CAPE TOWN, SOUTH AFRICA

Straight Outta Cape Town

Erica Murphy
Lucas Nugent
Andrew Przyjemski
Jacob Pio Scioscia

December 18, 2015

EXECUTIVE SUMMARY

The objective of this project is to propose a comprehensive solution to the upcoming EPA
Tier IV environmental regulations to which General Electric must adhere. Pittsadelphia
was defined as Cape Town, South Africa, and various options for freight transportation
were evaluated on the basis of capacity, emissions, costs, and public opinion. The South
African government is investing R300 billion (20.6 billion USD) in publicly owned freight
transportation company Transnet Limited to revamp the existing freight transportation
infrastructure to meet current environmental regulations. Public opinion on freight transport was analyzed in both Pennsylvania and South Africa. Survey results revealed a
strong interest in using natural gas to power freight transport. The top solution was a
two part plan involving liquefied natural gas ships and locomotives. Liquefied natural
gas will be supplied by neighboring country Mozambique and shipped to an import terminal that will be constructed at Saldanha Bay, South Africa. Four natural gas-powered
cargo ships will be purchased. In addition, South Africas existing 376 GE trains will all
be sold, replaced with Tier IV locomotives, and retrofitted with GEs NextFuel Natural
Gas Retrofit Kit. Both the LNG ships and locomotives will be supplied with LNG from
an intermodal natural gas storage unit. Twenty-four fueling stations will be fitted with
a modular fueling system compatible with the intermodal LNG unit. The total upfront
investment of $2.1 billion will be mitigated by a 50 percent reduction of fuel costs, corresponding to a break-even time of 18.08 years. The solution takes advantage of South
Africas investment in the freight transport industry to yield long-term savings in fuel
costs and lower emissions. It will bolster the South African economy and maintain the
current freight capacity.

CONTENTS

Introduction
1.1 Initial Problem Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.2 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1
1
1

Public Opinion Assessment

2.1 Gathering Customer Input . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1
1

External Search
3.1 Existing Methods of Freight Transportation . . . . . . . . . . . . . . . . . . .
3.2 City of Cape Town . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2
2
3

Engineering Specifications
4.1 Establishing Target Specifications . . . . . . . . . . . . . . . . . . . . . . . . .
4.2 Relating Specifications to Customer Needs . . . . . . . . . . . . . . . . . . .

4
4
4

Concept Generation and Selection

5.1 Concept Generation . . . . . .
5.2 Concept Selection . . . . . . .
5.3 Budget Cost Information . . .
5.4 Financial Analysis . . . . . . .
5.5 Project Management . . . . .
5.6 Environmental Statement . .

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5
5
5
10
11
13
13

Detailed Design
14
6.1 Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.2 CAD Drawings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Conclusions and Recommendations

15

INTRODUCTION

With the implementation of the new environmental regulations, GE is facing the problem
of meeting these requirements while continuing to thrive economically and maintain high
quality standards. The aim for this project was to generate and compare a diverse range of
solutions to this problem. This report details the consideration and comparison of several
possible solutions in a variety of freight transportation modes, culminating in a proposed
solution and a plan for implementing it.
1.1

Initial Problem Statement

GE has requested guidance in meeting the new Tier IV environmental regulations governing freight transport in the fictional city of Pittsadelphia. The city of Cape Town, South
Africa, faces the same problem as Pittsadelphia, as Cape Town owns 376 GE locomotives
that do not meet Tier IV standards. Therefore, this project aims to solve the following
problem: Evaluate methods for freight transportation in Cape Town, South Africa that
satisfy environmental requirements, and compare them according to emissions, costs,
freight throughput, delivery time, and public opinion.
1.2

Objectives

The objective of this project is to develop a solution that is cost-effective, satisfies the
regions environmental requirements, decreases pollutants, and maintains or increases
freight capacity.
2

PUBLIC OPINION ASSESSMENT

Opinions on freight transportation were assessed by distributing a survey to residents of

Pennsylvania and South Africa. Respondents compared the three major modes of transportation (road, rail, freight) as well as diesel versus natural gas. The results from both
surveys were analyzed and compared.
2.1

Gathering Customer Input

Two identical surveys were sent out. One of these surveys went to Pennsylvanians and
one went to South Africans. To maintain a higher level of randomness, the surveys were
labeled simply "Pennsylvania Improvement Survey" or "South Africa Improvement Survey" respectively to avoid catering to any specific type of person. The Pennsylvania survey was posted to various Pennsylvanian Reddit pages and the Penn State Class of 2019
Facebook group. The survey directed toward South Africans was sent out through several South African Reddit pages as well through mass email to South Arfican residents. A
total of 132 responses were received from Pennsylvanians. As is the case with any anonymous survey sent out through social media, several respondents put either 1 or 10 for
every answer to skew the data. After looking through each response, all seemingly malicious responses were deleted to allow for more accurate results. There were 122 usable
responses. The South African survey received 34 responses, all of which were usable.
The first part of the survey was an optional open-ended question allowing the respondents to comment their thoughts on the current freight system and infrastructure in their
respective regions. The comments from both surveys centered on the idea that rail transport is underutilized and trucks are overbearing on the highways. Many respondents

