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Apr 03, 2009

New passenger rail agency seeks to crowd in private investors

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The leadership at South Africa’s newest State-owned enterprise, the Passenger Rail Agency of South Africa (Prasa), claims it is keen to find ways to partner with private investors on some of its commuter rail and bus projects as it prepares to invest R25-billion over the next three years.

The utility will combine the already merged assets and employees of the South African Rail Commuter Corporation and Metrorail, with those of Shosoloza Meyl and Autopax, the long-distance rail and intercity bus compa- nies respectively, which currently fall under the aegis of freight logistics group Transnet.

Property management and development company Intersite would also be consolidated into the 13 000-plus employee entity to manage, maintain and upgrade stations, as well as to pursue projects that could extract value from the group’s substantial property assets.

The sale agreements between Prasa and Transnet for the transfer of Shosoloza Meyl and Autopax into Prasa should be concluded soon.

Chairperson Sfiso Buthelezi says that the preconsolidated organisation had already materially increased the scale and pace of its investment into the upgrading of both infrastructure and rolling stock.

He says it will spend R5-billion in 2009/10 and that over the three-year medium-term expenditure framework horizon, a total of R25-billion would be invested to arrest a back- log created by decades of underinvestment.

However, CEO Lucky Montana insists that this catch-up expenditure will be insufficient to ensure that the utility is able to increase its capacity much beyond the 643-million passenger journeys currently being achieved.

To move to a different level of service delivery, new infrastructure, technology and systems would be required, including high-speed trains to link into the emerging Gautrain rapid-rail network and a possible light-rail investment programme.

Planning was already under way for the proposed develop- ment of the so-called Moloto rail corridor, running between Tshwane and Mpumalanga, which would cost R9,7-billion.

In addition, initial investigations were being pursued in the creation of a high-speed train between Johannesburg and Durban.

Buthelezi indicates that Prasa is keen to pursue these developments in partnership with the private sector, but both he and Montana stress that the service will only be economically viable and remain affordable if government were to make greater subsidy contributions.

Speaking at the launch event in March, Transport Minister Jeff Radebe stressed that the development of Prasa was central to government’s plan to place rail back at the heart of South Africa’s public transport system.

But he also stressed that the strategy was premised on greater integration between buses, taxis and rail, and outlined his vision for a 24-hour, single-ticket system across modes and metropolitan and provincial boundaries.

Radebe lauded progress that had been made in stabilising the utility, which he said had been on the brink of collapse in 2004.

Since 2006, some 1 400 coaches had been refurbished at a cost of R4-billion; over 2 000 railway police had been recruited and deployed, which had helped to lower rail- related crime by nearly 40% in the last quarter; and R300-million had been set aside for immediate station refurbishments, which would be completed ahead of the 2010 FIFA World Cup.

Edited by: Martin Zhuwakinyu
Creamer Media Senior Deputy Editor
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