THE African Rail Association (ARIA) has urged President Ramaphosa to keep his promise of implementing third party access to private operators on South Africa’s rail network.
“The government’s proposed structural reforms to the rail sector, which will see private rail operators operating on the country’s core rail network, will breathe new life into an industry which is currently under severe pressure,” said association CEO Mesela Nhlapo.
“The private sector wants to invest in new train sets, and we are ready to work with government on this. It is up to the Government to follow through on their 2020 commitment.”
Nhlapo said the opening up of the country’s rail network to private, fee-paying operators would also create cost-effective gateways into Africa for South African goods through the African Continental Free Trade Agreement (AfCFTA).
“Just as trade across Europe has thrived through the European Union, Africa is expected to benefit similarly, but that will not happen without efficient and interoperated rail systems.”
She said multiple operators would generate additional revenues for Transnet that would be invested back into catch-up maintenance so that South Africa’s rail network could again be source of global competitive advantage.
Nhlapo cited a Business Unity South Africa (BUSA) report that Transnet announced an accounting exercise into the costing of its network to work out pricing for fee-paying private operator slots on the network by the end of March. In addition, a pilot project on third-party access is planned to take place by the end of 2022.
“The value of this move to the state and Transnet would be significant. Right now, we have a massive network with excess capacity which could unlock significant incremental cash flows through access fees from private operators. In addition, the existing infrastructure requires no extra state investment, as the capacity is already there,” she said.
“In addition, our local supply base within the manufacturing environment will see a rapid turnaround as demand starts to increase for rolling stock.”
Early projections by ARIA suggest that additional parties using the rail network will create numerous upstream jobs by enabling industry to become internationally competitive.
Similarly, rail corridors into Africa would create cost-effective gateways to take South African goods into these markets through AfCFTA.