commented ideas such as: "The train lines need to be rebuilt and expanded to reduce
road traffic", "The railways are under utilized", or "Overly dependent on trucking".
The next part of the survey asked the respondents to rank the importance of the the following factors as they pertain to freight transport: Environmental Impact, Noise in Public
Areas, Shipment Time, Shipment Cost, and Road Traffic. Most respondents interpreted
"rank" as "rate", however. There were 93 Pennsylvanian respondents who rated and 28
South Africans; these responses were analyzed. The ratings were provided on a scale of
one to five, one being the worst and five being the best. As displayed in Table 1, residents
of South Africa view road traffic as the most important, while residents of Pennsylvania
view environmental impact as the most important. This finding suggests that the South
African Governments initiative to decrease trucks and increase use of trains is consistent
with the desires of the population.
The third section of the survey asked the respondents their opinion of natural gas compared to diesel for road, rail, and sea cargo transportation. The respondents rated natural
gas trucks, trains, and ships as well as diesel trucks, trains, and ships. Comparing the results in Table 2 and Table 3 reveals that residents of both South Africa and Pennsylvania
prefer natural gas over diesel, and they prefer trains over trucks and ships.
3

EXTERNAL SEARCH

Research on current methods of freight transportation in various regions of the world

was conducted as a means of benchmarking. Subsequently, more specific research was
conducted on the city of Cape Town and the regulations that govern it as well as the
current methods of freight transportation.
3.1

Existing Methods of Freight Transportation

The four primary methods currently employed for freight transportation are trains, trucks,
planes, and ships. International transportation networks frequently incorporate multiple
methods linked through an "intermodal" system. Combustion of fossil fuels - primarily
diesel - is the primary source of power for freight transportation. This method, however,
generates particulate matter (PM), carbon dioxide (CO2 ), nitrogen oxides (NOx ), sulfur
oxides (SOx ),and air toxins as byproducts. Looking at CO2 emissions in light of cargo
volume reveals that planes emit the most CO2 per Gtkm of cargo; trains and ships emit
the least; and trucks fall in the middle [10]. Determining the most ideal system of freight
transportation requires an analysis and comparison of shipping cost, capacity, time, and
environmental impact.
Table 1: Average rating of importance of factors related to freight transportation, as rated on a scale of 1-5
by 93 Pennsylvanians and 28 South Africans

Pennsylvania
South Africa

Environmental Impact
3.89
3.19

Noise
3.0
3.11

Shipment Time
3.56
3.89

Shipment Cost
3.8
4.15

Road Traffic
3.61
4.26

3.2

City of Cape Town

Pittsadelphia is being defined as the city of Cape Town, South Africa. Located on the
coast of Africa, just east of the continents southernmost point, Cape Town contains approximately 3.75 million residents in its 2461 square kilometers. Its coastline stretches 294
kilometers, while the Table Mountain, formerly an island, dominates much of the citys
interior. [17].
Transnet Limited is the government-owned infrastructure and transportation company of South Africa. The company is responsible for moving thousands of pounds of
goods throughout the country every day. The various sub companies of Transnet Limited are focused on the various sectors of infrastructure and transportation. The divisions
of Transnet Limited relevant for the project are the Transnet Ports Authority, Transnet
Port Terminals, and Transnet Freight Rail. Transnet Freight Rail operates a rail network
throughout South Africa, linked to other sub-Saharan rail networks. This infrastructure
comprises approximately 80 percent of Africas total rail infrastructure. Transnet Freight
Rail conveys 17 percent of South Africas freight, as well as 100 percent of exported coal
and 100 percent of exported iron ore. [Tra]
The South African Government plans to invest R300 billion ($20.6 billion) in Transnet
for improvements to the infrastructure of the country. Of this, R200 billion ($13.6 billion) will be allocated specifically to Transnet Freight Rail. With this investment, Transnet
Freight Rail plans to increase cargo volumes and capacity while also stimulating the economy. Their goal by 2019 is to increase annual tons of cargo transported within South
Africa from approximately 200 million tons to 350.3 million tons. This, along with a variety of other freight-related initiatives, is part of the South African governments "Market
Demand Strategy" (MDS). One key component of the MDS is the transfer from freight
transport by truck to freight transport by rail. Thus, the MDS is projected to increase cargo
volumes while decreasing road traffic as well as cost and time associated with freight
transport. [5].
In March of 2014, Transnet ordered 233 GE Tier III Evolution Series locomotives, supplementing the 143 Tier II locomotives ordered since 2010. Each of the Evolution Series locomotives has a freight capacity of 3,840 tons and average speed of 62 mph. The
12-cylinder diesel-electric engine supplies 4200 horsepower a 27 percent improvement
from the previous model by transforming diesel into electricity. This electricity spins
the trains motors and thus drives the axles, which are individually powered through alternating current (AC) technology. The Evolution Series reduces emissions by 40 percent
and fuel use by 5 percent compared to previous models, according to GEs estimation
[15].
80% of imports to South Africa arrive by ship. However, until September of 2015, no
commercial ships were registered under South Africas ship register. With the registration
Table 2: Favorability of diesel vs natural gas in Pennsylvania, as rated on a scale of 1-10 by 122 Pennsylvanians

