National Rail Policy Green Paper

NATIONAL RAIL POLICY
Green Paper
2015
Green Paper
August 2015
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Director: Rail Policy and Strategy Development

Ms. Hlengiwe Sayd
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Green Paper
2015
AUGUST 2015 National Rail Policy | Green Paper
Table of Contents
List of Figures .................................................................................................................................................................i
List of Tables...................................................................................................................................................................i
Abbreviations .................................................................................................................................................................i
Definitions ...................................................................................................................................................................... ii
Foreword ....................................................................................................................................................................... 1
Executive Summary...................................................................................................................................................... 2
Chapter 1 ...................................................................................................................................................................... 4
Introduction
1.1. Background....................................................................................................................................................... 5
1.2. Situational Analysis........................................................................................................................................... 6
1.2.1. Historical Overview of Rail.................................................................................................................................. 6
1.2.1.1. The Early Development Phase ........................................................................................................ 6
1.2.1.2. The South African Railways & Harbours Phase................................................................................ 6
1.2.1.3. The Pre-revitalisation Phase............................................................................................................. 8
1.2.2. The South African Rail Industry and Structure.................................................................................................... 8
1.2.2.1. Transnet SOC Ltd............................................................................................................................ 9
1.2.2.2. Passenger Rail Agency of South Africa.......................................................................................... 10
1.2.2.3. Gautrain Management Agency....................................................................................................... 10
1.2.2.4. Private Operators........................................................................................................................... 10
1.2.2.5. The Supply Industry....................................................................................................................... 11
1.2.3. Rail’s Role in South African Socio-Economic Development............................................................................... 11
1.2.3.1. Freight Rail..................................................................................................................................... 11
1.2.3.2. Passenger Rail............................................................................................................................... 12
1.2.3.3. Liberating Rail................................................................................................................................ 13
1.3. Policy, Legislation and Strategies................................................................................................................... 13
1.3.1. The Status Quo................................................................................................................................................ 13
1.3.2. Constitution of the Republic of South Africa..................................................................................................... 13
1.3.3. White Paper on National Transport Policy......................................................................................................... 13
1.3.4. Southern African Development Community Protocol on Transport................................................................... 14
1.3.5. Moving South Africa......................................................................................................................................... 14
1.3.6. National Environmental Management Act......................................................................................................... 14
1.3.7. National Railway Safety Regulator Act.............................................................................................................. 14
1.3.8. National Freight Logistics Strategy................................................................................................................... 15
1.3.9. National Rail Plan............................................................................................................................................. 15
1.3.10. National Land Transport Strategic Framework.................................................................................................. 15
1.3.11. Public Transport Strategy................................................................................................................................. 15
1.3.12. Legal Succession to the South African Transport Services Amendment Act..................................................... 16
1.3.13. National Land Transport Act ............................................................................................................................. 16
1.3.14. Industrial Policy Action Plan 2014/15–2016/17................................................................................................ 16
1.3.15. National Development Plan 2030..................................................................................................................... 17
1.3.16. The New Growth Path for South Africa............................................................................................................. 17
Chapter 2 .................................................................................................................................................................... 18
Global Experience and South Africa’s Rail Challenges
National Rail Policy | Green Paper AUGUST 2015
2.1. Global Experience........................................................................................................................................... 19

2.1.1. The Railway Renaissance................................................................................................................................. 19.
2.1.1.1. Introduction................................................................................................................................... 19
2.1.1.1.1. Rail’s First Rise and Fall........................................................................................... 19
2.1.1.1.2. Emergence of New Growth Curves and Institutional Arrangements......................... 19
2.1.1.1.3. Implications for Rail - Road Modal Split................................................................... 20
2.1.1.2. Inherent Railway Competitiveness.................................................................................................. 20.
2.1.1.2.1. Three Perspectives on Competition and Competitiveness........................................ 20
2.1.1.2.2. Inherent Railway Competitiveness and Rail’s Genetic Technologies.......................... 21
2.1.1.2.3. One Potentially Weak Market Space........................................................................ 22
2.1.1.2.4. A Frugal Transport Mode for an Energy-scarce Future............................................. 22
2.1.1.2.5. Significant Renaissance Events............................................................................... 23
2.1.1.3. Selecting a Frame of Reference..................................................................................................... 25
2.1.1.4. Institutional Arrangements.............................................................................................................. 26
2.1.1.4.1. A Need for Economic Regulation............................................................................. 26
2.1.1.4.2. Governance Models - Line Haul Railways................................................................ 26
2.1.1.4.3. Governance Models - Urban Rail............................................................................. 28
2.1.1.5. Generic Outcomes......................................................................................................................... 29
2.1.2. Examples of Realising Railway Renaissance..................................................................................................... 29
2.1.2.1. The Value of Comparisons............................................................................................................. 29
2.1.2.2. Two Development Streams............................................................................................................ 29
2.1.2.3. Developed Countries..................................................................................................................... 30
2.1.2.4. Developing Countries..................................................................................................................... 31
2.1.2.4.1. Brazil....................................................................................................................... 31
2.1.2.4.2. Russia..................................................................................................................... 32
2.1.2.4.3. India........................................................................................................................ 33
2.1.2.4.4. China...................................................................................................................... 34
2.1.2.5. The Essential Challenge................................................................................................................. 35
2.1.3. High-level Intervention Design.......................................................................................................................... 36
2.1.3.1. Competition and Reform-led Interventions..................................................................................... 36
2.1.3.2. Investment and Investment-led Interventions................................................................................. 37
2.1.4. Regulation ...................................................................................................................................................... 37
2.1.4.1. Forms of Railway Economic Regulation......................................................................................... 37
2.1.4.2. Examples of the Presence of Railway Economic Regulation........................................................... 37
2.1.4.3. Examples of the Absence of Railway Economic Regulation............................................................ 38
2.2. Developments in Africa................................................................................................................................... 39
2.3. Rail Challenges for South Africa..................................................................................................................... 40
2.3.1. Underutilised Infrastructure Assets................................................................................................................... 40
2.3.2. Over-age Equipment........................................................................................................................................ 41
2.3.3. Capitalised Maintenance.................................................................................................................................. 43
2.3.4. Low Performance............................................................................................................................................. 43
2.3.5. The Status Quo is Unsustainable...................................................................................................................... 45
2.3.6. Branch Lines.................................................................................................................................................... 47
2.3.7. Institutional Arrangements................................................................................................................................ 48
2.3.8. Rail Transport Planning..................................................................................................................................... 49
2.3.9. Skills Development and Job Creation............................................................................................................... 50
2.3.10. Economic Regulation....................................................................................................................................... 51
2.3.11. Rail Safety Management.................................................................................................................................. 52

2.3.12. Security Management...................................................................................................................................... 52
2.3.13. Funding ...................................................................................................................................................... 53
2.4. Lessons Learned............................................................................................................................................. 54
Chapter 3 .................................................................................................................................................................... 56
National Rail Policy Fundamentals and Policy Positions
3.1. Policy Vision and Mission................................................................................................................................ 57
3.2. Strategic Policy Objectives............................................................................................................................. 57
3.3. Policy Principles.............................................................................................................................................. 57
3.4. Policy Statement............................................................................................................................................. 58
3.5. Recommended Policy Positions..................................................................................................................... 59
3.5.1. Recommended Policy Position - Investment.................................................................................................... 59
3.5.1.1. Infrastructure and Track Gauge...................................................................................................... 60
3.5.1.1.1. The Plan and its Justification................................................................................... 60
3.5.1.1.2. A New High Performance Network.......................................................................... 60
3.5.1.1.3. The Position of Urban Rail and the Narrow Gauge Network..................................... 61
3.5.1.1.4. Cross-impact Between Interventions....................................................................... 61
3.5.1.1.5. Timing..................................................................................................................... 62
3.5.1.2. Rolling Stock and Technology........................................................................................................ 62
3.5.2. Recommended Policy Position - Funding and Private Sector Participation....................................................... 63
3.5.2.1. Branch lines................................................................................................................................... 64
3.5.3. Recommended Policy Position - Interconnectivity with Neighbouring Countries and the rest of Africa.............. 65
3.5.4. Recommended Policy Position - Institutional Arrangements............................................................................. 66
3.5.4.1. The Role of National Government.................................................................................................. 66
3.5.4.2. The Role of Provincial Governments.............................................................................................. 66
3.5.4.3. The Role of Local Governments..................................................................................................... 67
3.5.4.4. The Role of Operators and Infrastructure Owners.......................................................................... 67
3.5.5. Recommended Policy Position - Rail Transport Planning.................................................................................. 67
3.5.6. Recommended Policy Position - Skills Development and Job Creation............................................................ 69
3.5.7. Recommended Policy Position - Regulation..................................................................................................... 70
3.5.8. Recommended Policy Position – Safety Management...................................................................................... 71
3.5.9. Recommended Policy Position – Security Management................................................................................... 72
Chapter 4 .................................................................................................................................................................... 73
Way Forward
4.1. Policy Implementation Priorities...................................................................................................................... 74
4.1.1. Develop of a National Rail Master Plan............................................................................................................. 74
4.1.2. Define and Scope the Rail Revitalisation Programme........................................................................................ 74
4.1.3. Develop a National Rail Investment Strategy..................................................................................................... 74
4.1.4. Develop a Branch Line Strategy....................................................................................................................... 74
4.2. Policy Co-ordination Mechanisms.................................................................................................................. 74
4.3. Policy Monitoring and Evaluation.................................................................................................................... 76
4.4. Conclussion.................................................................................................................................................... 76
Bibliography................................................................................................................................................................. 77
List of Figures
Figure 1: Railway Market Spaces................................................................................................................................ 21

Figure 2: Proposed Planning Structure Across the Spheres of Government ............................................................... 68
Figure 3: Role Players for Policy Implementation and their Functions........................................................................... 75
List of Tables
Table 1: Classification of the South African Rail Network ............................................................................................. 9

