South African Economy and Rail System Investments

economy of the south african republic and rail system investments
economy of the south african republic and rail system investments

The Republic of South Africa, which has a free market economy, is a developing market. The integration of the Republic of South Africa into the world economy took place in 1994 with the transition to democracy.

Area 1.219.090 km2,  With a population of approximately 57,7 million, South Africa has developed a lot of trade relations with other African countries over the last 10 years. Most of the export products of the Republic of South Africa consist of manufacturing industry products. Major industries include mining (the world's largest producer of platinum, gold and chromium), assembly of motor vehicles, machinery-equipment, steel and non-ferrous metals, textiles, ship maintenance and repair, chemicals, fertilizer and processed food. Exports of mineral ores constitute 12% of total exports. China imports half of its ore exports. Agricultural products, on the other hand, are at a level to be expressed only in small percentages.

The Republic of South Africa, which has Africa's second largest economy (GDP) after Nigeria, stands out in terms of the development of banking infrastructure, ICT, transportation and logistics networks; The development of legal infrastructure and the protection provided to investors within the framework of national legislation emerge as an important guarantee element.

Although the Republic of South Africa has emerged as the most important target country in Sub-Saharan Africa for its products, it has some difficulties due to market entry, the competitive advantage of Asian and European Union countries in entering the market, the already developed industrial infrastructure and the established relations in the market. Turkey's imports, while exports of South African Republic 534 1.382 million USD billion USD. So bilateral trade with the Republic of South Africa, Turkey gives clear disadvantage.

gac'n beginning of the gold products exported to Turkey, centrifuges, coal, motor vehicles, iron, chromium and so on. mineral ores, aluminum, iron and steel products, fish meal / feed.

gac'n parts of the motor vehicle and the beginning of the products imported from Turkey, mineral fuels and oils, rubber (tires), carpets, confectionery, copper wires comes machines and parts thereof.

The state of the country's economy;

GDP (Nominal) (2018 IMF): 368 billion USD
GDP Per Capita (2018 IMF): 6.380 USD (Nominal); 13.680 USD (SGAP)
GDP Growth Rate (Real-IMF): % 0,8 (2017:% 1,4; 2016:% 0,4)
GDP growth rate: %0,8
GDP per capita: 6.380 USD
Inflation Rate (April 2019): %4,4
Unemployment Rate (2019 1. Quarter): %27,1
Total Exports: 94,4 billion USD
Total imports: 93,4 billion USD
Inbound Investment (UNCTAD-2018): 5,3 billion USD current; 129 stock $
Outgoing Investment (UNCTAD-2018): 4,6 billion USD flow; $ 238 billion in stock

Due Diligence and Opportunities; It is the most developed country in Sub-Saharan Africa. Natural resource economy. Economic performance is poor. To increase employment, investment is mandatory. Regional free trade agreements (SACU-SADC) and AGOA create significant opportunities for investors. The African Continental Free Trade Area (ACFTA) is seen as an important opportunity. Black Economic Empowerment. Foreign capital incentives. The target market of our country is among the countries. There are export opportunities in many sectors such as automotive and auto spare parts, construction materials, home textiles, garments, iron and steel, electrical household appliances, food, chemicals and pharmaceutical products.

Turkish Companies-Investments in the Republic of South Africa;

  • Arcelik DEFY: Our biggest investor in the region is Arçelik, which owns South Africa's white goods company DEFY. The Arçelik Group acquired DEFY, a brand over 100 years old, in 2011. It carried out a major innovation and transferred its know-how technology to factories in South Africa. It currently holds more than 40 percent of the Sub-Saharan white goods market. The DEFY brand expanded its investments here last week and announced an additional investment of Rand 5 billion over the next 1 years. It is very important for the South African Government. The DEFY factory in Durban, where Trade and Industry Minister Rob Davies attended the opening, was enlarged. Thus, Arçelik started producing washing machines here for the first time. Arçelik also employs more than 3 thousand people in South Africa.
  • TK: THY is an important company worldwide. But in South Africa it stands out especially; Flies to all three major capitals. In the coming period, the frequency of flights will be increased.
  • CISCO: 7 is an iron and steel mill in Cape Town, which was acquired by DHT Holding, a Turkish company, for $ 42 million years ago; Cape Town Iron and Steel Company (CISCO).
  • LC Waikiki: We have an important retail company that entered the market last year; LC Waikiki. LC Waikiki is our pride brand with more than 350 stores in the global retail sector. They quickly opened up to Africa. They exist in Kenya. They exist in many African countries. Last year they entered South Africa. They are located in the largest shopping centers in the largest cities of South Africa in the widest area of ​​stores.

