs and provide efficient, reliable and safe public transport. This ambitious programme was launched by the South African government in 2010 to respond to the growing number of commuters in the country. The programme will replace the ageing suburban trains in service in Pretoria, Johannesburg, Cape Town and Durban, with 1 200 electric trains over a period of 20 years.

PRASA and Gibela will now proceed with the process of reaching financial close at the end of December 2013.

Speaking on the occasion of the signature, Lucky Montana said, "The PRASA fleet renewal programme is the catalyst for the transformation of Metrorail³ services and public transport in South Africa as a whole. It is the beginning of the roll-out of government’s comprehensive rail programme. While the urgent challenge to improve passenger services remains primary, the rolling stock programme has been designed to achieve government’s objectives of developing skills, creating jobs and delivering quality services to citizens.”

"Alstom is proud to have been selected by PRASA for a project of this magnitude. We are fully committed to mobilising the best of our technology and expertise through our South African joint venture Gibela and we believe our trains will set a high standard in serving the interests of commuters,” Henri Poupart-Lafarge said.

PRASA will be supplied with X’Trapolis Mega, the new X’Trapolis train developed by Alstom to fit the 1.067 metre gauge in South Africa. The train can travel at speeds of up to 120 km/h with the ability to be upgraded to 160 km/h. Each single-deck train is composed of six cars and is able to carry more than 1300 passengers. Thanks to the modularity of X’Trapolis, PRASA will be able to adjust the configuration of the train depending on the number of commuters (from 4 to 6 cars with the option of having the set coupled). The train is equipped with air conditioning, ergonomic seats, real-time on-board information, Wi-Fi internet access and a combination of direct and indirect lighting to increase the feeling of space. Additionally, it includes an enhanced door system to provide better accessibility for passengers with reduced mobility and full-length connecting gangways for improved fluidity. With a 95% recyclability rate, the X’Trapolis sets a high standard in environmental sustainability. Additionally, the stainless steel car body-shell reduces the weight of the train and its electrical braking capacity enables a significant reduction in energy consumption.

PRASA, through the rolling stock programme, is in the process to procure approximately 7224 new rolling stock with a projected investment of 123 Billion Rand over a period of 20 years. The procurement of the rolling stock is being done in two phases, with the first phase of the programme being launched today. Gibela is contracted for the first 10 years.

Gibela will build a manufacturing site in Ekurhuleni, east of Johannesburg, to produce the trains in South Africa. The manufacturing facility will also house an engineering center and a training facility. Construction is scheduled to start in early 2014 and the factory is due to come on-stream in 2015. The project will create over 1500 direct jobs in the local factory and 33,000 indirect jobs over the first 10 years, achieving a local-content level of over 65%. The first 20 trains will be manufactured in Lapa, Brazil. Alstom’s French sites Ornans, Tarbes, Villeurbanne and Saint-Ouen will be involved in the project over the long term.

About PRASA

PRASA was formally established in December 2008, when the President signed the Legal Succession Act into law. This completed the consolidation of the various entities (Metrorail, Autopax, Shosholoza Meyl and Intersite) into PRASA from what were the South African Rail Commuter Corporation and Transnet. PRASA has 17 000 employees, 76% of which are employed by Metrorail.

Website: www.prasa.com

About Alstom

Alstom is a global leader in the world of power generation, power transmission and rail infrastructure and sets the benchmark for innovative and environmentally friendly technologies. Alstom builds the fastest train and the highest capacity automated metro in the world, provides turnkey integrated power plant solutions and associated services for a wide variety of energy sources, including hydro, nuclear, gas, coal and wind, and it offers a wide range of solutions for power transmission, with a focus on smart grids. The Group employs 93,000 people in around 100 countries. It had sales of over €20 billion and booked close to €24 billion in orders in 2012/13.

Website: www.alstom.com

¹ As of October 11, 2013, 51bln Rand is around €4 billion.

² 61% Alstom; 9% for New Africa Rail and 30% for Ubumbano Rail which is the hosting entity in the National Empowerment Fund (NEF) for the BBBEE (Broad Based Black Economic Empowerment) partners, the Gibela and PRASA Employees Trust and the Educational Trust.

³ Metrorail is a division of PRASA which operates all the passenger trains in South Africa.