Crunch the numbers, diesel locos for scrap in Australia do not raise much value, due to high labor and environmental compliance costs, in reducing the carcase to material suitable for recycling
As long as the World Bank and other international lending institutions continue to guarantee hire payments (and insurance) to certain African nations, the used NG locomotive market will continue to boom. Queensland is the ideal source, third world track weight so miniscule lightweight locos. There have been press reports that RRL's dry hire of 11 ex Queensland locos to the DRC was reputedly worth over US$30 mill for 3 years (with a maintenance and support contract let separately). Southern African artisan wage rates are on par with coastal China, so if you can land a loco for around US$200 to 250k, and patch up sufficiently for 3 years use, one could probably achieve well over a 200% return on investment (with low risk) over the 3 year period. This DRC contract will be increased to 18 locos by mid 2014. Australian companies are effectively barred from this market due to Australian law banning the payment of inducements and bribes, Africa is an extremely corrupt continent in which to conduct business.
Mozambique export coking coal. On present figures an additional 85 to 105 locos will be required by the end of Q1 2015 when the new/refurbished Moatize-Nacala line is in full use. Mozambique authorities are now strictly enforcing axle weights on the Moatize-Beira line (at 16.5 tonnes), the 3km+ Dona Ana Bridge having this axle loading. Vale had been running at least 6 double headed trains per 24 hours for the last 18 months over this structure (the Brits built strong bridges in the 1930's!). Vales Brazilian built GT26C-2 come in at 126 tonnes, so Vale had been overloading by at least 4.5 tonnes/axle. Must have been costing them a small fortune in payments for local authorities and politicians to turn a blind eye. 6 ex Qld 2600 class were lightened to 99 tonnes, and hired together with other lightweight locos to cover the bridge sector. Rather ironic the number of ex Queensland locos involved in building Moz into a world class metallic coal exporter.
RRL owner Grindrod has purchased a controlling interest in Mauritius registered NLP, the majority owner of
NLPI/BBR, who own the north-south rail link through Zimbabwe to Zambia, they have also leased the steam era ZECO locomotive rebuild shop in Bulawayo, as they will need to maintain up to 70 locos initially. Grindrod will require more motive power for Zimbabwe, as the NRZ are technically bankrupt, and look like they intend to sell access rights to additional routes. For the second time in 2 years, it looks like Zimbabwe has welched on its contract to purchase 14 SDD6 from CNR. The wide boys however will make a quid using the Zimbabwe rail network to transit between Zambia/Katanga, and Mozambique and South African ports. Traditionally the South African parastatal Spoorweg/Transnet has stepped in and lent/leased equipment and expertise to these nations, however now Transnet are experiencing loco and rolling-stock shortages themselves. The emerging South African loco hire companies have the ability to quickly react to changing circumstances, ready access to finance at favorable rates (and a plentiful locomotive source in Australia), so are cutting Transnet's bumbling and regulation bound Spoornet Leasing out of the frame. Transnet had attempted to manipulate the market, by limiting withdrawn locos for sale within South Africa (less than 25 diesels [all basket cases] auctioned over the last 3 years), Government ineptitude in backing this policy led to no bans on importing used locos, so the genie is loose, and close to 70 new and used units have been imported by free enterprise operators in the last 18 months, as well as RRL Grindrod Locomotives producing one new built locomotive (new frame/bogies recycled mechanicals from NREC) per week so far this year. All that Transnet and their militant unions can now do is to humbug the transit of private locos over their track, but as recent imports have shown, ex Qld locos are small enough to be readily transported by road.