Natural Gas
Diesel
Sum

Road Transport

Rail Transport

Sea Transport

Sum

6.09
4.35
10.44

7.02
5.4
12.42

6.66
4.76
11.42

19.77
14.51

of the first commercial ship, Cape Orchid, in September, the Department of Transportation and the South African Maritime Safety Authority (SAMSA) commenced plans to
build up a domestic shipping fleet to convey some of South Africas 260 million tons of
annual cargo. "About 98% of the countrys internationally bound trade is carried by ships
and at least R160bn a year is paid for shipping services to foreign owners and operators"
[9]. A revision of the maritime infrastructure is thus underway in South Africa, with a
focus on bolstering the new, locally-owned commercial shipping fleet.
Any solution to the problem statement must adhere to the environmental regulations
that govern freight transportation in Cape Town. South Africa is subject to the EPAs effort
to enforce its regulations in Sub-Saharan Africa [EPA]. Therefore, Cape Town will abide
by the EPAs Tier IV regulations on diesel locomotives. Regarding transport by sea, South
Africa adheres to international requirements. The International Maritime Organization
(IMO) adopted Annex VI to MARPOL in 2008, placing stringent regulations on emissions
of sulphur and nitrogen oxides from ships. "The highest sulphur content allowed in ship
fuel will reduce globally as of 1 January 2012 from 4.5% to 3.5% and as of 1 January 2020
to 0.5%" [14]. These requirements are necessitating a switch from heavy, high sulfur fuels
to cleaner, low sulfur fuels such as natural gas.
4

ENGINEERING SPECIFICATIONS

From the requirements of the problem statement and the results of the surveys, target
specifications were identified and related to customer needs. Interactions among different
needs were then identified and analyzed.
4.1

Establishing Target Specifications

Since the South African government is investing R300 billion (approximately 20.6 billion
USD) in Transnet Limited, $20.6 billion will be considered the budget within which any
solution must fall. Moreover, any solution should be equivalent to or better than diesel in
fuel cost efficiency; the minimum value for this criteria would thus be the value for diesel,
160 ton mi/$. According to EPA guidelines, NOx emissions must fall below 1.3 g/hp/hr,
and PM emissions must fall below 0.03 h/hp/hr. With South Africas goal to transport
350.3 million tons of cargo annually, the daily capacity would be 1/365th of this number,
or 959,726 tons; this number will be rounded to 1,000,000 tons. Additionally, according
to the results of the survey of South Africans displayed in Table 2, any solution should
decrease road traffic. Finally, at least half of the population must approve of the solution.
4.2

Relating Specifications to Customer Needs

Table 4 visualizes the relationship between the target specifications previously identified
and their associated metrics. This table also identifies interactions among customer needs.
Table 3: Favorability of diesel vs natural gas in South Africa, as rated on a scale of 1-10 by 34 South Africans

Natural Gas
Diesel
Sum

Road Transport

Rail Transport

Sea Transport

Sum

4.91
4.59
9.5

6.65
5.91
12.56

6.32
5.32
11.64

17.88
15.82

CONCEPT GENERATION AND SELECTION

This section describes the methods utilized to generate concepts as potential solutions
to the problem statement, and the evaluation of these concepts through screening and
scoring matrices in order to select a final concept.
5.1

Concept Generation

Concepts were generated through the brainstorming and idea trigger methods. During
the brainstorming session, each team member wrote down as many concepts as he or she
could think of, suspending judgement, for five minutes. Concepts could be described by
either writing or sketching. After this five minute period, each group member read off his
or her ideas, sparking new ideas that the group then discussed. The group coordinator
compiled all ideas into a single list.
The idea trigger session involved a 60-second period of tension, during which group
members recorded ideas individually; a 30-second period of relaxation, during which
group members refrained from writing; and an additional 60-second period of tension.
The group then proceeded to share the ideas each member had written. Group members
crossed off duplicates from their own lists. Next, the activity was repeated two more
times, allowing members to trigger ideas through discussion and record them on paper.
The group coordinator compiled all ideas from this idea trigger session with the ideas
from the brainstorming session.
These concept generation methods yielded several dozen ideas involving a variety
of modes of transportation. A tree diagram (Figure 1) was developed to organize these
possible solutions first by transportation mode (road, rail, sea, air) and then farther within
each major mode.
5.2

Concept Selection

From the list of generated concepts, any concept that would not be feasible within the
given time frame was disregarded. This included any idea that has not been implemented
at least in part in another country. Concepts not directly applicable to the problems GE
is facing were disregarded as well. The following concepts were thus disregarded prior
to screening: relocating roads; powering trains with electricity generated from hydrogen
fuel cells; directly collaborating with other companies (sharing trains and cargo loads);
establishing junctions; powering boats with fusion; and powering boats with ocean currents.
Table 4: Needs metrics matrix relating customer needs to target specifications and highlighting interactions
between different needs.

$20
billion
Upfront cost
Fuel cost efficiency
Emissions
Capacity
Road traffic
Popular opinion

x
x
x
x
x
x

160
ton-mi/
$

NOx
1.3
g/hp/hr

PM
0.03
g/hp/hr

>1
million
tons

x
x

x
x
x

< current
number of
vehicles on road

50%
of population
approves

x
x
x
x

Figure 1: Tree diagram organizing generated concepts.

