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National rail policy to support local industry, manufacturing

Transport Minister Fikile Mbalula

Transport Minister Fikile Mbalula

3rd June 2022

By: Schalk Burger

Creamer Media Senior Deputy Editor


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The National Rail Policy White Paper has a deliberate bias towards local manufacturing to ensure industrialisation and the local production of steel, railway lines, rolling stock and supplies, and the State and private sector operators should procure all supplies from South African manufacturers, Transport Minister Fikile Mbalula said this week.

"The obsolete state of much of our rail infrastructure and rolling stock, and the limitation imposed by narrow gauge tracks, as well as the underuse of the existing rail network, are some of the most notable challenges facing the sector," he stated.

The National Rail Policy provides an important opportunity to build and strengthen local manufacturing capacity in South Africa. The localisation strategy will be used to develop the industrial base for an active export strategy, particularly for exports to other African countries, and will also support the Steel Master Plan, the policy document states.

Local manufacturing can include steel of the right qualities and quantities, rail lines and supplies, including railway sleepers, rail joints, fastening systems and switches and control systems hardware and software, as well as rolling stock, including locomotives and engines, wagons and passenger coaches.

The State will take active steps to help develop the technology, skills and manufacturing capacity locally to ensure production of rail-related products increases gross domestic product, jobs and economic inclusivity, the White Paper states.

However, rail uses many systems and technologies that set it apart from other transport modes and industries. Therefore, skills development must rest to a large extent on sector initiatives.

The rail sector employs only 7% of the country's transport industry workforce and, while the resumption of investments, such as in the Gautrain, Transnet locomotives and Passenger Rail Agency of South Africa commuter trains, has re-established skills development channels, there remains a long way to go in terms of skills development, the policy paper states.

Meanwhile, the short-term interventions from now until 2024 will focus on developing the National Rail Bill and the sector master plan, although the Department of Transport will not wait for the finalisation of the master plan before implementing structural reforms in consultation with stakeholders, Mbalula said.

Additionally, short-term interventions will aim for the recovery of rail corridors by providing branch line concessions and third-party access.

In recognition of the important role private sector participation can play in bridging the investment gap, and improving operational and managerial capabilities, the department has established an implementation protocol to drive development and implementation of the plan, which has identified strategic branch lines to recover over the short- to medium term, Mbalula said.

"Agriculture and agricultural exports are a key industry and require that attention is focused on revitalising branch lines to support sustainability and growth in the industry. Agricultural exports over the past decade have achieved continuous annual growth in volumes and [export] revenue for South Africa and is a significant growth industry," he noted.

Rail's competitiveness will be maximised by investing in infrastructure, restoring capacity and investing in modern technology on the national rail network, as well as rehabilitating metropolitan commuter networks.

Investment in infrastructure will, over time, redress and rebalance the significant differences between rail and road asset value and market shares, the White Paper states.

Additionally, the National Rail Policy aims to position the rail sector to start making important contributions to national climate change commitments to 2050, as rail has the lowest energy consumption of all modes of transport for specific tasks, such as heavy haul and heavy intermodal.

Rail is well-positioned to substantially reduce the overall energy consumption by increasing its market share and shifting substantial traffic from high-energy consumption air and road transport to rail, the policy paper says.

Meanwhile, the department will also establish a working group comprising representatives of government, regulators, labour, the rail industry and State-owned enterprises to coordinate the critical implementation path, Mbalula said.

Further, the department is also engaging with Infrastructure South Africa to ensure rail projects are part of the Presidential Infrastructure Coordinating Commission’s focus and are an element of the broader infrastructure plan, he added.

"While enhancing the rail sector, we aim to do so in a way that also enhances the manufacturing industry, parts of which already serve the rail industry, and there is the potential to enhance this further to develop capacity in the country," Public Enterprises Minister Pravin Gordhan said.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online



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