Railway Transportation in the Republic of South Africa;

Rail transport is very important in South Africa. All major cities are connected to each other by a network of railways and Africa is the country with the most advanced rail system. Railway transport belongs to the public. Almost all railways in South Africa use 1,067 mm rail clearance. This system is 19. century, was selected to reduce the cost of construction in the mountainous regions of various parts of the country. Operating on the Johannesburg-Pretoria and Johannesburg-OR Tambo Airport lines, the Gautrain suburban system uses 1.435 mm (standard size). 50 to 80% of the railway lines in South Africa are electrified. Different line voltages are used for different train types. Most electric trains use 3000 V DC (overhead line); This is usually used for commuter lines. Higher voltages (1980 kV AC and 25kV AC) are used in 50s, especially in heavy load lines used for the transport of iron ore.

Enhanced rail network: The freight line corresponds to 80% of the whole African continent; however, railway infrastructure needs to be developed and modernized. Developing and maintaining a competitive and efficient transport system is one of the main objectives of the National Development Plan.

Strategic Targets in Transportation

- Provision of an efficient and integrated transport network that will serve social and economic development

-Improving the transport infrastructure and access to transport services

- Strengthening of bulk transport systems

- Increasing the contribution of the transport sector to employment.

Ministry of Transport 2019 budget;

Management of railway transport: 16,5 Billion Rand (1.2 Billion USD)
Railway infrastructure and industry development: 10,1 billion Rand (721 million USD)
Railway operations: 10,8 billion Rand (771 million USD)

Railway Passenger Transport Authority (PRASA):

The South African Passenger Transport Authority (PRASA) is a South African government agency responsible for most railway passenger services in the country. It consists of four working areas;

  • Metrorail, providing suburban rail services in urban areas,
  • Regional and intercity train services, Shosholoza Meyl,
  • Autopax provides regional and intercity transportation services and
  • Intersite is responsible for the management of PRASA.

PRASA (Railway Passenger Transport Authority) is responsible for the renewal and modernization of trains in the medium term, the purchase of new railway vehicles, and the modernization of the railway signaling system and warehouses and stations.


Transnet company has an important place in freight transportation in the country. The company also has port management, pipeline operation and engineering (railway vehicle maintenance and repair) units.


It is the largest unit of Transnet. 38 has over one thousand employees. On the African continent, 17 operates in the country. This unit carries out the export transportation of the country especially based on raw materials completely or to a great extent. Responsible for the management of the entire railway line in the country, including passenger transport. It is the largest railway operating company after operators in the United States and India.


It constitutes the advanced manufacturing industry leg of Transnet. R&D and engineering; production; It has activities in the Republic of South Africa, African continent and global scale in remanufacturing and maintenance-repair services. Transnet provides engineering support to Freight Rail and PRASA for the maintenance and repair of railway infrastructure and vehicles. It operates in the production of freight and passenger wagons, locomotives and their maintenance and repair services.


Founded in 2013, the Gibela railway and railway vehicle manufacturing center has a key role in strengthening and renewing existing vehicle capacity. Gibela is an Alstom-South Africa partner railway vehicle manufacturer. Alstom owns a majority stake in 61. African companies Ubumbano Rail and New Africa Rail hold% 30 and% 9 shares, respectively. Factory 60.000 m2 and about 1.500 people are employed. The factory is capable of producing the annual 62 electric set (EMC) passenger train. In 2013, the company has signed a contract with PRASA for the 10 vehicle, namely 51 EMU set worth 3.65 billion Rand (600 billion USD) covering 3.600 year. The contract includes a minimum 65 domestic production requirement, which includes the supply of spare parts and technical support after delivery. In 2014, the first 20 EMU X'Trapolis Mega train was produced by Alstom in Brazil. The foundation of the factory was laid in South Africa in 2016 and production started in 2017. All the remaining vehicles will be produced at these facilities until 2028.

Important Works During Rail 2019 Fairs and Events in South Africa;

- Kent Card Our company 500 has received passenger information, electronic toll collection, mobile application, automated vehicle management business for vehicles and opened offices in South Africa.

- We opened the Aselsan G. Africa office.

- Private copper negotiated to increase annual 3000 Ton copper sales to South Africa in railway signaling and infrastructure tenders.

- BM Makina opened an office in South Africa for sales contacts.

- Das Lager Bearing held talks for sales office.

- Raysimaş, ​​Kardemir, RC Industry, Emreray, Berdan Civata and Ulusoy Rail Systems Transnet and Gibela companies have made important negotiations on sales and investment.

Issues to be Considered in Entry to Railway Market;

The transportation system is run by the public. In this context, the procurement of related institutions and organizations are subject to the criteria and conditions for public procurement.

The BB-BEE program, which aims to strengthen the participation of blacks in the economy, has a great impact on this issue.

Localization conditions:

- Minimum% 65 in railway vehicles *

- Generally minimum 65 * in railway signaling; 40% in parts-% 100

-% 90 * in railway infrastructure (% 70 * for maintenance of railway and equipment;% 100 * in other parts and operations)

* supply of domestic inputs Minimum thresholds required to be subject to the preferential system in public procurement as described by the Ministry of Trade and Industry. (Dr. Contact Ilhami directly)

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