5.2.1

Concept Screening

A screening matrix (Table 5) was developed to compare the generated proposed solutions
on a variety of criteria. These criteria were identified from research as well as analysis of
public opinion. Replacing the existing fleet with Tier IV locomotives was the baseline for
the screening matrix.
Upgrading the locomotives to Tier IV standards using after-treatment hardware would
be less expensive than replacing them with Tier IV trains. However, this upgrade would
require long-term after-treatment costs of $100 thousand per train per year [25]. A range
of alternative methods for powering locomotives were considered. Biodiesel offers the
potential to reduce greenhouse gas emissions by 50 percent and create over 20 thousand
jobs in South Africa, but the implementation time and costs would be too extensive to be
plausible for GEs needs [20]. Electrifying the railways seemed plausible, as South Africa
ranks among the worlds four least expensive producers of electricity. Coal is abundant
in northeastern South Africa. However, generating electricity from coal to power trains
would add to South Africas abundance of discard coal and increase emissions of particulate matter and nitrogen oxides [Coa]. In addition, the current railways in South Africa
are extensive enough that replacing them all to be compatible with electric trains would
be an unnecessary cost. An advantage of hydropower is its accessibility, as South Africa
could import it from the neighboring countries of Mozambique, Zambia, Zimbabwe and
Zaire. A disadvantage is its potential to cause flooding and damage wildlife habitats [23].
6

It would also require electrification of the rails. Nuclear powered trains were considered
due to the presence of a uranium mining industry and uranium reserves in South Africa.
However, the upfront costs and implementation time would be too large to be plausible
[22]. Solar power was another alternative, considered due to the plentiful sunshine in
South Africa year-round. This concept, however, lacks feasibility to generate enough
power to support South Africas growing freight transportation industry [23]. South
Africa, as a coastal city, experiences substantial wind strength and speed. However, the
space required for the installation of wind turbines, as well as the loud noise produced by
these turbines, would render this concept unfavorable to the public [23]. Electromagnetpowered trains were a potential solution. In 2012, Japan unveiled magnetic levitation, or
"maglev," trains, which are not due to go into use until 2027. These trains would minimize
emissions since they use no fuel and reduce shipping times because they travel at up to
310 miles per hour [8]. However, because of the urgent need to meet Tier IV requirements,
implementing this concept would again be too time-consuming.
According to South Africas Department of Energy, "With the availability of natural
gas in neighbouring countries, such as Mozambique and Namibia, and the discovery
of offshore gas reserves in South Africa, the gas industry in South Africa is undergoing
rapid expansion" [21]. GE currently offers a liquefied natural gas (LNG) retrofit kit but not
a compressed natural gas kit; utilizing LNG as a fuel is thus more feasible than utilizing
CNG. LNG is also much easier to transport, as it takes up 30 percent of the volume of
CNG since its highly condensed [for Liquefied Natural Gas]. By allowing for up to 80
percent replacement of diesel with natural gas, GEs Nextfuel Natural Gas Retrofit Kit
would reduce fuel costs by up to 50 percent [25]. The primary disadvantage is the high
upfront cost: conversion to natural gas would entail retrofitting the trains ($1 million
dollars per train) as well as updating fueling stations ($1 billion dollars) [25].
In heavy duty trucking, natural gas has been shown to reduce NOx emissions by up to
45 percent, while reducing PM emissions by over 90 percent [16]. Hybrid trucks, which
run on electricity and diesel, would reduce fuel costs and emissions. Due to the poor
condition of South Africas roads, utilizing trucks, whether natural gas or hybrid, would
require a complete overhaul of the road infrastructure [7]. Such an overhaul would require a significant investment of funds, which government-owned Transnet prefers to
allocate to the freight rail industry rather than freight trucks [5].
Based primarily on costs per kilogram per mile, freight transportation by air would
be the least effective out of the proposed possible solutions. The costs associated with
freight transport by air are approximately 4 to 5 times that of road transport and 12 to
16 times that of sea transport. The positives of air transport are that planes are very
effective at shipping high-value, time sensitive products, including perishable food and
pharmaceuticals [6].
Solutions involving transportation by sea were next evaluated. Developing technology to power ships with nuclear reactors or wind power was considered. A pro of these
concepts would be reduced emissions, but it decided that they would be too costly and
time-consuming to solve the problem. The possibility of fueling ships with natural gas
rather than bunker fuel off which cargo ships currently run seemed a feasible and sustainable solution. Converting to natural gas, which, unlike bunker fuel, does not contain
sulphur, could reduce NOx emissions by as much as 85 percent and eliminate SOx emis-

sions entirely [31]. The International Maritime Organization (IMO) adopted Annex VI
to MARPOL in 2008, placing stringent regulations on emissions of sulphur and nitrogen
oxides from ships [26]. Converting to natural gas is thus a highly sustainable solution
in other words, it would be able to continue meeting regulations as they become more
stringent. Converting to diesel would likewise require a high upfront cost, but it would
be less sustainable due to diesels high NOx emissions.
The concept of improving cargo containers would involve developing more lightweight,
efficient containers and thus reduce emissions. However, this concept, on its own, would
not sufficiently reduce emissions to meet Tier IV standards. Therefore, it would not warrant an investment of time and money.
5.2.2

