Murray & Roberts enters into a broad-based empowerment partnership which will pave the way for substantial new opportunities in the railway rolling stock industry.

Domestic and international demand for safe transport systems serving trade and commuter markets is growing. In South Africa, government has made a strong commitment to replace and refurbish its aging rolling stock asset by implementing a multi-billion Rand investment programme.

Murray & Roberts is ideally positioned to participate in the programme. An innovative and cost effective system of building coaches in modular form designed by Murray & Roberts subsidiary, UCW, has been successfully implemented in major refurbishment contracts undertaken recently for the SA Rail Commuter Corporation.

Now, UCW’s positioning has been further strengthened by a partnership with a consortium led by J & J Group, the diversified investment and management company of Jay Naidoo, former cabinet minister and trade union leader and Jayendra Naidoo, a former leader of Nedlac.

The consortium, which includes Lesaka, an empowerment services company, will own 30% of the Union Carriage Partnership. The remaining 70% will be held by UCW.

In terms of the partnership arrangement, UCW will continue to manage the property, plant and workforce of the business, while the Union Carriage Partnership will be responsible for design, engineering, procurement, marketing and administration. The partners will have representation on an executive committee that will manage the company.

The partnership will contract with existing and new customers and will have an exclusive supply contract with UCW.

This initiative creates a broad empowerment base for UCW: Lesaka is owned by trade unions and UCW employees will receive a share of the profits that accrue to the partnership, and the local community in Nigel, where UCW has operated for many years, will receive some benefit.

But the value of the partnership is not limited to enabling UCW to fulfil the empowerment requirements in government tenders. The combination of market demand, operational success, innovativeness and superb credentials is expected to pave the way for new business opportunities in the domestic market and in sub-Saharan Africa.

In recent weeks, Spoornet has awarded UCW a substantial new contract to build and refurbish locomotives for use mostly on two major freight lines, Coal Link and Oryx.

Last year, UCW was awarded a contract to upgrade 20 long-distance coaches for an Angolan company, Mestres & Servicos Lda, on behalf of the Angolan Railways. Second-hand units, purchased from Spoornet, were upgraded at UCW for this project.

These contracts represent important steps in the rolling stock refurbishment programme in South Africa and neighbouring countries and they are a signal of the many opportunities available to the new Union Carriage Partnership.