Downer scores BHP loco deal
Downer EDI has scored a potential $400m contract with BHP Billiton for the supply of locomotives in the Pilbara which the company says marks a step in the right direction in building on its plans for more customers in Western Australia.
The rolling stock contract is for the supply of Downer Electro-Motive Diesel (EMD) Model SD70ACe/LCi locomotives to BHP Billiton Iron Ore in the Pilbara for the next five years
The contract has a core value of $292m with options offered that could bring the total value to over $400m.
The first new locomotives are expected to be delivered in the second quarter of 2012.
Downer chief executive Grant Fenn said the ability of the company and its US partner, Electro-Motive Diesel to provide support at the front line has been “second to none” and underpins this deal.
Fenn said the contract marks Downer’s plans to build a greater presence in Western Australian.
“Integral with this contact is the further build up of Downer support for customers in Western Australia,” he said.
The SD70ACe/LCi locomotive and its key components and systems are designed and built by EMD, a member of the Caterpillar family of companies. Downer and EMD have worked together for more than 60 years supplying and maintaining locomotives in Australia.
The contract follows the award to Downer, in partnership with Progress Rail USA (a wholly-owned subsidiary of Caterpillar), of a rolling stock supply contract to design, build and deliver 17 new PR22L locomotives to TasRail, Tasmania’s State owned rail company.
The contract was awarded in December 2011 and the first new locomotives are expected to be delivered in mid-2013. The total value of the project is over $60m.
“This fleet of locomotives will bring significant performance benefits to TasRail including fuel consumption improvements, exhaust emission benefits and reliability improvements,” Fenn said.
The PR22L locomotive and its key components and systems are designed and built by Progress Rail USA and EMD.
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