With South Africa’s reliance on commodity exports, which can be handled only in large volumes by rail, law firm Norton Rose Fulbright Africa director and transport head Malcolm Hartwell says rail is a more efficient and environment-friendly way of transporting goods, making it crucial that rail infrastructure is functional and upgraded.
The Department of Transport (DoT) drafted a White Paper on National Rail Policy (NRP) in 2017 and Minister Fikile Mbalula released the draft in May this year. The draft recognises problems with South Africa’s rail infrastructure and commits government to solving these by recognising that functional and upgraded rail infrastructure requires private-sector involvement. The draft has now been approved, with minor changes by Cabinet, and published.
Hartwell explains that the NRP creates an opportunity to solve rail infrastructure issues by splitting railway company Transnet’s rail division into an infrastructure and operating unit.
It also calls for the mining sector to take responsibility for dedicated heavy haul lines, such as the Northern Cape-Saldanha iron ore line and the Mpumalanga-Richards Bay coal line.
In terms of passenger transport, the NRP recognises that mass transportation system Gautrain is a privately operated, profitable network and, although passenger transport requires subsidisation, Hartwell says that this is best done through private-sector operators, rather than government and municipalities attempting to run a sophisticated passenger network.
“This is illustrated by the draft policy concluding that one option is to do nothing, but this would result in South Africa’s being left behind. That option has been removed from the final NRP, indicating that it is no longer on the table.”
With regard to South Africa’s decarbonisation goals, Hartwell says shifting towards standard-gauge is necessary, as stipulated in the NRP, because it would allow for heavier and faster trains that are more carbon efficient.
Standard gauge will need to be adopted, along with appropriate
economical engines for the trains, to aid South Africa’s decarbonisation initiatives.
The NRP also mentions the potential for job creation accompanying rail revitalisation that could provide socioeconomic benefits.
“The infrastructure construction programme and the need for new rolling stock will create employment, as will a more efficient rail network through private and public operators.”
Hartwell agrees with the NRP’s general analysis of the state of South Africa’s rail and passenger network, stating that the rail network has become increasingly inefficient and expensive, with some infrastructure having collapsed completely.
The policy states that these problems arose because government accepted the De Villiers report in 1986, which stated that it would be inappropriate to commit resources to developing rail infrastructure.
However, Hartwell notes that infrastructure problems are particularly prominent in the passenger rail sector, owing to theft and vandalism and the lack of investment by railway company Transnet in relevant infrastructure.
While the NRP acknowledges the issues with rail infrastructure, he says the implementation of the policies outlined in the document will be affected by issues facing all State-owned enterprises.
These issues, according to Hartwell, include a lack of capacity, a lack of responsibility and the need to compete for government funding for relevant social projects, including all the primary services government should provide for citizens in terms of health, education and housing.
To tackle these issues effectively, the DoT will have to drive this policy aggressively and actively seek help from the private sector, locally and internationally, to obtain funding.
“Funding is a critical issue and government’s current single biggest challenge,” adds Hartwell.
Although the aim is to implement the NRP in the next 10 to 15 years, this depends on whether the DoT establishes the necessary funds.
He adds that the DoT is competing with other departments in getting Parliament’s attention to pass other legislation to realise the policy set out in the NRP.
However, the policy is beneficial, as it will create employment at a production and operational level and fulfil the needs of the private sector and communities that would rely on rail. The private sector generates most of the revenue the government relies on and an efficient rail network would, consequently, improve global competitiveness, says Hartwell.
Moreover, he says the NRP acknowledges the challenges without necessarily accepting the responsibility of the current government for the current state of rail infrastructure.
“In passing, it doesn’t deal much with our importance as a gateway into Africa and the nascent African common union project, but if we do not invest in our own infrastructure, we will lose the massive institutional advantages we already hold insofar as being a gateway into Africa from a transport, finance and insurance perspective.
“From Norton Rose Fulbright’s perspective, the policy is appropriate, as it breaks up Transnet’s monopoly; invites private-sector funding and participation; acknowledges that the private sector, such as in the mining industry, is better able to operate the services they need; and is in line with practices in other countries that have successful rail infrastructure. If the NRP is implemented, the future of South African rail is bright,” concludes Hartwell.