Despite the current project affordability constraints, South Africa has made exponential improvements in progressing its public transport projects, says professional services firm KPMG.
“There is increased awareness of the absolute need for better public transport,” stresses KPMG infrastructure advisory head of global infrastructure major projects De Buys Scott, further highlighting that key project achievements include defining a proper strategy for public transport services.
He adds that this is what prompted the public and private sectors to initiate several public-transport infrastructure projects in recent years.
Key transport project milestones include the Passenger Rail Agency of South Africa’s (PRASA’s) R53-billion passenger fleet refurbishment and replacement programme, the programme to refurbish and replace PRASA’s ageing infrastructure, the completed and ongoing implementation of bus rapid transit (BRT) systems across the country, as well as the Gautrain’s extension-feasibility study to investigate expansion areas for the rapid passenger rail system.
The Gautrain and PRASA projects are key flagship projects in which KPMG is currently involved.
The company is assisting PRASA with the requirements and studies needed for the rolling stock, technical depot, station and testing facilities, and the Gautrain with its fleet-expansion project and extension- feasibility studies, as well as the sourcing of potential alternative revenue.
Scott believes that KPMG’s ability to assist with these projects was underscored by the company being awarded the 2015 Global Financial Adviser of the Year by infrastructure news and resource centre the Infrastructure Journal, in its yearly Global Awards for Excellence, which took place last month.
Scott maintains that the PRASA investment will play the most significant role in accommodating South Africans in public transport.
“PRASA’s passenger fleet refurbishment and replacement programme, when completed, will provide double the transport capacity at double the speed in a safe environment, thereby creating a material improvement in the system.”
The agency’s current fleet, which has reached the end of its design life capacity, will be replaced by new, faster and more reliable trains. These will be procured from France-based transport company and original- equipment manufacturer Alstom.
The first trains are expected to be delivered and commissioned by the second half of 2016. Up to 3 600 new train units will be deployed in the next ten years.
Scott says the refurbishment of the Metrorail system will also provide those with a higher living- standards measurement with an alternative to private car use, which might reduce the use of private- and public-vehicle road transport.
Scott further highlights the need for the public sector to seriously consider improving long-distance passenger train systems in South Africa.
“Systems like the Shosholoza Meyl – PRASA’s long-distance passenger rail services division – need to be investigated for a sustainable business model,” he suggests, adding that after defining the model, a feasibility study and procurement roll-out should follow.
The Shosholoza Meyl currently operates various train routes across South Africa, carrying about four-million passengers a year. Long-distance services are currently also supported by long-distance bus services for intercity and interprovince transport requirements.
Scott reiterates that public transport remains a significant catalyst “for changing mindsets and driving investment into more robust and enabling infrastructure for the country”, adding that the correct passenger and freight transport projects and programmes are currently under way in South Africa.
“However, we need to appreciate the time required for these projects to be properly bedded, and we need to be aware that they must be monitored, periodically evaluated and amended accordingly.”
These actions are mandatory, as several of the projects are greenfield investments for South Africa, he adds, further suggesting that South Africa can advance the development of its transport systems by drawing from other global initiatives – specifically those in other developing countries – in terms of what worked better and what lessons were learnt.
“As long as there is an open mind to other possibilities and efficiency enhancers, South Africa is on the right track,” he concludes.
The current state of affairs within South Africa’s transport sector, specifically the rail sector, has been informed by a variety of legislative and policy documents with various rail initiatives. These have been launched over the years by different stakeholders, often leading to uncoordinated objectives in the utilisation of rail infrastructure. As a result, the rail sector has existed in the absence of an over-arching rail policy.
South Africa is currently undergoing a regulatory ‘restructuring’ evidenced by the various policies and draft Bills which have been or are in the process of being promulgated.
Historically, road and rail based passenger services in South Africa were provided by the South African Transport Services (SATS), a state-owned entity. SATS was empowered to, among others control, manage, maintain and exploit certain transport services throughout South Africa, including rail. The Legal Succession to the South African Transport Services Act, No 9 of 1989 (Legal Succession Act) replaced the SATS dispensation.
As from April 1990 onwards, these functions became the responsibility of Transnet Limited and the South African Rail Commuter Corporation Limited (subsequently PRASA) with the former responsible for long-distance freight rail services and the latter taking care of commuter rail services. The overall effect is that rail components were transferred from SATS to different government entities and the rail sector has existed in the absence of a unified rail policy. This has ultimately led to the need to coordinate the rail policy framework in South Africa.
Recent Developments in Transport Policy and Regulation
The first significant policy promulgated for purposes of regulating the transport industry was the White Paper on National Transport Policy 1996 (White Paper). The White Paper, among other things, emphasises the importance of the rail sector for both freight and passenger transport. It focuses on the customer as the priority for public transport policy development and stipulates that issues of rail safety, affordability, quality and the provision of improved service levels should feature prominently in the policy formulation process. The White Paper is a key transport policy document in South Africa and provides guidance for all transport legislation and planning.
A further legislative development and recent means of restructuring the transport sector has been the introduction of the proposed Single Transport Economic Regulation Bill 2015 (STER Bill). The STER Bill seeks to, among others, consolidate the economic regulation of the transport sector within a single framework and policy through establishing the Single Transport Economic Regulator (STER) and the Transport Economic Council. It is envisaged that the STER’s functions will be executed independently of all operators and service providers in the transport sector. The STER will be directly accountable to the Minister of Transport, to whom it will be obliged to provide reports periodically on the status and performance of, among others, the railway sector.
