The draft White Paper on National Rail Policy is expected to be completed by the end of this year, with the legislative process only expected to begin post the 2019 national elections.
The promulgation of the draft White Paper will be the first time in which government will be giving the South African rail sector policy direction in about 150 years, instead of the other way around, Department of Transport rail deputy director-general Jan-David de Villiers told delegates attending the Transport Forum, in Johannesburg, on Thursday.
With railways no longer able to compete effectively against other transport nodes, and not being able to achieve its proper share of the national freight and passenger transport takes, De Villiers lamented that the South African rail sector is “uncompetitive and operationally challenged”.
The National Rail Policy is hoping to change this, he stated.
The move to rail holds several opportunities, De Villiers pointed out, including reducing congestion and safety on the country’s roads. It also has environmental and economic benefits.
Policy intervention through the National Rail Policy will primarily focus on increasing investment in rail.
This primary intervention will rebalance rail sector investment, he added, pointing out that government intends to focus on investing R170-billion into the sector over the next ten years.
The rationale behind this decision, De Villiers elaborated, is to position rail as South Africa’s transport backbone by 2050 and to support the UN’s commitment to greenhouse-gas emissions reduction.
South African rail, he said, will offer the safest, most economically, environmentally, financially and socially viable logistics and/or mobility solution.
In terms of freight rail, De Villiers noted that current industry players – such as Transnet Freight Rail – only address a fraction of the freight rail addressable market.
The classic remedy to this, he pointed out, would be to allow on-rail competition, which would open an opportunity to third-party operators by way of opening rail freight operations to private sector participation.
“Note that on-rail competition is a palliative that recognises only service quality, quantity and pricing, as well as operational efficiency, but cannot address narrow gauge rail’s inherent competitiveness,” De Villiers warned, adding that, therefore, on-rail competition cannot be an alternative or substitute for the primary investment-led intervention in a standard-gauge high-performance national rail network.
Meanwhile, the introduction of competition for services that the Passenger Rail Agency of South Africa (PRASA) offers, maximises the value of services delivered to passengers and minimises the economic resources that it uses to do so.
“The introduction of competition for services that PRASA renders may be considered but direct on-rail competition in core urban commuter markets is generally accepted as unworkable,” De Villiers lamented.
Assigning urban rail to transport authorities will expose it to a natural competition for funding from other nodes, while also sharpening the industry’s sensitivity to service quality and quantity perception, he highlighted.
“The White Paper is very clear on the evolution of the rail function in metropolitan areas, and the evolving capacity. We [the rail industry] will not evolve if there is no increased capacity,” De Villiers noted.
However, increasing capacity will be a long process, and may only occur seven years after the National Rail Policy has been promulgated, he lamented.
“The National Rail Policy will position rail robustly for a bright future, [but] the situation will not improve by itself. The do-nothing option will leave South Africa’s logistics and mobility based on roads and fossil fuels, except for urban rail, by 2050, while the rest of the world enjoys low-cost renewable energy with rail transport as the backbone,” he concluded.