Table 2: Comparative Rail and Road Market Shares over Time ................................................................................. 12
Table 3: Comparative Line Densities for Selected Railways........................................................................................ 44
Table 4: Key Performance Indicators for Standard Gauge and Narrow Gauge ........................................................... 45
Table 5: Key Comparative Attributes by Country ....................................................................................................... 54
Abbreviations and Definitions

Abbreviations

BB-BEE Broad Based Black Economic Empowerment
CAPEX Capital Expenditure
CCTV Closed Circuit Television
DoT Department of Transport
DPE Department of Public Enterprises
EFP Electronic Fare Payment
EMU Electric Multiple Unit
EU European Union
GDP Gross Domestic Product
HDI Historically Disadvantaged Individual
HSR High Speed Rail
IPAP2 Industrial Policy Action Plan 2010/11 – 2012/13
IRERC Interim Railway Economic Regulatory Capacity
ITP Integrated Transport Plan
ITS Intelligent Transport Systems
kN kiloNewton
KPIs Key Performance Indicators
MTSF Medium Term Strategic Framework
NATMAP National Transport Master Plan
NDP National Development Plan
NEDLAC National Economic Development and Labour Council
NEPAD New Partnership for Africa’s Development
NFLS National Freight Logistics Strategy
NLTA National Land Transport Act 5 of 2009
NLTSF National Land Transport Strategic Framework
NRMP National Rail Master Plan
OECD Organisation for Economic Co-operation and Development
PICC Presidential Infrastructure Coordinating Commission
PFMA Public Finance Management Act
i
PRASA Passenger Rail Agency of South Africa

PPP Public Private Partnership
RER Railway Economic Regulator
RSR Railway Safety Regulator
SABS South African Bureau of Standards
SADC Southern African Development Community
SIP Strategic Infrastructure Project
SLA Service Level Agreement
SMMEs Small, Medium and Micro Enterprises
SOC State Owned Company
STER Single Transport Economic Regulator
TFR Transnet Freight Rail
TE Transnet Engineering
UK United Kingdom
USA United States of America
Definitions
The following definitions are offered for the purpose of this document to enable readers to better
understand its content.
Adaptation The process of changing the rail industry or parts thereof to meet and successfully respond to the
changing local and global rail environment.
Below Rail Pertaining to fixed Rail network infrastructure, i.e. all earthworks, structures, ballast, sleepers, rails
and fastenings; and where present also ancillary buildings, electrification and signalling.
Branch Lines Railway lines that feed into the Core Network, and usually connected to the latter at one end only.
Bulk Freight Commodities such as fuel, grain, and minerals that are loaded directly into wagons specially designed
to convey them.
Commuter Rail Passenger rail services that provide daily travel between home and work.
Concessionaire The holder or operator of a concession.
Concession and The granting of a right by a statutory authority to one or more entities to operate, build, finance,
Concessioning maintain or more, railway assets or services on all or a part of a rail network, for a defined period, in
return for agreed undertakings by a Concessionaire.
Core Network The major part of the Railway Network that reaches out to ports, terminals and neighbouring countries.
Corridor A linear single- or multimodal route characterised by few or no branches that can muster sufficient
coherent traffic to achieve economies of scale and thereby support substantial investment to carry
such traffic effectively and efficiently.
Fiscus The government function that collects revenue and administers finances.
General Freight Freight not defined in terms of the goods transported.
Green Paper A tentative Government report of a policy proposal, published for consultative purposes, without
displaying any final intent.
ii
Heavy Haul A railway operation that regularly meets at least two of the following requirements: Operates trains
of at least 5 000 tonnes, hauls revenue freight of at least 20 million gross tonnes per year over a line
haul segment of at least 150 km, and operates with axle loads of 25 tonnes or more (IHHA, 2015).
Integrated A system in a particular jurisdiction that integrates public transport modes and services, with real
Public Transport time information, through-ticketing and other enabling functionalities, to provide users with seamless
Network travel solutions between origin and destination, as per the NLTA.
Intermodal Transportation of freight or passengers by means of more than one mode of transport (e.g. aviation,
rail, road, and maritime).
Land Transport Fixed capital equipment and facilities comprising the land transport system. It may be confined to
Infrastructure a single country, but more usefully and more usually Rail is connected to neighbouring and other
countries on the same continent.
Light Rail An urban rail public transportation system on partly or completely segregated right-of-way that has
lower capacity and possibly lower speed than heavy rail metro- and suburban systems, but higher
capacity and higher speed than traditional tram systems on right-of-way shared with motor vehicles
and/or pedestrians.
Long Distance Passenger rail operations, other than urban commuter and regional passenger rail operations that
Passenger Rail cross one or more provincial borders within South Africa and possibly beyond.
Monopoly A situation in which a single entity owns all or nearly all of the market for a given type of product or
service, resulting in absence of competition.
National Railway The contiguous network owned by State companies.

Network
Network A system of railway infrastructure that connects and serves a multiplicity of separately located nodes,
the latter being customer facing sites such as freight terminals, intermodal facilities, passenger
stations, ports, and public and private sidings, as well as domestic sites such as maintenance and
running depots.
Network The person or persons who have ultimate accountability for one or more of: the safety of a network
Operator or part thereof including the proper design, construction, maintenance and integrity of the network;
ensuring compliance of rolling stock with the applicable standards of the network; or for the authorising
and directing of the safe movement of rolling stock on the network.
Private Sector The part of a nation’s economy that is not owned by the Government.
Public Sector The part of a nation’s economy that is owned and controlled by Government to facilitate or provide
basic social services such as health, defence, education, justice and transport.
Rail The transport mode provided by railways.
Rail Industry The extended set of entities participating in railways, including infrastructure or network operators,
train operators, and suppliers of equipment, materials, and services specific to such operators.
Rail Facilities required to operate a railway safely, including right-of-way; track; structures and works,
Infrastructure e.g. cuts and fills, bridges, tunnels, drainage, service roads and fencing; communication systems;
train authorisation systems; electrical power supply systems; intermodal facilities, stations, terminals
and yards; notices and signs; as well as associated buildings, maintenance depots, equipment,
machinery, plant and workshops; and many other, but excluding rolling stock.
iii
Rail Sector The subset of the Rail Industry that is engaged in actually delivering freight or passenger rail services,
i.e. infrastructure or network operators, and train operators.
Rail Service A passenger or freight transport service operated on rail track or any other guiding arrangement,
including heavy rail, light rail and rubber-tyred guided systems.
Railway A guided system designed for the movement of rolling stock that has the capability of transporting
passengers, freight or both, including the land and ancillary assets for the purposes of operation.
Railway Safety The Railway Safety Regulator established in terms of the National Railway Safety Regulator Act No.
Regulator 16 of 2002.
Regional Those passenger rail operations, other than urban commuter rail operations that take place within
Passenger Rail the borders of a province of South Africa.
Regulator A public entity that regulates a particular industry or business activity, which is empowered by
legislation to make regulations and to monitor and enforce compliance with those regulations.
Rolling Stock Vehicles that are able to operate on a railway, irrespective of their capability of independent motion.
Station A facility for passengers to enter or leave a train, including a railway passenger terminal and a
passenger halt and may include facilities for passenger modal transfer and commercial activities
forming part of the station and also includes any other place that may be prescribed, but excludes
that part of the network running through the station.
Station Operator An entity or person in control of a station and the management of the station and its assets.
Track Gauge Measure of distance between the inside faces of parallel rails of a railway track.
Train Operator A person or persons who have the ultimate accountability for: The safe movement of rolling stock
on a network; safety and integrity of rolling stock; and safety of freight or persons being conveyed.
Urban Rail An all-encompassing term for various types of commuter railway systems closely associated with
cities and metropolitan areas.
Vertical The institutional integration of the entity(ies) responsible for managing railway infrastructure with the
Integration entity(ies) undertaking the operation of passenger and/or freight railway services.
Vertical The institutional separation of the entity(ies) responsible for managing railway infrastructure from the
Separation entity(ies) undertaking the operation of passenger and/or freight railway services.
White Paper A parliamentary paper enunciating government policy.
iv
Foreword by the Minister of

Transport
The National Development Plan 2030 vision alludes to

investment in the transport sector that will ensure transport
serves as a key driver in empowering South Africa and
its people by enabling improved access to economic
opportunities and services. History reveals a compelling link
between transport infrastructure and economic prosperity.
New and faster connections enable economic opportunities,
making markets more accessible for business and the
public alike. Without good connections, businesses struggle
to meet the demands of customers and suppliers, and
those vital connections facilitating trade and business are Government alone cannot afford to solve all of the problems
lost. South Africa needs transport infrastructure to match faced by the rail system. Given financial constraints in
its economic ambitions and rail has an important part to government, it is clear that more needs to be done to
play in ensuring that we are a major economic player in an leverage private sector finance into infrastructure projects.
increasingly competitive global economy. This will involve going beyond the current models of public-
private partnership.
The rail sector has suffered from severe underinvestment in
railways since the 1980s, and the consequential obsolete Rail is an essential part of the Department’s vision of transport
rail infrastructure and rolling stock, inefficient operations, for the next five years and the adoption of a White Paper on
and under-utilisation of the network has resulted in the National Rail Policy is our main priority for this sector. As
significant loss of market share to road. such, the Department has now developed the Green Paper
on National Rail Policy, which is a discussion document that
It is time to realise that the different elements of transport outlines policy proposals designed to address key challenges
cannot be considered in isolation. There is no point in having faced by the rail sector, thereby improving the performance
an excellent road network if our railways are overstretched of our railways. It proposes the revitalisation of rail in South
and not good enough to compete with the rest of the world. Africa through the implementation of strategically focused
We should not only cater for our current transport needs, investment-led policy interventions which will reposition
but also to consider what kind of transport infrastructure we both passenger and freight rail for inherent competitiveness
will need in the long-term. Three key demands of a future by exploiting rail’s genetic technologies to increase axle
rail network include more capacity, increased reliability and load, speed, and train length.
greater connectivity.
Consultation is critical during policy-making; therefore my
In my view, the future of railways and the prosperity of the Department will conduct extensive engagements with
country are inextricably linked. I therefore welcome the all stakeholders on the Green Paper through one-on-one
Green Paper’s focus on how to make our rail network fit for meetings and provincial workshops. The public is also
future generations. Internationally, today’s railways are very invited to rigorously engage with this process and to submit
different from that of the early 1900s due to innovation and written comments. All inputs submitted to the Department
new technologies from a wide range of applications. These will be considered in the development of the White Paper on
interventions have been successfully incorporated over National Rail Policy.
the years and have significantly improved the performance
of railways globally. As a result, we, as a country, need to
also be innovative and introduce new technologies in our
railways. The Green Paper is a step in the right direction,
recognising the importance of sustainability and innovation. I
fully share the vision and commitment in the development of
sustainable rail transport and to stimulate innovative thinking MS. DIPUO PETERS, MP
on technical and policy perspectives in the railway sector. MINISTER OF TRANSPORT
1
Executive Summary them. Evidently existing legislation and transport policy

