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Alstom Signs $5.1 Billion Order For South African Trains

Alstom SA said its joint-venture Gibela got an order worth 51 billion rand ($5.12 billion) to build 3,600 carriages for Passenger Rail Agency of South Africa in the decade through 2025.

Gibela, 61 percent owned by the Alstom, will provide technical support and spare parts for 18 years in addition to the contract, the French company based in Levallois-Perret near Paris said in a statement today.

“This project is one of the biggest in rail transport worldwide and is the largest contract ever signed in Alstom’s history,” Alstom said. Prasa and Gibela aims to reach the financial close at the end of 2013, it said.

South Africa is revamping its rail-passenger services to meet the needs of a growing population and replace trains that have been in use since the 1950s. The contract will be financed by the treasury, Prasa CEO Lucky Montana told reporters in Johannesburg today. The deal is a boon for Alstom, whose orders for the April-June period dropped 32 percent from a year earlier to 4.07 billion euros ($5.5 billion) because of falling demand for its thermal-power and rail equipment.

The Gibela consortium, 61 percent owned by Alstom and the rest by South African partners, was last year named preferred bidder for the Prasa contract. Alstom outbid six other companies, including Bombardier Inc. from Canada and China CNR Corp. Ltd.

Gibela will build a manufacturing site east of Johannesburg that will start operating in 2015, Alstom said. The first 20 trains, which can have 4 to 6 cars, will be made in Brazil, while French sites will also be involved in the project over the long term, Alstom said.

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