The decision to establish a STER will integrate economic regulation for the rail, road, maritime and aviation sectors. Currently, at the time of drafting this alert, the Bill is in its final consultation phase with internal stakeholders, thereafter it will be published for public comment.
Various other strategies and policy documents have also been implemented with the aim of guiding the development of the transport sector (such as the National Freight Logistics Strategy, Moving South Africa, the National Rail Plan, the National Land Transport Strategic Framework and the Public Transport Strategy). Although, until recently, there existed no clear consolidated directive that examines how rail specifically will be regulated and taken forward in South Africa.
Developments in Policy and Regulation of Rail
From a policy perspective, while aspects relating to the regulation of the rail sector were captured in the White Paper, the Green Paper on National Rail Policy has been published on 22 September 2015 (Green Paper) for the rail sector. The Green Paper’s principal aim is to revitalise the rail industry and focus on how to make rail networks in South Africa fit for future generations, recognising the importance of sustainability and innovation. One of the salient features of the Green Paper is the proposal of various policy recommendations designed to address the key challenges faced by the rail industry.
In order to achieve a revitalisation of the rail industry and to re-position the rail sector as a preferred means of land transport, the Green Paper acknowledges that the current rail challenges have to first be resolved. The Green Paper highlights the global repositioning and ‘renaissance’ of railways in other countries, the lessons that can be learned as well as highlighting the current rail challenges for South Africa. The Green Paper therefore highlights the National Rail Policy’s (envisaged by the Green Paper) fundamentals and policy positions. Importantly, the recommended policy position on regulation recognises that multiple stakeholders pursuing different interests in the rail industry will require economic regulation to ensure the fairness and long-term sustainability of the rail sector. As such, a Ministerial Task Team was established to develop economic regulatory capacity for the rail sector.
Data will be collected from rail operators and analysed over the next two years to determine what economic regulatory interventions will be required for the rail sector. The forthcoming STER will, as a permanent initiative, regulate the rail sector specifically as a subdivision of regulating all transport types. Importantly, the Green Paper states that the Railway Safety Regulator and the STER will work closely together through a memorandum of understanding as their responsibilities will be separate.
Lastly, the Green Paper alludes to the way forward for the South Africa rail sector and proceeds to outline the recommended policy positions to be discussed and debated during the Green and White paper consultation phases. Subsequent to such stakeholder consultation, the White Paper will be submitted for approval and the Department of Transport will commence with developing the National Rail Act, thereby making some of the policy positions legally binding on the rail sector.
The South African government is currently moving towards major rail recapitalisation and is simultaneously undergoing a policy and regulatory development process. The introduction of the Green Paper could potentially lead to the fomalisation of the government’s position on policy and will provide and overarching governance framework for the rail sector. The successful implementation of the National Rail Policy is crucial to ensuring the revitalisation and resurgence of the South African railway sector.
Johannesburg – South African railways officials imported brand new locomotives from Europe worth hundreds of millions of rand despite explicit warnings that the trains are not suited for local rail lines.
In what may be the country’s largest and most expensive recent tender blunder the Passenger Rail Agency of South Africa (Prasa) has to date received thirteen new diesel locomotives that are too high for the long distance routes they were intended for.
Senior railways engineers and sources with firsthand knowledge of the issue told Rapport Prasa had been warned that the new diesel locomotives it ordered from Spanish manufacturer Vossloh España are too tall for local use.
The locomotives exceed the height restrictions for diesel locomotives on the long distance lines Prasa intended using them on.
The thirteen Afro 4000 diesel locomotives that have so far been delivered to Prasa are worth R600 million and form part of a larger R3.5 billion order for 70 new locomotives.
The locomotives have a roof height of 4 264mm while the maximum height for diesel locomotives may not exceed 3 965mm, senior rail engineers with firsthand knowledge of the saga told Rapport.
Prasa intended using the locomotives for its long distance Shosholoza Meyl passenger service.
The locomotives were revealed to the media at an event in Cape Town in January, where Prasa and transport minister Dipuo Peters stated the locomotives would undergo three months’ testing before entering operations in April.
“Prasa was warned the locomotives were too high even before they started arriving in the country. They carried on with the contract despite our warnings,” said a senior Transnet engineer.
Another Transnet engineer said Transnet initially didn’t want Prasa to move the locomotives even on the short track distance between the Cape Town docks and the nearby Salt River train depot.
The engineers say the locomotives could damage the overhead electrical cables on the country’s rail lines.
Tender regulations flouted
The auditor general last year announced Prasa had flouted its own tender regulations when it awarded the contract to Swifambo Rail Leasing.
The South African Institute of Electrical Engineers (SAIEE) confirmed it was aware of the height issue and that it was working on finding “technical solutions”.
Transnet and Prasa “engage on a frequent basis on any matter that affects us in whatsoever way through the designated channels and forums established between the two companies,” said Transnet Freight Rail spokesperson Sandile Simelane.
“Transnet Freight Rail is therefore not at liberty to engage Prasa through the media,” he added.
Moffet Mofokeng, Prasa’s spokesperson, did not respond to the newspaper’s queries beyond stating in an e-mail that “you are at liberty to write what you want”.