were not conducive to repositioning railways in market
Rail is once again destined to play a pivotal role in the future spaces that could serve as backbone of its logistics and
South African freight and passenger land transport industry. mobility systems.
While rail is a well-established industry in South Africa, it has
experienced mixed fortunes over time, and several events To reposition rail to play its future role as preferred land
that have marked South Africa’s history have also impacted transport mode and backbone with which all other transport
adversely on the industry’s overall development and the modes integrate, current rail challenges have to be resolved
socio-economic impact it should have had on the macro at the same time as levelling the playing field by addressing
economy. unfair advantages that the road transport sector currently
enjoys. This will require strategic interventions that ultimately
Historic events and other contributing factors have pushed revitalise the rail industry. From extensive international and
large portions of the rail industry into acute decline. local research, it is evident that for rail to play a leading role
Although State Owned Entities have made investments in in the national transport task, its inherent competitiveness
recent years and there has been some improvement, the must be enhanced to successfully compete and collaborate
rail industry still faces many major challenges. The obsolete with other transport modes. To achieve this, rail must
state of much of the rail infrastructure and rolling stock, exploit its natural competitive strengths compared to
limitations of narrow gauge and under-utilised portions other transport modes. The railway renaissance of the last
of the existing network are only a few of the challenges. fifty years has demonstrated that rail’s natural strength
Massive capital investment backlog and an increasing is to be a heavy duty, high speed carrier in high-volume
need for investment funds further exacerbate strain on the traffic corridors, whether freight or passenger. Thus rail
industry. Logistics service providers and shippers clearly can compete effectively against other transport modes in
prefer road transportation in many categories of natural rail the High-speed Intercity, Heavy Haul, Double Stack and
freight, and there is also a preference by both short and contemporary Urban Rail market spaces, where it has
long distance passengers for road transportation. A lack already demonstrated robust sustainability.
of security for passengers and freight, deteriorating rolling
stock, ageing infrastructure, inefficient operations and The essential challenge for a country such as South Africa,
inadequate availability of specialised technical skills further whose railways have, with exceptions, been in acute
contribute to the current moribund state of the industry. decline, is to move its railways into market spaces, where
they will be able to compete against or collaborate with other
The foregoing challenges have resulted in uncompetitively transport modes. A move into such market spaces can be
positioned, ineffectively equipped, operationally inefficient achieved through a strategically guided rail revitalisation
railways that have lost both their ability to compete with program that would likely include a combination of public
road transport in the local logistics and mobility markets, and private funding and streamlined institutional structures
and their ability to support exporters in competing effectively to implement as many as workable of the High-Speed
in the global market. The absence of equitable road pricing Intercity, Heavy Haul, Double Stacking and contemporary
has advantaged road transport operators relative to railways Urban Rail options.
and further eroded the latter’s ability to compete effectively
in the marketplace. It is evident that, in order to achieve successful rail
revitalisation in South Africa, robust and in certain instances
In the absence of a National Rail Policy, there has been drastic interventions are required. Their implementation will
no coherent national direction to guide development of call for strong and unwavering leadership from National
the rail sector and to align and revitalise the industry over Government and clear direction through National Policy to
time according to rail’s global development trajectory. No drive rail revitalisation. The National Rail Policy will give much
National Rail Policy is in place to guide National decision- needed direction to the rail sector and the rail revitalisation
making, both regarding rail’s role in South Africa’s overall process and will also consider the South African setting and
transport requirements and investment strategy to meet its priorities, such as promoting the developmental state,
2
socio-economic development, job creation, eradicating personnel and expertise will increase exponentially and
poverty, unemployment and under-development. many opportunities will become available to jobseekers.
Successful rail revitalisation will also lead to predictable
The fundamental purpose of the National Rail Policy is and sustained long-term demand for rolling stock and rail
therefore to enable revitalisation of South Africa’s rail infrastructure, thereby creating platforms for development
industry through implementing the following strategically of local industrial capacity and capability, and creating long-
focussed policy interventions: term employment opportunities in the supplier industries.
Establishment of local manufacturing plants will create
a) Invest in a relatively small high performance new a substantial number of job opportunities and redevelop
network that can set extra-urban railways on a rail engineering capacity and skills that were lost over
renaissance trajectory, to recapture rail’s proper share decades of underinvestment in railways. All this will support
of the national transport task in a developing economy; Government’s Industrial Policy Action Plan, National
and Development Plan and New Growth Path objectives.
b) Expand funding sources by inviting private
sector participation in profitable opportunities Environmental challenges have become one of the
with manageable risk. To promote private sector imperatives facing the global transport sector. In many
participation, third party access to the rail network is countries it is indeed the largest contributor to greenhouse
anticipated, to be negotiated with the infrastructure gas emissions, therefore, Government through legislation
owner under the oversight of the Single Transport strongly supports protecting the environment, as well
Economic Regulator. In addition, government funding as hedging South Africa against fuel price instability and
into railways will be explored particularly in respect of, environmental costs. With current technologies, the
but not limited to, investments for the public good or dominant transport sector, road, is beholden to finite
that are strategic in nature, that redress constraints reserves of fossil fuels, which situation is unsustainable in
inherited from colonial times, as well as rail services the long run. This Green Paper therefore promotes the rail
that are unsustainable without an external subsidy or mode as eminently suited to lead the transport sector into
to fulfil public service obligations. the age of energy scarcity and environmental sensitivity,
particularly when it is powered by clean or renewable
The key to successful rail revitalisation interventions will be energy.
centralised coordination of rail policy and strategic planning
at National Government level through the Department South Africa’s railway network is a national asset and its
of Transport, and the forthcoming establishment of the operational effectiveness impacts the whole economy and
envisaged Single Transport Economic Regulator, which will society. The National Rail Policy will guide performance
oversee regulation of all rail sector economic aspects, as improvement in all aspects of rail service delivery for
well as of the overall transport system. The strategic vision passengers and freight customers, including quality,
for rail must be integrated not only with overall strategy efficiency, volume, price and intermodalism. It will drive
for national transport but should be driven by the wider reduction in the cost of freight services at national level
economic and social objectives of South Africa. In particular, through encouragement of modal shift from road to rail.
strategic investment decisions should seek to enable the It will also drive passenger mobility, through higher quality
appropriate competitive technologies that will establish rail services with increased intermodal connectivity. The
as the logistics and mobility backbone of South Africa and implementation of the National Rail Policy should therefore
thereby fulfil its aspiration to shift substantial amounts of be given high priority as its significant contribution will
freight and passenger traffic from road to rail. not be limited to the rail sector, but will go beyond that to
make significant positive impact on South Africa’s socio-
Successful rail revitalisation will have significant positive
economic development.
impact on job creation and skills development within the
industry. A competitive, revitalised rail industry will not
only attract potential job seekers, but the need for skilled
3
Chapter 1
Introduction
1.1. Background that enable it to adapt to the qualities required of well-