Concept Scoring

After analyzing the screening matrix and conducting more research, a concept scoring
matrix (Table 6) was generated to compare the following concepts: replacing the existing
fleet with Tier IV locomotives; upgrading the existing fleet to meet Tier IV standards;
retrofitting the locomotives with LNG; and utilizing natural gas-powered ships. These
potential solutions were evaluated in the context of Cape Town according to their cost,
capacity, emissions, and safety.
The weights were chosen to reflect the needs, laid out by GE, that any proposed solution must fulfill. The highest weighted section was Fuel Cost Efficiency. Essentially this
is a measure of the cost for transporting one ton of freight one mile. This criteria received
a weight of 25, because after meeting the environmental regulations, keeping costs low
is extreme important. NOx and PM emissions were given the next highest weighting.
While meeting emission standards is the brunt of the project, all four solutions will meet
the requirements. Thus the ratings for NOx and PM emissions are in regards to exceeding
regulations and received weightings of 10 each. Since capacity is a large concern for the
South African government, the freight capacity was weighted as the next highest measure
at a 7. Upfront costs are a huge concern for any large-scale project such as this. Given the
high proposed budget of $20.6 billion dollars, all solutions fall comfortably below this
cost. Upfront costs were therefore given a weighting of 4. Safety, while always a high
concern, was not a major component of the problem and none of the proposed solutions
dramatically increased safety risks. Safety was therefore weighted at a 3. The selection
criteria "Recurring Treatment Costs" affects only one of the three solutions, upgrading the
fleet to Tier IV. A high weighting would have given this category heavy say in the final
decision. Additionally, all solutions will likely have some additional long-term costs of
their own. Recurring Treatment Costs was therefore given the lowest weighting of 2.
Scores were calculating using a single baseline system. For a given criterion, each
value was taken as a fraction of the highest value in that category; the result was multiplied by 10. If high values were favorable for example, greater capacity is preferred to
less capacity then the resulting value was used as the score. In contrast, if high values
were unfavorable for example, a low upfront cost is preferred to a high upfront cost
then the value was subtracted from 10 to yield the score.
Cape Town currently utilizes 143 Tier II locomotives and 233 Tier III Evolution Series
Locomotives. Replacing these with Tier IV locomotives would cost $4 million [25], minus
the sale price of $1.5 million for each Tier II [28] and an assumed $2.25 million for each Tier
IV. The net cost for replacement would be 143 (4 106 1.5 106 ) + 233 (4 106 2.25
8

106 ) = $765, 250, 000. No after-treatments would be required. The diesel fuel would cost
approximately $2.93 per gallon, according to the United States national average in July
2015 [19]. In order to meet Tier IV standards, emission of nitrogen oxides (NOx) must fall
between 0.0 and 1.3 g/hp/hr, while particulate matter (PM) emissions must fall between
from 0.0 to 0.03 g/hp/hr [25]. Assuming the Tier IV trains are meeting the minimum
requirements, 1.75 g/hp/hr was used as the value for NOx emissions, and 0.1 g/hp/hr
for PM emissions. Each GE Evolution series has a capacity of 3,840 tons [15]. The total
capacity for Cape Towns fleet would be 3840 * 376 = 1,443,840 tons. Safety for trains can
be quantified as 1.15 deaths per billion ton miles [Car].
Upgrading each Tier II locomotive to Tier III requires a $750,000 upgrade cost; the
subsequent conversion to Tier IV would require $1,000,000, plus $100,000 in yearly aftertreatment costs [25]. Over a period of n years, this cost would a total of 143 (1.75
106 + 100, 000n) + 233 (1 106 + 100, 000n) = $483, 250, 000 + $47, 600, 000. Setting this
expression equal to the cost of replacing the fleet, $765,250,000, reveals that after a period
of n=16 years, the cost of upgrading with after-treatment hardware would surpass the
cost of replacement. Values for fuel cost, capacity, emissions, and safety match those for
replacing the existing fleet.
Retrofitting all 476 locomotives with GEs NextFuel Natural Gas Retrofit Kit would
cost approximately $1 million per locomotive, for a total of 1 106 476 = $476, 000, 000.
[11]. Prior to retrofitting, the locomotives would also have to be upgraded to meet Tier IV
standards or replaced with Tier IV. Assuming replacement, $765,250,000 must be added to
the upfront cost. Another upfront expense is creating an import terminal, which the South
African government has already considered building at Saldanha Bay. Poland has been
constructing an LNG import terminal in a $642 million effort [24]. Using this number as
a benchmark, it is estimated that constructing an LNG import terminal at Saldanha Bay
would cost $642 million. A natural gas pipeline would also be constructed, stretching
140 km (81 mi) from Saldanha Bay to Cape Town. Such a pipeline would cost $70,000
per inch (of diameter) per mile (of length) [30]. Therefore: $70, 000/(in mi ) 17.57in
81mi = $99, 600, 000. The cost to install one natural gas fueling station for trucks ranges
from $1 million to $4 million [of Energy]. Upgrading Cape Towns fueling station to offer
natural gas will cost an estimated $8 million. The total upfront cost would thus be 4.76
108 + 7.6525 108 + 6.42 108 + 9.96 107 + 8 106 = approximately $2 billion. Fuel costs
would decrease compared to diesel locomotives. The United States national average for
natural gas in July 2015 was $2.39 per diesel gallon equivalent (DGE) [19]. Values for
freight capacity and safety would remain the same as those for replacing the fleet. GE has
articulated that NOx and PM emissions would meet requirements, but has not specified
what the respective values would be. Thus the minimum values to meet requirements
were used, 1.3 g/hp/hr of NOx and 0.03 g/hp/hr of PM [25].
Cargo ships with a capacity of 43,400 tons would cost $262,000,000 each. Natural gas
cargo ships would cost an estimated $500,000 more, for a total of $262,500,000 per ship
(insert citation). South Africa recently registered its first merchant ship, and the South
African Maritime Safety Authority (SAMSA) intends to register more ships to convey
some of the 260-million tons of cargo that enter and exit national ports each year [9].
Assuming South Africa intends to convey 25 percent of this cargo on its own ships, 0.25
(2.6 108 tons/year )/(365days/year )/(4.34 104 tons/ship) indicates that 4 ships would

