STRUCTURAL change is poised to arrive on South Africa’s 1067mm gauge railway. Debate about the future of the 19756 km network has been heated since consultants Halcrow were called in last year, and speculation was exacerbated when Systra was asked to evaluate the proposals (RG 12.00 p789). Last month the government was due to decide on Spoornet’s future structure.
It seems that the government’s own view has changed little since last June, when we reported that there were firm proposals to put Spoornet’s two heavy haul corridors out to concession (RG 6.00 p349). Both the Sishen - Saldanha Orex iron ore line and the Richards Bay Coallink route could prove attractive to consortia that may include the mining companies. Spoornet is less keen on losing its successful heavy haul operations, preferring to integrate them with its general freight business, which is far more difficult to operate as a profitable entity. Handing lightly-used routes to private concessionaires is one option, and there is no doubt that costs could be cut and revenues increased by a more imaginative approach.
Spoornet’s views may carry more weight in view of the good performance turned in for the year to March 31. Net profit is expected to be R320m compared to R84m the previous year, a result that owes much to a programme of stringent cost-cutting introduced by Chief Executive Officer Zandile Jakavula. Management also took a strong line on corruption, and of officials named in 211 cases, 22 were dismissed and another 60 are likely to face disciplinary action. Parent company Transnet turned in a R780m profit last year, thanks largely to a restructuring of pension funds.
A long-overdue programme of investment in Spoornet is now getting under way, including motive power modernisation that could see 600 new high-power twin-unit electric locos ordered for delivery over the next 15 years (p237). The 237 km Kimberley - De Aar electrification receives R180m this year, with R206m earmarked for traction improvements, R254m for wagons, R420m for infrastructure upgrades and R40m for telecommunications. This at least should stop further deterioration of the network and lead to long term efficiencies.
There is general agreement that the luxury Blue Train will be offered to a private sector concessionaire, but the future of the remaining ordinary long-distance passenger services is less certain. They badly need investment if they are to survive at all. But handing them to a franchisee or private operator looks less likely following a government U-turn on the privatisation of the commuter services operated by South Africa Rail Commuter Corp.
Transport Minister Dullah Omar announced on March 6 that the government would only move ahead with privatisation of Metrorail when it was better prepared for the market, which is understood to be at least two years from now. This has further delayed the plans under which the commuter network would have been handed to concessionaires by 2003; tenders for a pilot scheme in the East Rand were due to be called early this year. The move irritated a number of companies who had invested in feasibility studies in the expectation of winning concessions.
The government’s decision to delay concessioning followed two recent episodes that sent shock waves through management. Frustrated commuters ransacked and burnt Pretoria station on February 19, after services were heavily delayed, and a stampede at Johannesburg Park station on March 2 caused seven deaths. Last year saw a spate of accidents and collisions on the Metrorail network, and it is quite clear that extensive modernisation and improvement is needed to make it attractive to the private sector.
SARCC gets around R350m a year for asset rehabilitation and R800m as operating subsidy, but this year it will receive an extra R100m for badly needed refurbishment of its rolling stock, which currently has an average age of 27 years.
Metrorail Chief Executive Honey Mateya supported the government’s decision to delay privatisation, saying that the company would use the two years to improve its services, so making them a more attractive proposition for future investors. n