positioned, high performance railways that are locally and
The South African rail transport sector has experienced globally relevant, thus to serve the priorities of the South
mixed fortunes from its inauguration in 1860 until the African setting, such as promoting the developmental state,
present day. The events that have marked South Africa’s socio-economic development, job creation, and eradicating
history have impacted significantly on the development of poverty, unemployment and underdevelopment.
the rail sector and, together with other external factors have
resulted in a railway industry that now faces several major During the State of the Nation Address on 9 February
challenges. 2012, the President pronounced on the South African
National Infrastructure Plan, which includes both economic
These challenges include the aging, deteriorating or and social infrastructure. It is to be coordinated by the
obsolete state of much of the rail infrastructure and rolling Presidential Infrastructure Coordinating Commission
stock, perceived under-utilisation of parts of the existing rail which was established in September 2011, bringing
network, a capital investment backlog and an associated together Ministers, Premiers and Metro Mayors under
need for investment funds, a preference by logistics service the leadership of the President. The PICC is mandated to
providers and shippers for transporting many categories oversee implementation of eighteen Strategic Infrastructure
of natural rail freight by road, a preference by both short Projects that will stimulate social and economic growth.
and long distance passengers for road transportation, a The Infrastructure Development Act 23 of 2014 legislated
lack of security for both passengers and freight, inefficient the existence of the PICC, and gave it power to ensure
operations, and shortage of specialised technical skills. The that infrastructure development is given priority in
challenges inherent in rail are compounded by road transport planning, approval and implementation; and to ensure
deriving an unfair advantage due to several structural that the development goals of the State are promoted
impediments such as insufficient road infrastructure through infrastructure development. The SIPs are aimed
charging to road hauliers, non-internalisation of externality at addressing South Africa’s infrastructure deficit to boost
costs, and poor overloading control. They have, with economic growth and create much needed jobs. These
limited exceptions, resulted in uncompetitively positioned, include, among others, the construction of roads, power
operationally inefficient railways that have lost their ability stations, pipelines and, in the present context, rail. Six of
to compete with road transport in the local market, as well the SIPs address rail issues such as branch lines, capacity,
as to support exporters to compete effectively in the global corridors, densification, infrastructure, investment, logistics,
market. road-to-rail-shift, and upgrading.
Railways in many other countries have faced similar Transport infrastructure initiatives are planned among other
challenges, and a significant number of them have adapted, in the following areas:
or are adapting, with varying degrees of success, to the
changing environment in which the rail industry must a) The promotion of the efficient movement of goods
position itself. In South Africa, the historical influences and and economic integration through the development of
present socio-economic environment have created a unique logistics and industrial corridors, connecting coalfields
setting within which railway stakeholders must address the to power stations, the expansion of the iron-ore and
challenges by initiating revitalisation interventions. coal rail lines, the expansion of ports, and finalization
of rail and road projects per Strategic Infrastructure
Although railways are well-established in South Africa, their Project 1.
inherent competitiveness and ability to impact significantly
on South Africa’s economic and social development b) Moving towards a high quality integrated Mass Rapid
is constrained by the challenges that they face. The Transport Network which includes: rail, taxi, and bus
absence of a National Rail Policy hampers modernisation, services - public transport that is effective, affordable
development and growth of railways. A rail policy would and safe in both regional and urban environments, per
give direction to the rail sector, addressing those factors Strategic Infrastructure Project 7.
5
c) The establishment of local manufacturing industries 1.2.1.1. The Early Development Phase
which will result in substantial sustainable jobs over
Rail transport started as a private enterprise in 1860 with
the twenty-year passenger rolling stock procurement
the introduction of the first steam train in Durban. In the
period and the redevelopment of rail engineering
1870s, government took over private railways to serve
capacity and skills that have been lost over decades
of underinvestment in the local railway engineering the long term developmental needs perceived at the time.
industry, per the National Infrastructure Plan Enablers Until 1910, rail transport in South Africa was a colonial
and Opportunities, and Industrial Development development used in the interests of the military and for
initiatives. the transportation of agricultural and mining traffic. Rail
infrastructure was planned and developed to benefit the
These initiatives share significant complementary colonial power’s interests, hence networks and operations
interconnections with and are strongly underpinned by were focussed on moving soldiers and military supplies
the New Growth Path which identifies infrastructure and conveying farm produce and minerals. Services did
construction as one of five key jobs drivers for a new growth not recognise the long-term developmental needs of the
path, and the National Planning Commission’s National colonies or their people.
Development Plan – Vision for 2030. Most significantly, the
NDP’s vision for transport calls for focus on total transport 1.2.1.2. The South African Railways & Harbours
system efficiency to maximise the strengths of different Phase
modes, cut inefficiencies and reduce disparities, with the The South Africa Act of 1909 nationalised certain transport
least environmental, social and economic cost. The policy services and established the South African Railways &
positions recommended in this Green Paper have been Harbours (SAR&H) at unification in 1910. All railways and
developed in alignment with the strategic vision put forward harbours belonging to the former Colonies became vested
in these key national plans. in the Governor-General in Council, a grouping that has
endured mutatis mutandis until the present. The Act further
Government is committed to adapt and to develop the stipulated that no railway for the conveyance of public
existing rail industry to a ‘railway of the future’ – a rail industry traffic, port, harbour, or similar work, shall be constructed
that will perform optimally, compete effectively locally and without the sanction of Parliament. The legislated strategic
support exports into markets abroad, satisfy stakeholder direction was the development of agriculture and industry
needs, and contribute positively to the economic and social in the Union in line with business principles. This mandate
development of South Africa. guided network development decisions, resulting in
infrastructure that specifically served agricultural and
1.2. Situational Analysis industrial development, the Union and its communities as
a whole. The Act also referred to cheap transport where
This situational analysis presents information obtained
affordability, which would increase access to transport,
through a systematic collection of past and present
was the primary focus and stated that revenues should not
economic, political, social, and technological data. It
exceed what was required for operations and servicing of
provides a firm foundation for contextualising railways in
loans.
South Africa within the international rail arena and its on-
going development. This would support the understanding
With the establishment of the Republic of South Africa,
required to address the challenges that detract from high
the Republic of South Africa Constitution Act 32 of
performance railways in South Africa, as well as to identify
1961 replaced the South Africa Act, and confirmed
strategies to overcome them.
the same strategic railway focus on agricultural and
industrial development as its predecessor. This resulted in
1.2.1. Historical Overview of Rail
development and operations taking place in these fields but
This historical overview has been divided into the Early there was no specific drive to serve the wider economy or
Development Phase, the South African Railways & Harbours social development. Economic development nevertheless
(SAR&H) Phase and the present Pre-revitalisation Phase. took place during the SAR&H phase. Developments in the
6
transport sector also included harbours, and petroleum c) Suburban passenger services should be separated
pipelines. Road transport was highly regulated during this from the rest of SATS and should be subsidised
phase, resulting in little competition from the mode, which directly by Government.
favoured the development of rail. d) SATS should be allowed flexibility to set tariffs that
would provide adequate returns.
The Road Transport Act 74 of 1977 introduced the first e) SATS should operate like a private investor-owned
steps to relax the high degree of road transport regulation, company, required to make a profit by functioning as
by expanding grounds for permit applications and allowing a commercial enterprise under government ownership
permits to be issued more freely. whilst earning an appropriate return on capital by
cutting costs and managing assets better.
The South African Transport Services Act No. 65 of 1981
(the SATS Act) replaced the SAR&H legislative dispensation, Pursuant to the De Villiers Report and its recommendations,
changing the name SAR&H to South African Transport investment in SATS was severely curtailed. In the period prior
Services (SATS). SATS was empowered to control, manage, to 1986 Parliament regularly allocated capital expenditures
maintain and exploit certain transport services throughout for SATS of up to R2 billion a year. Infrastructure was
the Republic. The SATS Act brought a significant change maintained and replaced on schedule. However, in 1986,
to the strategic focus of rail transport services, in that it expenditure on fixed assets fell to R1.44 billion. By 1988
stipulated that the SATS would be administered on business
the allocation was down to R699 million and it was
principles with due regard to the economic interests
terminated at the end of the SATS dispensation. During
and total transport needs of the Republic. The strategic
the same period the permit system for road transport was
focus had moved from the development of agriculture
discontinued, effectively deregulating the road transport
and industry by way of cheap transport services, to the
sector. Total deregulation of road transport came into
economic interests and total transport needs of the country.
effect with the promulgation of the Transport Deregulation
Further, passenger rail developments followed, although
Act No. 80 of 1988, which resulted in the road transport
they remained principally around industrial areas and major
industry expanding significantly, at the expense of rail
cities, and did not extend to major areas of population
market share. Various changes were introduced in SATS
growth, including settlements. Note, however, that although
culture, organisation and procedures, to prepare for a more
legislation determined that the transport services must be
competitive environment whilst a laissez faire approach to
administered in terms of business principles, this did not
the road transport sector resulted in inadequate levels of
take place.
road safety and protection of road infrastructure.
During the 1980s South Africa faced severe capital

The rail investment curtailment and the simultaneous
shortages due to the cumulative effect of sanctions and the
road transport deregulation had a major impact on the
need to mobilise its military at significant cost. This resulted
in Government having to review capital spending programs performance of SATS. Prior to road transport deregulation
of its enterprises, including SATS. The De Villiers Report in 1988, SATS operations were supported by excellent
(1986) on Strategic Planning, Management Practices technological solutions, world-class rolling stock and
and Systems of SATS highlighted several shortcomings infrastructure being well-maintained and timeously
including that investments had been made in sectors of replaced, but the cutback on investment plunged SATS into
the industry that did not have the ability to compete with a downward spiral, leading to idle rolling stock and under-
other modes, or that ran at a loss. Significant losses in the utilised infrastructure, from which it has not recovered. After
freight and passenger rail sectors were confirmed and the road transport deregulation in 1988, rail in many business
following recommendations were made: sectors was no longer the preferred freight transportation
mode and it lost market share to the road transport industry,
a) SATS should cut back on new rail investment and with far-reaching social and economic consequences.
rather focus on increasing utilisation of existing assets.
b) SATS should restructure to separate the major modes The Legal Succession to the South African Transport
namely railways, harbours, airways and pipelines. Services Act No. 9 of 1989 replaced the SATS dispensation.
7
In April 1990 Transnet emerged as a fully State-owned entity Gautrain Rapid Rail Link as a public private partnership in
responsible, among other, for freight and long distance terms of a concession agreement between the Gauteng
passenger rail services through its Spoornet division, and Provincial Government and the Bombela Concession
long distance passenger and road freight services through Company. Gautrain opened for service in May 2010, in time
its Autonet division, while the South African Rail Commuter for the FIFA Soccer World Cup.
Corporation (SARCC) was established to take responsibility
for commuter rail services. Commuter rail services were to 1.2.2. The South African Rail Industry and
be directly subsidised, while long distance passenger rail Structure
services provided by Transnet did not qualify for subsidy. The South African rail network is the eleventh largest in the
In general, the overall condition of freight and passenger world at 22 298 route kilometres, and total track distance of
assets continued to deteriorate and the investment backlog 30 400km. Within the Southern African context this is much
increased steadily. larger than any of its neighbouring countries: Mozambique
at 3 125km, followed by Zimbabwe at 3 077km, Namibia at
1.2.1.3. The Pre-revitalisation Phase 2 629km and Botswana at 886km. Note that the dominant
Regarding passenger rail, old and inadequately maintained track gauge is 1 067mm, also referred to as Cape gauge,
assets undermined redoubled efforts to develop the sector. and therefore narrow gauge by comparison with the globally-
After many years of overloading and under-maintaining, dominant standard gauge of 1 435mm. When making
the condition of the heritage commuter rolling stock had comparisons with other countries, it is therefore important
deteriorated to crisis levels, and was unable to satisfy to appreciate that aside from moderate competence in the
passenger demands. Similarly, the network infrastructure heavy haul and urban rail market spaces, narrow gauge
was not able to meet the demands of a rapidly changing railways are less competitive than standard gauge railways
society. To consolidate passenger rail, that is Metrorail and and have less capacity. While South Africa may thus rank
Shosholoza Meyl, the Passenger Rail Agency of South eleventh by route kilometres, many of those route kilometres
Africa (PRASA) was established in 2009, to position and are underutilised, and it therefore ranks lower by the more
promote rail as the preferred travel mode in high-density, significant performance measures of passenger journeys or
high-volume corridors where it would be competitive by passenger-kilometres, and freight tons transported or ton-
virtue of its only inherent strength, namely high capacity. kilometres. The network can be classified as follows:
Regarding freight rail, most branch line traffic was lost

to predatory competition from road hauliers during the
1980s. Consequently, SATS decided to disinvest from
many of the branch lines, which exacerbated this loss of
freight traffic. Deregulation of road freight in 1988 resulted
in substantial volumes of high-value low-density freight on
the core network shifting from rail to road during the 1990s.
During the 2000s, continued lack of competitiveness and
investment by TFR resulted in road hauliers deploying side-
tipper interlinks to encroach on the last bastion of freight
rail, long distance haulage of heavy bulk commodities such
as coal, grain, and ore. Overall, railways in South Africa had
deteriorated to a stage where the need to adapt to rail’s
global renaissance had become patently obvious to most
stakeholders.
By contrast, two important positive steps during this phase

were the establishment of the Railway Safety Regulator
by Act of Parliament in 2002, and the development of the
8
Table 1: Classification of the South African Rail Network (Branchline strategy, 2009)
Classification Distance Characteristics

