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Africa|Container|Efficiency|Freight|Infrastructure|rail|Road|Rolling Stock|rolling-stock|Safety|Service|Sustainable|Transnet|Environmental|Infrastructure|Operations
Africa|Container|Efficiency|Freight|Infrastructure|rail|Road|Rolling Stock|rolling-stock|Safety|Service|Sustainable|Transnet|Environmental|Infrastructure|Operations
africa|container|efficiency|freight|infrastructure|rail|road|rolling-stock|rolling stock|safety|service|sustainable|transnet|environmental|infrastructure|operations

Light from the tunnel?

24th November 2023

By: Terence Creamer

Creamer Media Editor

     

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Reform progress in South Africa rarely moves in a straight line from A to B, with the stop/start nature of the country’s electricity reform being a case in point.

Nevertheless, there is a flickering of light beginning to emanate from the long and dark tunnel that the declining freight railway sector has been in for decades – and, at long last, that light may soon be from an oncoming train!

Moves to introduce new entrants onto the rail network have had numerous false starts and have also hitherto always sought to ensure that the network remained monopolised by the State-owned incumbent, Transnet Freight Rail (TFR).

There have, for instance, been several mostly unsuccessful attempts at concessioning branch lines. Failures here arose largely because the volumes were so low that it was almost impossible to attract the operators and investment required to make the service economically sustainable.

Then, there was the more recent, and even more unsuccessful, attempt by TFR in 2022 to sell 16 slots to private operators on its container and Cape corridors. From the outset, potential participants warned that the two-year slot contracts on offer were simply too short to ensure that returns could be made, particularly given the limited rolling-stock leasing options.

Although one conditional award was announced, TFR and Traxtion Sheltam ultimately jointly agreed to terminate the proposed transaction, which ran into several difficulties and was also overtaken by policy and regulatory developments that unfolded in parallel.

Likewise, progress has been glacial on the proposed 20-year operating lease offer for Transnet’s underperforming and crime-ridden container corridor between Durban and Johannesburg. However, there are indications that Transnet is still planning to pursue the scheme.

So, where is this so-called light at the end of the tunnel coming from?

It arises primarily from recent confirmation by Transnet that an interim rail Infrastructure Manager has been established as a precursor to the full vertical separation of infrastructure operations from train operations.

Ultimately, TFR itself is being prepared to be restructured into two entities called the Transnet Rail Infrastructure Manager, or TRIM, and the Transnet Freight Rail Operating Company, or TFROC – entities that will operate in a sector that will eventually be regulated by an independent body, but initially by the so-called Interim Rail Economic Regulator Capacity.

The interim Infrastructure Manager, which will evolve into the TRIM, has been mandated to carry out the activities required to facilitate third-party access as from April, while TFROC will, over time, face competition from private train operating companies.

There will, no doubt, be teething problems and growing pains. Nevertheless, the move is not only long overdue but could also provide the impetus required to begin shifting some of the freight that should for safety, efficiency and environmental reasons be transported primarily by rail.

It’s going to be a long haul, however, as the road freight sector has shown incredible agility in keeping the country moving amid what can only be described as a precipitous rail decline in recent years.

Edited by Terence Creamer
Creamer Media Editor

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