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Interim Infrastructure Manager set up to facilitate initial private access to rail network

Rail lines

Photo by Creamer Media

2nd November 2023

By: Terence Creamer

Creamer Media Editor

     

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Transnet has confirmed the establishment of an interim rail Infrastructure Manager, which will oversee the initial process of ensuring that the rail network is opened to private train operating companies (TOCs) from April 2024.

The network has hitherto been monopolised by State-owned Transnet Freight Rail, which is in the process of being vertically separated into the Transnet Rail Infrastructure Manager (TRIM) and the Transnet Freight Rail Operating Company (TFROC).

Acting Transnet CEO Michelle Phillips said in a statement that the interim Infrastructure Manager would carry out all required activities to facilitate third-party access ahead of the creation of a permanent operating division, or TRIM.

In unveiling a recovery plan for the embattled group in late October, Transnet said the TRIM would manage, operate and maintain the rail network infrastructure and would initially be led by Bessie Mabunda.

TFROC, which would be led by Russell Baatjies, would remain the dominant TOC on the network when it was opened to third-party operators next year, but would begin having to compete with private operators for slots on the network.

Phillips said the interim Infrastructure Manager would engage with the Interim Rail Economic Regulator Capacity (IRERC) and manage access until a permanent operating division was in place.

It would also lead consultations with the Department of Public Enterprises, the Department of Transport, the IRERC and other stakeholders on the draft network statement, the draft access agreement and proposed tariff methodology.

“On 1 April 2024, the interim Infrastructure Manager will publish the final draft network statement, conditions of access, and the access tariff; and TOCs applications for slots will commence.

“If a requested slot is available (not run by TFROC), that slot can be provided by May 2024 for trains to run, provided all the necessary conditions and approvals are met,” Transnet said in a statement.

The separation was in line the White Paper on National Rail Policy, which envisaged structural reforms intended to facilitate private sector investment and more efficient use of the rail system, the performance of which had declined markedly in recent years.

Access would ultimately be regulated by the yet-to-be established Transport Economic Regulator, which would set prices for the sale of train slots and regulate access.

The reform was also being aligned with the Freight Logistics Roadmap, which was close to being finalised, which Finance Minister Enoch Godongwana said would have to be reflected in Transnet’s corporate and operational plans if the group aimed to secure any support from the fiscus for its turnaround plan.

“The Roadmap sets out a clear path for enhancing efficiencies, facilitating the introduction of competition and leveraging the financial and technical support of the private sector,” the Minister said in a recent address to lawmakers.

Transnet has reportedly requested relief covering R61-billion of its R130-billion debt, as well as a R47-billion equity injection, but Godongwana indicated that the National Treasury would not step in until there had been further engagements and Transnet could prove that it was doing its bit to improve efficiencies and cuts costs.

The separation between rail operation and infrastructure was in line with the Economic Regulation of Transport Bill and the National Rail Policy and would differ from the National Ports Act in that there would be no ‘grandfather rights’ for TFROC.

Under such a scenario, the rail system would be expected to transition to a free open system of allocated train-access slots.

Separately, Transnet was also pressing ahead with a plan to establish a rail rolling stock leasing company by way of a private sector partnership.

The group had rolling stock that it no longer used, and which could be repurposed to help facilitate third-party access.

The absence of rolling stock for lease emerged as a key constraint for companies that expressed an initial appetite for the now terminated slot-sale process.

Last year, Transnet sought to sell 16 slots to private operators on its container and Cape corridors through a competitive process, but only Traxtion Sheltam was conditionally awarded slots between Kroonstad and East London on the Cape Corridor.

That award was terminated, however, in anticipation of the new approach to third-party access model, the initial introduction of which was the responsibility of the interim Infrastructure Manager.

Edited by Creamer Media Reporter

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