Basic Core Port-Rail corridor 12 801 km • Freight oriented
Port Interconnect (63.8% of total • Heavy haul
Cross-Border Interconnect network distance • Block loads
of 20 079 km) • Hub to hub
Extended High Volume Feeder
Includes 74 km of • Corridors
Core
closed lines • Rail, Port and Pipeline connectivity
• Limited inter-modalism
• Operational flexibility
Branch Closed Lines 3 350 km • Multi-use potential
lines Low Volume Active Branch lines (16.7%) • Generally low volumes
High Volume Active Branch lines 3 928 km • Low axle load
(19.6%) • Low speed
Lifted Lines 874 km • Tight curves
(not included) • Steep gradients
• Small scale operations
• Diverse origin-destination pairs
Urban Active networks in Gauteng, KwaZulu- 2 228 km • Potentially high volume, high
Commuter Natal, and Western Cape provinces, frequency service between CBDs
Network as well as small-scale services on lines and densely populated residential
shared with TFR in Eastern Cape Province areas
Gautrain Dedicated standard gauge network 80 km • Rapid rail service between Pretoria
and Johannesburg, and Sandton
and OR Tambo International Airport
The Railway Safety Regulator (RSR), which was established in their service delivery by suppliers of equipment,
by the National Railway Safety Regulator Act 16 of 2002, consumables and services, also referred to as the Supply
oversees safety of the South African rail sector. The RSR’s Industry.
mission is to promote safe railway operations through
appropriate support, monitoring and enforcement, guided 1.2.2.1. Transnet SOC Ltd
by an enabling regulatory framework. Furthermore, the
Department of Transport recently established an Interim Rail Transnet SOC Ltd is a major public entity listed under
Economic Regulatory Capacity to develop rail regulatory Schedule 2 of the Public Finance Management Act
capacity. 1 of 1999 (PFMA), reporting to the Minister of Public
Enterprises. It owns and operates South Africa’s principal
Public sector railways in South Africa comprise three transport infrastructure through its Operating Divisions
distinct vertically integrated entities, namely the Transnet Transnet Freight Rail (TFR). Transnet National Ports
Freight Rail (TFR) division of Transnet SOC Ltd (previously Authority, Transnet Port Terminals, Transnet Pipelines, and
Transnet Limited), the Passenger Rail Agency of South Transnet Engineering (TE) for its rolling stock, port and
Africa (PRASA), and the Gautrain Management Agency. terminal equipment. TFR’s core business is freight logistics
They fulfil distinctly different roles and responsibilities and solutions delivered through its Business Units (BU’s)
have different objectives and service delivery requirements. focussed on Automotive, Containers, Lime and Cement,
A small number of privately owned freight and passenger Coal, Grain, Agriculture, Fuel, Chemicals, Fertilizer, Chrome
rail companies, the latter focussing on railway heritage and and Manganese, Granite, and Consolidated. Its operating
tourism, also operate in South Africa, either on their own division comprises the GFB Commercial, Coalline, Ore
networks or under private access arrangements negotiated Line, and Blue Train and Shosholoza Meyl businesses. It is
with TFR and/or PRASA. Railway operators are supported essentially a vertically integrated railway, which means that
9
it owns and operates all the fixed assets under its control PRASA’s rail operations division owns most of the below-
including all the rail infrastructure, and almost all rolling stock rail assets for its operations, and leases the remainder from
such as locomotives and wagons, as well as the two Blue TFR.
Trains. TFR has access agreements with PRASA, to enable
it to access ports where the relevant rail infrastructure is 1.2.2.3. Gautrain Management Agency
owned by PRASA, and PRASA with TFR where it requires
The Gautrain Management Agency (GMA) was established
access for its long-distance passenger services. TFR also
as a Gauteng Provincial Government entity to manage the
has access agreements with municipalities and private-
Public Private Partnership (PPP) concession agreement
siding owners. Transnet receives neither government
subsidy nor sovereign guarantee of its debt. Transnet funds between the Gauteng Provincial Government and the
all its investments from its balance sheet. It is currently in the Bombela Concession Company in respect of the Gautrain
third year of its Market Demand Strategy, where validated Rapid Rail Link. The comprehensive concession agreement
demand is lower than originally anticipated. Capital is underpinned development of the project, as well as operation
aligned to capacity requirements to maximise value (to an and maintenance over the 15-year concession period,
unstated criterion), and capital remains a key constraint after which time the assets will be transferred to Gauteng
(Transnet, 2014: 42). Province. Gautrain is designed to operate profitably, with
support from a patronage guarantee by Gauteng Province.
1.2.2.2. Passenger Rail Agency of South Africa
The Passenger Rail Agency of South Africa (PRASA) is a The Gautrain Rapid Rail Link is clearly different from the
National Government Business Enterprise listed under other rail networks in South Africa in that it is currently the
schedule 3B of the PFMA that reports to the DoT through only service offered on standard gauge, which supports
a Board of Control. Its main focus is to fulfil government’s travelling at nominally 160km/hour. It provides Airport
obligation by playing a major role in the development of Service between O.R. Tambo International Airport and
social and economic infrastructure. PRASA merged the Sandton Station, as well as providing General Passenger
assets, operations, and personnel of the South African Service between Rhodesfield Station and Sandton
Rail Commuter Corporation (SARCC), its Rail Operations Station, and Hatfield Station in Pretoria and Park Station
Division (Metrorail and Shosholoza Meyl), its PRASA in Johannesburg. It interchanges with PRASA services at
Corporate Real Estate Solutions (CRES) division and its
Park, Rhodesfield and Pretoria stations. The last phase
subsidiaries Autopax and Intersite Investments. Metrorail
between Rosebank and Park Station became operational in
delivers commuter rail services in urban areas, Shosholoza
June 2012. The Gautrain system currently provides service
Meyl delivers regional and long-distance (inter-city) rail-
for up to 17 hours per day. Dedicated buses provide feeder
based passenger services while Autopax delivers road-
and distribution services between stations and surrounding
based regional (inter-city) passenger services under the
passenger catchment areas, although this service is not
Translux and City-to-City brands. The primary role of
offered on week-ends and public holidays.
Intersite Investments within the PRASA Group is to develop
and grow assets of PRASA to generate funding for the
1.2.2.4. Private Operators
Group, while PRASA CRES is responsible for Real Estate
Asset Management, Facilities Management and Property A small number of private train operators currently
Development. operate on the national railway network in terms of access
10
agreements with the relevant infrastructure owner. There capital equipment such as track, power supply, train
are also numerous private sidings, which are tracks or control, coaches, locomotives, wagons and many others.
networks operated by industries such as mining and steel Consumables include items used for maintenance, as well
that consign and/or receive trainloads of rail freight: They as energy and many other. Services include consulting,
are linked to the National Railway Network to ensure that rail construction, outsourced maintenance, and many other.
can serve commercial, industrial or port-related enterprises The Supply Industry generally comprises private sector
without trans-shipment. Private operators contribute to entities, and its size and vibrancy are closely coupled to
the passenger rail sector by providing heritage or tourism- that of the infrastructure or network operators, and train
related services across South Africa. A number of private
operators. The private sector, however, cannot support
train operators also participate in the rail freight sector,
unproductive assets, and it has therefore largely exited
especially in private networks of the mineral extraction and
the railway business or found markets in other businesses
beneficiation industry.
or other countries. Unless it is oriented towards export
Private railways, and extensive private sidings, such as markets, it cannot be stimulated independently of the
those operated by the mining sector, represent collateral rail sector, but without a substantial home market it is
investment by the latter to enable them to use rail service unlikely to be successful in export markets. The recent
either within their production facilities or to receive investment upturn, by PRASA in respect of recapitalising
raw material inputs and possibly to move bulk output its commuter train fleet and TFR in respect of its Market
consignments to their customers. They represent a strong Demand Strategy, has therefore already started to revitalise
commitment to the rail mode, and railways should therefore the Supply Industry.
nurture such entities to secure their on-going support.
1.2.3. Rail’s Role in South African Socio-
Small private sidings operated by municipalities represent
Economic Development
investments to attract industries to their respective
jurisdictions. As such they are a local consideration without South Africa aspires to position rail as backbone of its
national implications. Their continued existence is a function transport sector. Both freight and passenger rail have already
primarily of the scale of the businesses they serve and their developed significantly and play the following parts in South
developing logistics requirements, not necessarily a function African economic and social development. As benchmark
of developments within the rail mode. Thus many businesses for the backbone role that rail should play, ideally it should
have changed over the decades, some to the extent that provide a quality of service in high density corridors that
they have had to move out of the physical constraints no other mode can match. Quality in this context means
of inner city locations, while others have succumbed to consistently meeting expected or agreed time and capacity
competition and new businesses. The redevelopment of targets, ability to interchange freely and conveniently with
Newtown in Johannesburg and the uplifting of its private other modes when and where necessary, and pricing the
sidings is only one of several such examples. Such events rail offering to win business from road transport, including
are part of normal economic adaptation. Where private
attracting a substantial proportion of door-to-door traffic
sidings continue to play a meaningful role, they have tended
through intermodal alliances with road hauliers.
to gravitate to large businesses that receive and or dispatch
large consignments by rail, and in the context of a Green
1.2.3.1. Freight Rail
Paper on national rail policy are recognised as significant
rail users. Rail freight services move bulk or consolidated freight in
large quantities. Currently the South African mining industry
1.2.2.5. The Supply Industry in particular, relies heavily on rail freight services to move
In addition to the subset of the Rail Industry that is engaged raw materials from pits to ports for export. These exports
in actually delivering freight or passenger rail service, i.e. can generate significant revenue for the country as well as
infrastructure or network operators, and train operators, provide the associated jobs, thereby contributing to the
the suppliers of equipment, consumables, and services economy as a whole. Rail freight services also move freight
to such operators, i.e. the Supply Industry, are also over long distances within the borders of South Africa and
significant stakeholders in railways. Equipment includes to and from neighbouring countries.
11
Table 2: Comparative Rail and Road Market Shares over Time
Market Share of Total

