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SA concessions

01 Aug 2000

AFTER four years of debate, South Africa's Transport Minister Dullah Omar announced on June 20 that the government was ready to start concessioning the operation of rail services administered by South Africa Rail Commuter Corp. A pilot project covering the East Rand network will be launched by the end of next year, although the exact form of the concession is not yet decided. The transport ministry is looking at both six or seven year operating concessions, and at 20 to 25 year terms in exchange for commitments to invest in new lines and renewal of the ageing EMU fleet.

Omar said the government intended to issue a white paper on rail policy in September, and would appoint a rail safety regulator next year. Legislation will also be tabled for the government to write off SARCC's historic debt, which currently totals R1·8bn.

Tenders for the East Rand pilot are to be called early in 2001, and the government hopes to have all routes concessioned from 2003 onwards. All services are currently operated for SARCC by Transnet subsidiary Metrorail, under a five-year contract awarded last year (MR99 p19). Metrorail CEO Honey Mateya has called in management consultants Mercer to help the company prepare for competitive bidding and falling subsidy. The company does not plan to bid for the pilot concession, but to use the result as a benchmark for its own restructuring.