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3rd Party Access - Overview
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TRANSNET COMMENCES WITH SALE OF SLOTS TO THIRD-PARTY OPERATORS

1.         Slot Sale Overview

South Africa’s Draft White Paper on National Rail Policy (NRP, 2017) positions access to Third (3rd) Party Operators to the TFR railway infrastructure network as the crux of South African rail reform.


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

​ Figure 3: Pretoria to East London Route Schematic