be required, for a total capacity of 173,600 tons and a total cost of $106,000,000. 1.47
g/hp/hr of NOx would be emitted; 0.04 g/hp/hr of PM would be emitted. The safety
can be quantified as 0.01 deaths per billion ton miles ??.
Upon analyzing Table 6, natural gas-powered ships emerge as the clear winner, particularly due to their efficiency in transporting cargo per dollar of fuel. However, since
South Africa depends upon an intermodal transportation system, it is impossible do away
with locomotives altogether. Therefore, the remaining three concepts must be analyzed
as a supplement to natural gas ships. The natural gas ships would necessitate import
of natural gas; it would be judicious to direct some of this fuel toward locomotives and
utilize GEs NextFuel Natural Gas Retrofit Kit. In order to meet Tier IV standards, either replacing or updating the locomotives would also be necessary. Replacement scored
higher than upgrading, so South Africas trains would be replaced prior to retrofitting
them. In sum, a three-part plan is being proposed: replacing South Africas locomotive
fleet with Tier IV locomotives, retrofitting them with the Nextfuel Natural Gas Retrofit
Kit, and purchasing natural gas-powered ships.
5.3

Budget Cost Information

The proposed maximum budget is the R300 billion ($20.6 billion). Since the existing rail
infrastructure will not be altered, the major contributing factors to the total expenditure
are: Four LNG ships, 376 new Tier IV locomotives with LNG retrofit kit, and 24 LNG
fueling stations with the associated gantry cranes. In the short term we will be saving
some money by selling the existing Tier II and Tier III trains. Primary long term savings
are expected to come from fuel savings.
As seen above in Table 5, all concepts that would require a revamp or full electrification of the rail system were screened out. Thus, no direct costs will be associated with the
rail network.
New fueling stations will need to be constructed. Current GE Tier 4 Evolution Series
using diesel specs are 484 ton-miles per gallon of freight. [29] The maximum distance
between diesel fueling stations would be 605 miles, as seen in Equation 1.
According to GE, the Natural Gas Retrofit Kit more than doubles the refuel distance
[27]. Therefore fueling stations will be needed every 1210 miles. South Africas rail network is 20,247 km, or 12,581 mi, in length [4]. Approximately 10 fueling stations are
necessary at the least (Equation 2). There are approximately 24 highly populated cities in
South Africa separated from the closest others by a distance of less than the 1210 miles. We
thus propose creating 24 LNG fueling stations at these major cities where there are likely
existing diesel fueling stations already in place. It The cost to install 1 fueling station
range from $1 million to $4 million for trucks which comparable to the cost of a fueling
station for a train but smaller, therefore each new LNG fueling station is estimated to cost
$8 million. [of Energy] Thus, the estimated total cost of the fueling stations is $192,000,000
(Equation 3).
Liquefied natural gas will be shipped from Mozambique to Saldanha Bay, South Africa.
The South African government is already planning to invest in an LNG import terminal
there. The estimated cost is approximately $642,000,000, benchmarked off of Polands
creation of an LNG Import terminal. [24].
South Africas 376 Tier II and Tier II locomotives will be sold, 376 GE Tier 4 Trains will
be purchased: $765,250,000
10

All of the new 376 Tier 4 trains South Africa has purchased will be retrofitted with
the GE Natural Gas Retrofit Kit which costs $1,000,000 dollars per train yielding a total of
$376,000,000 [11]
Cargo ships with a capacity of 43,400 tons would cost $26,200,000 each. Natural gas
cargo ships would cost an estimated $500,000 more, for a total of $26,250,000 per ship.
Since any solution must convey 165,000 tons of cargo per day, four ships would be required, for a total capacity of 173,600 tons and a total cost of $106,000,000.
Total cost equals $2,081,250,000 which equals R30,168,655,312.50 which is less than the
total budget of R300 billion that South Africa plans to invest in Transnet.
5.3.1

Budget Calculations

The equation for each of these calculations are as follows:

484mi ton/gallon (1/3840tons) (4800gallons) = 605miles

(1)

12, 581mi/(1210mi/fuelingstation) = 10fuelingstations

(2)

$8, 000, 000 24fuelingstations = $192, 000, 000

(3)

$1, 000, 000/train 376trains = $376, 000, 000

$106, 000, 000 + $642, 000, 000 + $765, 000, 000 + $376, 000, 000 + $192, 000, 000 =
$2, 081, 000, 000
5.4

Financial Analysis

Switching to natural gas powered locomotives results in a lower annual fuel cost when
compared to diesel. To determine if the money saved by switching to natural gas is worth
the initial investment calculations were done to estimate the break even time for investing
in the natural gas retrofit kits.
The first step to finding break even time is determining what the future cost of LNG
and diesel will be. To do this historical data on diesel prices and Natural gas prices was
graphed and a trend line was formed. This trend line was followed 30 years into the
future to gain a rough estimate of future fuel prices. It was determined that 30 years is
an appropriate time line because the average life span of a locomotive is around 30 years.
Figure 2 shows the historical price of diesel from April 1994 to November 2015.
Using this data a linear trend line with the following formula was formed:
f ( x ) = 20, 307, 268 + 66, 067n
Where "n" is the number of months past November 2015 and f(x) is the price of a gallon
of diesel. Figure 3 shows the historical price of liquefied natural gas from January 1997 to
November 2015.
Using this data a linear trend line with the following formula was formed:
g( x ) = 3, 653, 202 + 2, 602n
11