Total Share of Rail Market %
Traffic Metric Year Growth Market %
Market
% Road Rail Corridor Mining Rural
Tonnes, million 2003 1105 - 83 17 24 54 16
2013 1740 57 88 12 18 58 24
Tonne-km, billion 2003 296 - 63 38 27 59 14
2013 441 49 70 31 19 63 19
Table 2 was constructed from values presented in the 1.2.3.2. Passenger Rail
first and tenth Annual State of Logistics Surveys for South Passenger rail services are intended to move large
Africa (CSIR, 2003 and 2013). It is evident that TFR is numbers of commuters or passengers between origins
losing both tonnage and tonne-km market share against and destinations. Commuter rail services in particular make
road in a growing market, a phenomenon that is commonly work centres and central business districts accessible to
considered to indicate inadequate competitiveness. Of the country’s work force, providing affordable mobility at set
particular concern is the distribution within the rail market times. Long-distance services, and regional passenger rail
share. While road-to-rail shift should see TFR emphasise services such as Gautrain, provide mobility to passengers
general freight (Corridor column in the table) and de- over longer distances for travel and tourism, but face stiff
emphasise heavy haul, it is both shedding market share and competition from air and road transport.
shifting the traffic mix from general to heavy freight (Mining
column in the table). This indicates that while its overall PRASA’s Metrorail commuter services currently transport
competitiveness is inadequate, it is more uncompetitive on average 560 million passengers annually in the following
in general freight than it is in heavy haul, a challenge regions, with approximate total annual journey percentages:
that this Green Paper addresses in depth. The practical Gauteng 53%, Cape Town 30%, Durban13%, and Eastern
situation may be worse, because State of Logistics surveys Cape 4%. The average commuter journey is approximately
recognise only three categories of road freight traffic, namely 26 km, and Metrorail achieves 16.8 billion passenger-
Corridors, Metropolitan and Rural. It is common cause that kilometres per year. This is variously estimated as being
side-tipper interlinks have captured significant amounts of between 6% and 12% of the total commuter market.
heavy mineral traffic, which logically should be recorded in PRASA’s Shosholoza Meyl services currently provide long-
the Corridors category for State of Logistics purposes. distance passenger rail travel on five routes between key
destinations in South Africa. It carries less than one million
Transnet provides employment to some 41 000 employees passengers per annum, many of them being migrant
in the rail industry. Of these, 29 225 are permanently workers travelling between rural areas and metropolitan
employed by TFR and 12 428 by TE, both counts from centres in South Africa, as well as migrant workers from
Transnet’s 2014 Annual Report. neighbouring countries. These services contribute to
socio-economic development by supporting the social and
recreational needs of passengers. Economy Class travellers
12
in sitter accommodation contribute 87.5% of the total develop national policy. This mandate places responsibility
revenue of the business. In addition to this basic service, on the Minister of Transport to ensure that any development
Shosholoza Meyl also provides Tourist Class services. and implementation of national transport policy by the DoT
addresses the mobility needs of all citizens.
PRASA’s Premier Classe trains currently provide air-
conditioned long-distance passenger services on three The Constitution assigns different roles and responsibilities
major rail routes in South Africa as well as baggage and to each sphere of Government. It is important to note that
car transportation. The bus subsidiary of PRASA, Autopax, the South African Constitution has structured Government in
supports these passenger rail operations by feeder and a non-hierarchical and decentralised manner. Government
distribution services. is made up of three spheres, namely the National, Provincial
and Local spheres. They are inter-related and inter-
Following from the Gauteng 25-Year Integrated Transport dependent and each has the power to legislate in its sphere
Master Plan, and noting steadily increasing ridership, of competence.
the Gautrain Management Agency recently appointed a
consortium of transaction advisors to undertake a feasibility With specific reference to transport matters, Schedule 4
study for the possible rapid rail extensions to the Gautrain Part A of the Constitution assigns Public Transport as a
network. Developments such as this illustrate renaissance functional area over which both the National and Provincial
rail ready to assume duty as transport backbone, in this
governments have concurrent jurisdiction, whilst Local
instance for regional passenger transport.
Government has a responsibility for Municipal Public
Transport. The Constitution does not, however, define
1.2.3.3. Liberating Rail
Public Transport nor does it make any reference to rail.
Throughout the years, both passenger and freight rail Nevertheless, it goes without saying that Public Transport
operations have evolved and impacted on South Africa’s in general includes passenger rail, particularly when the rail
socio-economic development. The challenges currently mode is assigned backbone status. Furthermore, although
facing rail have however adversely impacted on its freight rail is not specifically mentioned in the Constitution,
competitive positioning and operational efficiency and have the only functional area that can be regarded as including
prevented developments that would have enabled freight Freight Rail is the category Trade in Part A of Schedule 4 of
and passenger rail to compete effectively in the South the Constitution, which is also a concurrent competency of
African logistics and mobility markets and to support the both National and Provincial spheres.
country’s efforts in export markets. The rail industry can
only fulfil its role if it is able or enabled to do so. The issue In view of the above, it follows that any policy intervention
of inherent railway competitiveness and capacity therefore that is proposed in this Green Paper ought to be cognisant
becomes highly relevant. of the fact that:
1.3. Policy, Legislation and Strategies a) National government has the inherent competency to
develop policy, to plan and to regulate passenger and
1.3.1. The Status Quo freight rail; and
The status quo within South Africa’s transport sector, and
particularly the rail transport sector in the present context, b) Local government has the inherent jurisdiction to
has been informed by a number of legislative and policy regulate laws on municipal public transport.
documents, most of which have been developed since
the advent of a new democratic dispensation, and some 1.3.3. White Paper on National Transport Policy
of which have been inherited from previous dispensations. The White Paper on National Transport Policy of 1996
This section examines the relevance and influence of these asserted the importance of rail for both freight and
disparate pieces of legislation in informing the ongoing passenger transport and was a point of departure for any
development of railways and a National Rail Policy. discussion on national land transport. It set out the vision
for South African Transport as being To provide safe,
1.3.2. Constitution of the Republic of South Africa effective, efficient, and fully integrated transport operations
The Constitution Act 108 of 1996 mandates the President and infrastructure, which will best meet the needs of freight
and other members of Cabinet with the responsibility to and passenger customers.
13
The White Paper located the customer at the core of 1.3.5. Moving South Africa
public transport policy development, which emphasis was
The Moving South Africa (MSA) study of 1998 captured
significant. In particular issues of safety, affordability, quality the essence of the current public transport dilemma. It
and the provision of improved service levels should feature highlights four major drivers which embody the challenge
prominently in the policy formulation process. facing South Africa in respect of public transport, namely:
In addition, the White Paper highlighted Government’s a) Lack of affordable basic access;
requirement for efficiency, integrated operations,
infrastructure, support and sustainability for economic, b) An ineffective public transport system;
social and environmental development.
c) Increasing dependence on cars as a means of mobility;
1.3.4. Southern African Development Community and
Protocol on Transport
d) Sub-optimal spatial planning.
The Southern African Development Community Protocol
on Transport, Communications and Meteorology of 1996, The MSA study offered a resolution to these challenges by
SADC Protocol on Transport for short, was intended to identifying focus strategies for both freight and passenger
establish systems that provide efficient, cost-effective and transport. The identified strategies are expected to bring
fully integrated infrastructure and operations, which best gradual changes to the industry over the short to medium
meet the needs of customers and promote economic term (5 – 20 year period) resulting in improved performance
and social development while being environmentally and and sustainability for the transport industry in South Africa.
economically sustainable.
1.3.6. National Environmental Management Act
The SADC Protocol on Transport has as Integrated The National Environmental Management Act 107 of 1998
Transport and Railways objectives that member States provides for co-operative, environmental governance by
should promote economically viable integrated transport establishing principles for decision-making on matters
service provision in the region and facilitate the provision affecting the environment, institutions that will promote co-
of seamless, efficient, predictable, cost-effective, safe and operative governance and procedures for co-ordinating
environmentally-friendly railway service that responds to environmental functions exercised by organs of State.
market needs and provides access to major centres of
population and economic activity. Among all transport modes and at realistic operating
speeds, rail uses the least energy per unit of freight or
passenger throughput. This Green Paper will therefore,
Of relevance to the current discourse on rail competitiveness
where appropriate, introduce aspects of rail positioning
is the SADC Protocol on Transport objective that member
that will on the one hand ensure maximum alignment
States increase private sector involvement with a view to
between transport activities and rail’s green strengths, and
improving railway network and service standards. Despite
on the other hand ensure minimum environmental impact
South Africa being a key member of the SADC community,
by leveraging rail’s natural symbiotic relationship with
its progress in fulfilling this objective has been limited, among
renewable energy.
others, due to the non-existence of a rail policy and the
fragmented manner in which it has until recently undertaken
1.3.7. National Railway Safety Regulator Act
rail investment. The need to achieve seamless transport
services and revitalise rail transport as contemplated in The National Railway Safety Regulator Act 16 of 2002
this Green Paper, would go a long way towards achieving provides for the establishment of a Railway Safety
Regulator (RSR) as well as safety standards and regulatory
regional obligations contained in the SADC Protocol on
practice for the protection of persons, property and the
Transport.
environment. The RSR Act recognises that safe railway
operations are fundamental to the safety of all persons and
the environment.
14
The RSR is charged with overseeing the safety of railway regions. The transport corridor approach to rail planning
transport while operators remain responsible for such represented a shift to viewing the rail mode in the context of
safety within their areas of responsibility. The Regulator also all other transport modes and services. In some cases, the
has to promote improved safety performance in the railway methodology applied in the Railplan process was extended
