The African Rail Industry Association (ARIA) said yesterday the future of South Africa's rail industry hinged on the successful implementation of rail reform, which aims to address both the current shortage of trains and the need for improvements in network infrastructure.
“Rail reform, as outlined in the National Rail Policy, is fundamentally about fostering investment from the private sector,” said ARIA CEO, Mesela Nhlapo.
“We face two significant challenges: the shortage of trains and the quality of our network. These issues must be tackled concurrently.”
While the policy framework is in place, private sector participation in the rail network is contingent upon investment.
“To meet the demand for rail freight capacity in South Africa, we require an investment of over R100 billion in trainsets,” Nhlapo emphasised.
However, for such significant investments to materialise, there must be clarity and certainty around the terms and conditions of network access.
“Our members are prepared to invest, but they need assurance that their investments will be viable. Until the final terms of access are established, developing a solid business case remains challenging.”
ARIA said the finalisation of Transnet's Network Statement, expected by the end of September, is a crucial step toward establishing a competitive rail system. This will include the appointment of an independent infrastructure manager to oversee access to the country's rail network.
“The presence of a regulator provides a critical avenue for businesses to engage and address any concerns in the Network Statement, ensuring that third-party access is viable for private operators in South Africa,” Nhlapo noted.
The establishment of a regulator to manage the relationship between Transnet and private operators marks a significant advancement toward the long-term success of private rail operations within the South African network.
“Third-party access is essential for attracting private investment and driving growth within the rail sector. Ensuring that the Network Statement supports this objective is vital,” she added.
“With an estimated 4.5% GDP loss (GAIN Institute) due to unfulfilled rail freight demand, there is a compelling case for ensuring this process is executed effectively.” - BR Reporter