Figure 2: Historical Diesel Prices

Figure 3: Historical LNG Prices

Where "n" is the number of months past November 2015 and g(x) is the price of a gallon
of LNG. Both trend lines were then extended to provide an estimated cost of fuel over the
next 30 years. The fuel costs were also multiplied by the amount of fuel used each year
by Cape Town to provide an approximation of money spent each month on fuel. Figure
4 shows the monthly expenditure on diesel compared to LNG.
To find the cumulative amount of money saved by switching to LNG the following
equation was used.
Z n

(20, 307, 268 + 66, 067n) (3, 653, 202 + 2602n) du
0

Where "n" is the number of months past November 2015. This integral was then used to
calculate the cumulative sum of money saved month by month. This amount of money
saved was compared to a different scenario in which the total money spent on upgrading
the trains was instead invested in a bank at a 5% appreciation rate. Figure 5 shows the the
total amount of money saved by switching to LNG, compared to the amount of money
gained by investing in the bank. The point where these two curves cross is the break even
point.
12

Figure 4: Fuel Costs per Month

Figure 5: Return On Investment

Figure 5 shows that the break even time for this project is approximately 18.08 years.
This shows that locomotives retrofitted with the LNG conversion kits will help GE save
money in the long termon fuel costs.
5.5

Project Management

Due to stringent deadlines in for initial prototypes and concepts, The team stayed exactly
on track with the Gantt chart in the beginning. However, with nothing final due until the
very end of the report, a more spiral like method was utilized and multiple parts of the
project were revisited and revised.
5.6

Environmental Statement

Because South Africa abides by many of the same EPA regulations that USA does, The
trains will be upgraded to run on Liquid Natural Gas (LNG) with a diesel option as a
fallback method in the case o running out of fuel. These LNG trains will exceed the
minimum requirements of the new EPA regulations, pushing South Africa far beneath
many countries in terms of negative environmental and health impacts due to NOx and
particulate emissions.
13

Figure 6: Gantt Chart

DETAILED DESIGN

Using the final concept described above a detailed design plan was made. This design
plan covers the implementation of the LNG storage units, LNG ships, LNG locomotives,
LNG import terminal, and locomotive fueling stations. The use and implementation of
these technologies requires the supply and use of Liquefied Natural Gas which will be
transported in an intermodal LNG storage unit. This storage unit allows for the shipment
of LNG on ships and trains, as well as functioning as a fueling station for locomotives.
6.1

Analysis

LNG Storage Units The transfer of LNG can be made much easier by using a universal
storage container that can be used on both trains and ships. This simplifies the transportation of LNG by removing the need to transfer large quantities of LNG to and from
different storage containers. In addition these storage units can be used to create locomotive fueling stations.
6.1.1

LNG ships

The LNG ships being implemented in this project are modeled after the ships currently being developed by TOTE incorporated. These ships will carry a maximum of 3,100 TEUs
and run off of natural gas or bunker fuel. Because the current state of natural gas infrastructure is lacking, it is important that these ships also have the ability to run off of bunker
fuel.
6.1.2

LNG Locomotives

The plan for the locomotives is to replace all Tier II and Tier III locomotives in South Africa
with tier 4 locomotives. This change is to make all locomotives meet tier 4 standards.
Then all tier 4 locomotives will be fitted with the natural gas retrofit kit. The low cost of
natural gas will allow for lower fuel costs compared to diesel trains.

14

Figure 7: Natural Gas Storage Unit

6.1.3

LNG Import Terminal

An LNG import terminal will be constructed in Saldanha bay to facilitate the transfer of
LNG from Mozambique to South Africa. Saldanha bay is the only port on the western
side of South Africa that has deep enough ports for LNG transport ships. From there the
LNG will be shipped from Saldanha bay to Cape Town via train.
6.1.4

Fueling Stations

The fueling stations that will be built will utilize the Natural gas storage units to refuel
locomotives. These storage units can be unloaded from the trains using a gantry crane
and placed in cells where they are hooked up in series and used as refueling tanks. This
allows for fueling stations and can be placed in remote area without requiring any existing
infrastructure.
6.2
7

CAD Drawings
CONCLUSIONS AND RECOMMENDATIONS

The proposed solution satisfies the target specifications as well as fits in with South
Africas existing plans and goals; Investing in natural gas locomotives and ships will
yield lasting savings in fuel costs and emissions. Moreover, implementing these plans
will generate jobs and thus stimulate the South African economy.

15

Figure 8: Natural Gas Storage Unit Inner Workings

Figure 9: Natural Gas Powered Ship

16

Figure 10: Natural Gas Fuel Station

Figure 11: Tier 4 Train Fitted with Natural Gas Retrofit Kit

17

LITERATURE CITED

[Coa] Republic of south africa department of energy:energy sources: Coal.

