UPDATE 2-France's Alstom wins $5.8 bln South African train deal

Wed Dec 5, 2012 10:07am EST

* To build 3,600 new train cars over ten years

* Beats Chinese, Canadian, Spanish firms

* Contract seen creating around 33,000 jobs

* Shares rise 2.8 pct

By Tiisetso Motsoeneng

JOHANNESBURG, Dec 5 (Reuters) - French transport and engineering group Alstom SA has won a $5.8 billion contract to supply passenger trains to South Africa, one of the largest government deals ever in Africa's biggest economy.

Under the ten-year programme, Alstom will build 3,600 new train cars to help overhaul South Africa's outdated rail network.

The contract will also create around 33,000 jobs, with Alstom required to build a manufacturing plant in South Africa, the head of the country's state rail agency said on Wednesday, adding the French company was chosen over rival bidders because of its competitive pricing and technological ability.

"We're not just buying trains, we are creating jobs and we are also revitalising our rail engineering industry," Lucky Montana, chief executive of the Passenger Rail Agency of South Africa, told a news conference.

He did not give details on the pricing of Alstom's bid.

Other bidders for the 51 billion rand ($5.8 billion) contract included Canada's Bombardier, Spain's CAF , Switzerland's Stadler Rail, China North Rail and China South Rail.

About 90 percent of the South African rail agency's train cars date back to the 1950s. The country is on a drive to update its trains and improve public transport to the millions of poor who are without cars.

The contract is the biggest rail deal currently in the works anywhere in the world, according to one industry source.

The first batch of trains is expected to be delivered in mid-2015.

Shares of Alstom rose on the news and were up 2.8 percent at 1455 GMT.

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