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GPR Leasing Africa concludes five-year rail deal

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Dry Bulk,

GPR Leasing Africa (GPR) has concluded a five-year lease of 100 grain hopper wagons to Corredor De Desenvolvimento Do Norte (CDN) in Mozambique.

CDN operates a part of the Nacala Corridor, which consists of the Port of Nacala in Mozambique, the Northern Railway network of Mozambique, and the railway system of Malawi (CEAR). The lease is supported by CDN’s transport agreement with Bakhresa Malawi Ltd, a Malawian company that owns a grain terminal in Nacala and a milling and packing facility in Malawi and part of the Bakhresa Milling Group, which has operations across eastern and southern Africa.

The wagons will be manufactured by and purchased from Galison Manufacturing from Welkom in South Africa.

“We are essentially supplying an African solution that will benefit three African countries,” said GPR’s Jacques de Klerk.

Willem Goosen, GPR’s Commercial Executive added that the deal is GPR’s first innovative wagon lease in Africa and that the freight wagon lease pipeline is substantial, so many additional deals, all over Africa, are expected to follow shortly. The agreement with CDN was signed in mid-October 2015 and the first wagons will be delivered in March 2016. “All 100 wagons are expected to be delivered before the end of Q4, 2016,” he said. “We are also exploring further opportunities in the locomotive and wagon space with CDN.”

André Soares, Director de Operações CDN, indicated that the benefits of the new wagons will be myriad. “The new wagons are built using the latest design and technology programs, which means they are lighter and will be more efficient and productive. We will gain payload (about 4 – 5 t per wagon), enjoy fuel efficiencies and lower our operating costs while driving up revenue. The leasing agreement means the wagons are not on our balance sheet and we haven’t had to spend any capital. This in turn improves our cash-flow and allows us to optimise our funds and concentrate on our core activities.”

The Galison-designed wagons also incorporate the latest safety technology and will be more environmentally friendly to operate compared to older, heavier wagons.

“This is an Africa success story that we have the ability to replicate almost anywhere on the continent,” stated Goosen. “GPR Leasing has built insurance into the lease rates of the wagons, which again enables CDN to focus on their core business and increase the profitability of their operations.”

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