SOUTH AFRICA: National railway and logistics group Transnet has established an interim rail infrastructure manager as part of plans to open the network to third party train operators in 2024.
Vertical separation forms part of the government’s National Rail Policy which aims to facilitate private sector investment, encourage greater use of rail and ensure the network is properly maintained.
The interim infrastructure manager established on November 1 will engage with an interim regulator, known as the Interim Rail Economic Regulatory Capacity, to develop plans and manage access until a permanent structure is in place.
The Department of Public Enterprises, the Department of Transport, IRERC and other stakeholders are to consult on a draft network statement, draft access agreement and a proposed tariff methodology, which will be published on April 1 2024 when applications for train paths will open.
Transnet Rail Infrastructure Manager will then be responsible for the network, while Transnet Freight Rail Operating Co will operate trains, competing with other operators both in South Africa and elsewhere in the region.
Third party operators will be able to request train paths, and if these are not being used by TFROC they will be available from May 2024.
A Transport Economic Regulator is to be established to ensure private operators have access; regulate pricing, compliance and penalties; and resolve any disputes between the infrastructure manager and operators.
The key commercial objectives for the infrastructure manager will be to maximise network utilisation, increase network density and generate revenue from access fees to fund network maintenance and expansion. It is also tasked with increasing rail’s market share by facilitating road to rail modal shift.
Funding for the infrastructure would be provided by the government to in line with investment plans, and access fees will be put towards the infrastructure manager’s operating costs.
On October 30 President Cyril Ramaphosa said ’we are working to reverse the legacy of the past era of corruption and mismanagement of our state-owned enterprises, which has left us with a persistent energy crisis and an inefficient ports and rail network’.
He said port, rail and electricity infrastructure would remain in public ownership, but he believed that introducing competition in operations would ‘create greater efficiency and reduce prices in the long term’.
He said ’reforms underway will propel economic growth in South Africa in the years to come, resulting in a stable supply of electricity, a working railway, and more jobs for all South Africans’.
- Transnet Freight Rail and Traxtion Sheltam announced on October 23 that they had agreed to cancel the conditional award of train paths between Kroonstad and East London on the Cape Corridor under a pilot process launched in 2022. They said the negotiations had been protracted owing to their complexity, and it would be beneficial to align with the wider reform programme.