transport industry in order to promote the use of rail as a to the rationalisation of bus and taxi routes as well as
mode of transportation. assisting in reviewing a provincial strategic roads network.
1.3.8. National Freight Logistics Strategy 1.3.10. National Land Transport Strategic
The National Freight Logistics Strategy of 2005 envisaged Framework
responding to problems in institutional and regulatory The National Land Transport Strategic Framework 2006-
frameworks, infrastructure, ownership, management, 2011 envisions that, in addition to the appointment of a Rail
operations, skills, financing structures and methodologies Safety Regulator, a strategic rail capability will be developed
for the freight system. This vision requires Government to in the national sphere of government.
take a more interventionist approach to regulating the freight
system, to ensure that individual costs of externalities and Performance regulation will be introduced in the national
inefficiencies are not merely passed on to freight owners or
sphere of government, and devolution, ownership and
even parties outside the logistics chain such as innocent
the involvement of the private sector in operations will be
road users in the case of accidents, but are correctly
clarified. Furthermore, there will be an ongoing programme
allocated.
to progressively effect the recapitalisation of commuter
rail rolling stock and related infrastructure in Priority Rail
This Green Paper recognises the critical role that freight
Corridors as identified in the National Rail Plan.
plays in the socio-economic development of the country
and accordingly sought to customise relevant policy
Local transport plans will inform the national-level institutions
pronouncements made in the National Freight Logistics
responsible for rail service provision. As such there will be
Strategy (NFLS) for inclusion into the National Rail Policy.
close co-operation and information-sharing between the
In this regard a National Rail Policy imperative will be to
ensure that freight rail serves as an appropriate mode and local planning authorities and the authorities responsible for
is enabled to perform the critical role that it should fulfil in rail services in developing the Regional Rail Plans that will
the socio-economic development of the country, whilst form part of the National Rail Plan.
highlighting the need to internalise the externalities of the
road mode. In respect of commuter rail, aspects mentioned above are
underway. The remaining aspects of strategic rail capability
1.3.9. National Rail Plan and the implicit reference to the national rail network and
freight rail are addressed in this Green Paper.
The Consolidated Regional Rail Plan of 2006 had as principal
objective to secure the future of commuter rail in South Africa
1.3.11. Public Transport Strategy
by applying the priority corridor strategy to the rail network
in each of the regions, Tshwane, Wits, EThekwini, Western The Public Transport Strategy of 2007 had two key thrusts,
Cape, and Eastern Cape at that time. It established a set namely accelerated modal upgrading and integrated rapid
of criteria for rail to continue playing a meaningful role as public transport networks. Accelerated modal upgrading
part of the broader public transport system in South Africa, refers to current initiatives to transform bus, taxi and rail
it being essential to identify the circumstances in which rail service delivery in the short to medium term. Integrated
commuter transport can still operate to the technological rapid public transport networks were then targeted to be
strengths endorsed later in this document. implemented firstly in the metropolitan cities, and thereafter
in smaller cities where applicable.
The need to balance the former network oriented approach
with the proposed land use planning approach to defining A key focus area of the Public Transport Strategy is to
rail corridors has meant that varying approaches to the restructure the public transport system to ensure that it
process of corridor definition were adopted in the different meets modern public transport development and passenger
15
needs through skills development and integration among Notwithstanding that, it mentions rail only as an item to take
transport modes, ensuring access for special needs into account regarding transporting of goods by road.
users, improving the network image, deploying Intelligent
Transport Systems (ITS) and Electronic Fare Payment The essence of the NLTA is delineation of responsibilities
(EFP), and improving and expanding long-distance public between the different spheres of government and the
transport services. allocation of land transport functions to the most competent
and appropriate sphere of government, clearly listing for
Unfortunately the Public Transport Strategy foundered what each sphere of government is responsible.
because during implementation energy was focussed
predominantly on restructuring and transforming other Critical for the context of the National Rail Policy is that the
public transport modes, that is bus and taxi services. NLTA envisages that:
Where rail was considered, it was simply taken as a given
and accorded the status of backbone of public transport a) National government is responsible, among other, for
without making material effort to upgrade it. This led to the formulation of national transport policy and strategy
massive investment in Bus Rapid Transit systems, with less and playing a coordinating role between provinces to
significant investment in rail services. ensure the effective and efficient execution of land
transport functions between the different spheres of
1.3.12. Legal Succession to the South African Government;
Transport Services Amendment Act
The Legal Succession Amendment Act 38 of 2008 provided, b) Provincial government would formulate provincial
among others, for the establishment of the Passenger Rail transport policy and strategy within the framework of
Agency of South Africa (PRASA), previously known as national policy and strategy, and co-ordinate between
the South African Rail Commuter Corporation (SARCC). municipalities with a view to ensuring the effective and
PRASA was statutorily mandated to, among others, provide efficient execution of land transport in the province;
rail commuter services within, to and from South Africa, whilst
in the public interest and the long haul passenger rail in
accordance with the principles of the then NLTTA. c) Local government would similarly develop their land
transport policies based on the national and provincial
One outcome of the Legal Succession Amendment Act guidelines.
was the vesting of ownership of passenger rail infrastructure
and rolling stock assets in PRASA, with Metrorail and Notwithstanding the above assignment of functions
Shosholoza Meyl both being divisions of PRASA operating to specific spheres of government, the NLTA further
the commuter rail and the long-distance passenger rail contemplates competent spheres of government assigning
services respectively. functions to others, or requesting assignment of functions
from others.
1.3.13. National Land Transport Act
1.3.14. Industrial Policy Action Plan 2014/15–
The National Land Transport Act (NLTA) 5 of 2009 is a
2016/17
codification of certain principles as articulated in the White
Paper. It defines Land Transport as The movement of The Industrial Policy Action Plan 2011/12–2013/14 identified
persons and goods on or across land by means of any locomotives, coaches and carriages related to Transnet
conveyance and through the use of any infrastructure and and PRASA rolling stock programmes for designation as
facilities in connection therewith. strategic fleets. Since then, diesel and electric locomotive
production has been established at Transnet Engineering’s
This is a clear indication that, despite the NLTA being Koedoespoort works, and following Transnet’s order for a
mostly utilised to regulate public transport, its ambit is further 1064 diesel and electric locomotives in 2014 (later
increased), production is scheduled to be established at
not limited only to public transport: It is rather intended to
TE’s Durban works.
regulate both passenger and freight transport, rail included.
16
High logistics costs and economic infrastructure blockages It notes that although rail is the ideal mode of transport for
limit South Africa’s economic development, thus impeding large, uniform freight travelling further than 400 kilometres,
industrial development and competitiveness. The costs of currently about 89% of all freight measured by total tonnes
logistics as a percentage of total GDP have risen by 0.7% to is conveyed by road. Emphasis will therefore be placed
12.6% in 2011, and are estimated to have risen to 12.8% in on total system efficiency to maximise the strengths of
2012. Transport costs escalated by 24% between 2010 and different modes, cut inefficiencies and reduce disparities,
2011, while a further increase of 10.3% is estimated to have all with least environmental, social and economic cost.
taken place between 2011 and 2012. Its contribution to Furthermore, limited capacity on existing rail lines moving
overall logistics costs in 2012 is 61%, which is the highest it minerals commodities is stifling growth.
has been in the past nine years, and also significantly higher
than the global average. Most importantly, however, the 1.3.16. The New Growth Path for South Africa
current 70/30 road and rail split has to be reversed towards
The New Growth Path sets out key policy and planning
the historical 30/70 split in order to give further impetus
priorities that, among others, would create workable urban
to the development of a better rail infrastructure, sharply
transit solutions by increasing investment in public transport
reduce operational inefficiencies and create much more
and resolving existing public transport policy issues,
robust and efficient linkages into neighbouring markets.
devolving transport management to local government,
Better logistics performance is strongly associated with
providing incentives for public transport use and renewing
trade expansion, export diversification, ability to attract
the commuter train fleet. The latter intervention is already
foreign direct investment and economic growth. This Green
underway, with the first commuter vehicles expected to
Paper sets out an investment-led intervention to achieve
arrive in 2016, and new mainline passenger locomotives
this road-to-rail shift, and to position rail to lower transport
currently being delivered. Regarding freight, it envisages
and logistics costs.
strengthening and optimising freight corridors which, given
the huge resources needed to improve performance, would
1.3.15. National Development Plan 2030
need development of effective partnerships between public
The National Development Plan proposes to invigorate and private sectors, and healthy competition among service
and expand the economic opportunity through investment providers. The freight corridors identified for expansion
in more infrastructure, more innovation, more private and improvement are Durban-Gauteng, the coal transport
investment and entrepreneurialism. It envisages several corridors from Waterberg to domestic power generators and
interventions that involve contributions from rail, which Richards Bay, and the North-South corridor from Durban to
include expanding infrastructure, transitioning to a low Dar es Salaam including rail linkage. Its proposals envision
carbon economy, and transforming urban and rural spaces. strategies for improving logistics, including integrated road
It anticipates that by 2030 investments in the transport and rail systems across the continent, and more efficient
sector will ensure that it serves as key driver in empowering rail links to the coast. This Green Paper develops strong
South Africa and its people, enabling improved access to arguments for repositioning South Africa’s rail sector to do
economic opportunities, social spaces and services; and just that.
supporting economic development through the movement
of goods, facilitating regional and international trade, greater
mobility of people and goods, and transport alternatives
that support minimised environmental harm.
17
Chapter 2
Global Experience and South Africa’s Rail Challenges
2.1. Global Experience 2.1.1.1.2. Emergence of New Growth Curves and

