The
NRP (2017) sets out the South African government’s intention to vertically
separate Transnet Freight Rail (TFR) into a rail infrastructure business. Post
the introduction of 3rd party operators, TFR’s mandate will be infrastructure
custodianship, with rail operations conducted by TFR as the dominant operator
together with 3rd Party operators to whom TFR will grant access to its
infrastructure.
The
NRP (2017) further propagates the establishment of a Single Transport Economic
Regulator to oversee and regulate access arrangements, train path allocation
and access fees, amongst other regulatory roles; and postulates that the
espoused policy regulations advocate a 3rd Party Access Position Paper.
Transnet
believes that enabling 3rd party access on a limited part of the network is the
first step towards liberalisation of the rail sector.
TFR
is currently a vertically integrated freight railway operator that provides
railway infrastructure logistics operations to customers. Transnet believes
that controlled and mandated 3rd Party Operator access to TFR’s rail network
infrastructure will contribute to the improvement of route density, increase
railway capacity, advance technological innovation, aid in providing the
funding required to increase investment in maintenance, and improve overall
railway efficiencies and service quality, which in turn should in turn reduce
the cost of logistics for the South African economy.
Under
the current model, Transnet retains full ownership of the railway network and
will not dispose of any network related assets. TFR is the Network Owner and
Manager of the entire network and is responsible for access to the
infrastructure (except where concessions are issued) and its maintenance.
As
the main operator, TFR retains Grandfather rights on all current slots operated
by TFR.
To
facilitate controlled access to its railway infrastructure network, TFR has
advanced its work towards the accounting separation of its infrastructure and
operations businesses. The accounting separation is crucial for TFR to better
understand the costs of providing and sustaining the infrastructure network and
to develop an effective and efficient network access pricing model that will
become the foundation of a commercial framework between (1) the infrastructure
manager (TFR) and rail operators (TFR Corridor Operators and/or other 3rd Party
Operators).
TFR
has conducted extensive research on Railway Reforms globally. It is evident
that no country has the same motivation for reform. Thus, the nuances of the
operating models and rules of play are not universal. Different global
operating models must therefore be thoroughly interrogated and adapted to the
needs of the South African transport and logistics system and regulatory
environment.
All
these considerations must be factored into the slot allocation and application
for access processes timetables, access pricing, contracting strategies and day
to day management approaches.
TFR
believes that sale of slots to 3rd Party Operators on the Container Corridor
will facilitate a learning process between all stakeholders. It will provide
key insights as inputs to the development of a robust Rail Reform regime that
will achieve the policy direction set out by Government for the benefit of the
South African Economy and its people.
The
container corridor plays a key role in the value chain of growth sectors namely
intermodal, manufacturing, automotive and agriculture sectors. For this reason, Transnet will prioritise
this corridor and other routes conveying intermodal, manufacturing, automotive
and agricultural goods to pilot third party access for 24 months in the period
between 2022 and 2024. The pilot project will allow Transnet the opportunity to
interrogate its cost structures and develop strategies for cost reduction while
leveraging private operators’ skills and technology innovation in the
management of similar value chain operations.
The
Container Corridor links the Port of Durban with the Gauteng economic hub
through an extensive rail network of roughly 714km. This connectivity enables
direct railing of strategic commodities from the Port of Durban to the inland
terminals and several private sidings in the Gauteng area and beyond. The route
from Pretoria to East London has capacity that can accommodate general cargo
and automotive traffic.
2. Maps
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| Figure 2: City Deep
to Durban/ Bethlehem – Durban Route Schematic
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Figure 3: Pretoria
to East London Route Schematic
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