Transport minister Barbara Creecy plans to table a new Rail Bill later this year that will entrench far-reaching reforms to open up the sector to private participation in legislation and provide certainty for investors.
“To give certainty on the future of the reform programme it’s very important to enshrine that programme in law ... Interestingly there isn’t actually a bill that deals with all aspects of rail in our country so this will be the first framing legislation,” she told a PSG Think Big webinar on Tuesday.
“Legislation is always important because it gives ... more definite legal certainty than just a policy that has been adopted by cabinet and could be changed by a future cabinet.”
Over the past couple of years, the cabinet has approved a new rail policy for SA as well as a new freight logistics roadmap. These have opened the way to bringing new private third-party train operators into the rail freight network, as well as to enable private players to come in to help upgrade and modernise SA’s rail infrastructure.
Creecy said Transnet would soon appoint third-party operators on its key rail corridors. Her department had been “overwhelmed” by the appetite shown by the market in response to her request for information on private participation in the infrastructure of rail corridors and ports.
The request for information closed at the end of May with 163 submissions received that showed interest in all five key rail corridors, as well in the ports, she said.
“I’m really pleased with the interest ... the key thing we wanted to ensure is that proposals are responsive, because in the past we have seen situations where proposals put out by state-owned entities have not been appetising and interesting to the market,” Creecy said.
The private-sector participation unit in the department of transport was working through the submissions so that it could use those to shape requests for proposals. However, she said that even in the best-case scenario, if calls for proposals were issued by the end of this year, it would take two years to reach financial close, which is why Transnet applied to the National Treasury’s budget facility for infrastructure for financing to fix the lines in the short term.
Creecy has targeted to lift freight rail volumes to 250-million tonnes per annum, from their 149-million tonnes low, and Transnet is on track to deliver 161-million tonnes for its latest financial year and is targeting 180-million tonnes for the next year. Port productivity had made slower progress towards the target of 30 gross crane moves per hour (the global benchmark for the speed at which one loads and unloads ships), but that was expected to improve thanks to the delivery of new cranes and other equipment.
Creecy has set ambitious targets to restore SA’s passenger rail network, which she wants to see lifted to 600-million passenger journeys a year by 2030 from 77-million now. Most of the major lines have now been restored and Prasa has taken delivery of new SA-made trains, but the issue is the signalling. Budget documents show the Treasury made a substantial allocation to Prasa to invest in signalling.
Creecy, whose department oversees 16 public entities, has also set targets for Airports Company SA to lift its passenger and air freight traffic, with plans to build a new air freight terminal at OR Tambo International Airport.
Transnet’s debt structure continues to be unsustainable, with Moody’s recently downgrading its rating on concerns Transnet would not be able to meet its financial obligations. The government recently approved a R51bn guarantee facility for Transnet and a further unnamed guarantee amount to enable it to repay maturing debt and meet its obligations.
A national rail master plan will be published for consultation later this year.
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