[Car] Tennessee-tombigbee waterway: Cargo capacity of different transportation modes.
[Tra] Transnet freight rail: Company overview.
[4] (2012). South africas transportation network.
[5] (2012). Transnet freight rail: Our seven year strategy.
[6] Bank, T. W. (2011). Air freight.
[7] Ben-Ari, N. (2014). On bumpy roads and rails.
[8] Caulfield, P. (2012). Japan unveils levitating high-speed train that runs on magnets,
not wheels.
[9] CBN (2015). First sa cargo ship registered.
[10] Corbett, J. and Winebrake, J. (2007). Sustainable goods movement: Environmental
implications of trucks, trains, ships, and planes. EM, pages 812.
[11] Crawford, M. (2014). Is lng the fuel of the future for freight trains?
[EPA] EPA. Epa efforts in sub-saharan africa.
[for Liquefied Natural Gas] for Liquefied Natural Gas, C. Liquefied natural gas vehicles.
[14] Kalli, Juha, K. T. and Makkonen, T. (2009). Sulphur content in ships bunker fuel
in 2015: A study on the impacts of the new imo regulations and transportation costs.
Technical report, University of Turku.
[15] Kellner, T. (2014). Let the train blow the vuvuzela: South africas transnet buys advanced ge locomotives.
[16] Lyford-Pike, E. (2003). An emission and performance comparison of the natural gas
c-gas plus engine in heavy-duty trucks. Technical report, Cummins, Inc., NREL/SR540-32863.
[17] of Cape Town, C. (2012). Statistics for the city of cape town - 2012.
[of Energy] of Energy, U. D. Natural gas fueling infrastructure development.
[19] of Energy, U. D. (2015). Clean cities alternative fuel price report.
[20] of South Africa Department of Energy, R. Biofuels pricing and manufacturing eronomics.
[21] of South Africa Department of Energy, R. Natural gas.
[22] of South Africa Department of Energy, R. Nuclear energy.
18

[23] of South Africa Department of Energy, R. Renewable energy.

[24] Poland, R. (2015). Polish lng terminal in winoujZcie

to open may 16.
[25] PSU, G. T. . (2015). Freight, fuel, & emissions: Edsgn100.
[26] Stefanakos, O. S. . C. (2013). The cost of sox limits to marine operators; results from
exploring marine fuel prices. TransNav, 7(2):275281.
[27] Transportation, G. (2013). Nextfuel natural gas retrofit kit with dual fuel technology.
[28] Transportation, G. (2015a). Frequently asked questions.
[29] Transportation, G. (2015b). Making locomotives.
[30] Tubb, R. (2009). Billions needed to meet long-term natural gas infrastructure supply,
demands.
[31] Woessner, T. E. M. . L. N. A. (2013). Policies taking shape for natural gas-fueled ships.

19

Table 5: Concept screening matrix filtering generated concepts using unweighted criteria.

Selection Criteria
Hybrid trucks
Natural gas trucks
Purchase Tier IV trains
Upgrade trains to Tier IV
Biodiesel trains
Retrofit trains w/ CNG
Retrofit trains w/ LNG
Solar-powered trains
Wind-powered trains
Nuclear-powered trains
Maglev trains
Reconfigure paths
Nuc. reactor-pwrd. ships
Wind-powered ships
Natural gas ships
Diesel-powered ships
Planes
New cargo containers

Upfront
Cost

Fuel
Cost

NOx

PM

Shipping
Time

Feasibility

Sustainability

Total

0
+
+

+
+
0
+
+
+
+
+
+
+
+
+
+
+
-

+
+
0
0
+
+
+
+
+
+
+
+
+
+
0
+

+
+
0
0
+
+
+
+
+
+
+
+
+
+
+
0
+

0
0
0
0
0
0
0
0
0
0
+
+
0
0
+
0

0
0
0
0
0
0
0
0

+
+
0
+
+
+
+
+
+
+
+
+
+
+
0
+

2
3
0
-1
1
2
3
2
2
2
3
3
2
1
3
-3
-3
3

Table 6: Concept scoring matrix comparing final four concepts using weighted criteria

Replace existing
Upgrade existing
fleet with Tier IV
fleet to Tier IV
Selection Criteria Weight Rating
Score
Rating
Score
Upfront Cost ($)
4
6.17
24.70
7.58
30.34
Recurring Treatment Costs ($)
2
10.00
20.00
0.00
0.00
Fuel Cost Efficiency (ton mi/$)
25
1.23
30.77
1.23
30.77
Capacity (tons)
7
10.00
70.00
10.00
70.00
NOx Emissions (g/hp/hr)
10
1.16
11.56
1.16
11.56
PM Emissions (g/hp/hr)
10
2.50
25.00
2.50
25.00
Safety (fatalities/billion ton-mi)
3
0.00
0.00
0.00
0.00
Total Score
182.03
167.67
Rank
2
4
Retrofit locomotives
Natural gaswith LNG
powered ships
Selection Criteria Weight Rating
Score
Rating
Score
Upfront Cost ($)
4
0.00
0.00
9.47
37.88
Recurring Treatment Costs ($)
2
10.00
20.00
10.00
20.00
Fuel Cost Efficiency (ton mi/$)
25
2.46
61.54
10.00
250.00
Capacity (tons)
7
10.00
70.00
1.20
8.42
NOx Emissions (g/hp/hr)
10
1.16
11.56
0.00
0.00
PM Emissions (g/hp/hr)
10
2.50
25.00
0.00
0.00
Safety (fatalities/billion ton-mi)
3
0.00
0.00
9.91
29.74
Total Score
188.10
346.04
Rank
3
1

20