Institutional Arrangements
2.1.1. The Railway Renaissance
Notwithstanding the aforementioned pessimism,
2.1.1.1. Introduction commercially successful high-speed passenger trains
eventually emerged in the 1960s. Heavy haul unit trains
The following sections examine the railway renaissance,
conveying bulk commodities followed in the 1970s; then
a fundamental repositioning of railways in countries that
double-stack container trains in the 1980s. Finally in
recognised the advantages of exploiting rail’s inherent
the 1990s, economic globalisation stimulated intense
competitive strengths, and which made the requisite
competition among urban rail suppliers and strong demand
investment to enable railways to take effective, strong
from burgeoning cities, resulting in exponential growth in
positions in their national transport tasks.
both steel-wheeled and rubber-wheeled Urban Guided
Transit. The accumulation of these four events, spanning
2.1.1.1.1. Rail’s First Rise and Fall
merely twenty-five years in two centuries of railway history,
Railways originated during the early 1800s free-for-all has been recognised as the railway renaissance. It set
Industrial Revolution, when whoever could raise capital railways on new growth curves in each of the High-Speed
and acquire right-of-way could build a railway. Thereafter, Intercity, Heavy Haul, Double Stacking or Heavy Intermodal,
first generation railways followed a rapid growth curve to and Urban Rail market spaces, in those countries that
eventually dominate land transport. As that growth curve exploited one or more of these inherently competitive railway
matured in the lead-up to World War II, their potentially sub-modes. In the decades that followed, investment in and
excessive economic power had escalated to the point competition from modes other than rail increased apace,
where most governments had either nationalised or substantially widening differences between railway leaders
regulated railways under their jurisdiction. Consequently, and followers.
by the mid-1950s railway objectives in many countries
had become couched in social terms, while absence of The railway renaissance once again altered the prevailing
competition stifled adaptation to opportunities and threats institutional arrangements. The free-for-all early adoption
from respectively suppliers and customers. phase, followed by the regulated or nationalised mature
phase, ultimately made way for contemporary rail
Comfortably cosseted in their nationalised or regulated revitalisation. Railway renaissance requires substantial
shelters, such railways lost their ability to compete with investment in one or more of the abovementioned four
other aggressively advancing transport modes. Post-World inherently competitive sub-modes to achieve modal shift
War II civilian spin-offs from military technologies, together from both air and road to rail, with mounting evidence
with shifting economic, political and social preferences, that long-distance rail land bridges are able to compete
tipped the land transport competitive balance from rail with maritime transport. Such large investments frequently
to road. Post-war reconstruction introduced motorways exceed the funding ability of state-owned railways, so a
that supported strong competition from private cars and range of public private partnership funding instruments has
road hauliers. First attempts at high speed rail failed due evolved. The resultant admission of multiple participants
to not comprehending the nature of the challenge: Railway to a formerly monolithic sector has introduced a need to
technology appeared to have reached a ceiling; hence revise institutional arrangements, resulting in two new
innovators on both sides of the Atlantic pursued alternatives of regulatory forms emerging, namely railway economic
such as aircraft-inspired guided surface transport systems. regulation and railway safety regulation. Safety regulation
By degrees, many stakeholders lost faith in the rail transport is common-place in the railway world and already exists in
mode. Their pessimistic perception, and in many cases the South Africa.
reality, was that, one-and-a-half centuries after naissance,
railways had entered the terminal decline phase of what To summarise, revitalisation moves railways into renaissance
with the benefit of hindsight turned out to be only a first through combining public and private funding to implement
life-cycle curve. one or more of Heavy Haul, High-Speed Intercity,
19
Heavy Intermodal and contemporary Urban Rail. Some total system efficiency to maximise the strengths of different
revitalisation interventions optimise resource allocation and modes and cut inefficiencies. As a corollary, renaissance
operating efficiency by introducing competition. Others rail as a mode that is able to compete aggressively in
nurture developmental objectives by appropriate investment high volume corridors is, by the same token, unsuited to
and economic regulation. The following sections describe compete effectively in low volume corridors, and should be
key aspects of the inherently competitive sub-modes and phased out there.
institutional arrangements appropriate to them.
2.1.1.2. Inherent Railway Competitiveness
2.1.1.1.3. Implications for Rail - Road Modal Split 2.1.1.2.1. Three Perspectives on Competition and
As the world’s railways increasingly changed from regulated Competitiveness
institutions to revitalised institutions, they have inescapably The following three perspectives on competition and
found themselves drawn into a new global transport order. competitiveness aid assessing the quality of fit between
Since the 1950s, road has grown to become the world’s railways and their stakeholder environment. The first
confident, ubiquitous door-to-door transport mode, for concerns a railway’s ability to compete effectively against
both freight and passenger traffic, ultimately only limited other transport modes in its business arena. Just like
by distance from origin to destination or by intervening those from other transport modes, railway operators are
geographical barriers. By comparison with rail, road’s not all equally competitive. To illustrate, the typical 1950s
higher freedom of movement endows it with both inherent two-axle lorry powered by a non-turbocharged engine is
strength and inherent weakness. While its inherent strength uncompetitive against a contemporary seven-axle interlink
of ubiquitous access is frequently invoked to trump rail’s powered by a turbocharged engine. Operators that rely
inability to match that access, door-to-door service requires on inappropriate or out-dated technologies are inherently
that all ‘doors’, ranging from, say, those of a humble rural less competitive than those that progressively implement
store, to those of a busy distribution centre, be connected appropriate or contemporary technologies. From the
by roads that support the same maximum vehicle axle foregoing perspective this Green Paper infers the existence
load. In practice it is not economically viable to build all of the construct Inherent Railway Competitiveness. Thus
roads to support high axle loads, while ubiquitous access light-axle-load low-speed trains on track alignments built
requires diverse vehicle types and operator abilities to share to supersede ox wagons and stage coaches are inherently
roadways. The road transport mode’s inherent weakness is uncompetitive against contemporary road transport.
thus comparatively low, one-size-fits-all, limits on axle load Inherent competitiveness excludes all attributes that do not
and speed, a necessary sacrifice to achieve ubiquitous inhere in a particular mode but are common to all transport
access. modes, for example management competence and
information technology which, all things being equal, cannot
Concurrently, railways have had to adapt from being the influence competitiveness of one mode vis-à-vis other
dominant land transport mode, to one that defines and modes. One can thus reason that the notion of a railway
dominates the four inherently competitive market spaces of being sustainable simply because it is there is unfounded.
the railway renaissance, namely Heavy Haul, High-Speed Sustainability only follows from inherent competitiveness,
Intercity, Heavy Intermodal and contemporary Urban Rail. which will be developed in the next section.
There railways exploit their heavy axle load and high speed
capabilities to establish substantial competitive distance The second perspective concerns the rules of engagement
between them and the road mode. These attributes have among competitors in a defined arena, for example the
endowed the rail mode and road mode with competencies South African long-distance transport market. It addresses
that are both complementary, where intermodal movements competition among an array of entities engaged in peer-
maximise the contribution of each mode, and competitive, to-peer competition for a share of that market, where an
where one or other mode inherently wins the business. It inherently uncompetitive entity would be unfit to participate,
is therefore crucial to understand how to position rail and and would distort the ultimate outcome if it did. This is the
road relative to each other, to respect the NDP emphasis on domain of transport economic regulation.
20
The third perspective concerns arranging the arena within high speed. By contrast, roads need to support unguided
which competitors are set to engage, in the present context vehicles over the full width of two or more lanes. The cost
by reference to their contribution to economic growth and of supporting heavy axle loads on such wide surfaces is
social development goals. This is the domain of national prohibitive, whereas the cost of carrying much higher axle
transport- and rail policy. The Green Paper uses the loads on steel rails is economically viable provided that traffic
construct Inherent Competitiveness as a powerful tool for volume is sufficiently high. Similarly, rail’s secure guidance
developing insight into South Africa’s railway challenges. raises its safe speed limit to very much higher than that
of road’s simple friction guidance between wheel and road
2.1.1.2.2. Inherent Railway Competitiveness and Rail’s surface. The rail and road transport modes thus naturally
Genetic Technologies serve two very different market domains. If rail does not
exploit sufficiently high axle load and/or sufficiently high
Positing that technologies that do not distinguish one
speed, it cannot establish sufficient competitive distance
transport mode from another cannot increase the
between it and road to compete effectively. Plotting the
competitiveness of one relative to another, a research
above two genetic technologies against one another
stream by Van der Meulen (1997, 2006, 2007, 2009) and
defines the four market spaces illustrated in Figure 1 below.
Van der Meulen & Möller (2006, 2008, 2012), published
in peer reviewed papers at international conferences,
described and examined inherent competitiveness with Figure 1: Railway Market Spaces
respect to the technologies that distinguish railways from all Heavy Axle
Load
other transport modes. The above-mentioned publications
used the term Genetic Technologies to describe three such Heavy Double
technologies. Haul Stacking
Genetic
The competitiveness of guided surface transport, of Technology
which rail is a subset, in relation to other transport modes SUPPORTING
General
is determined by its degrees-of-freedom-of-movement. Freight
Traditional High
Three degrees-of-freedom-of-movement (e.g. aerial and Passenger Speed
Passanger
submarine transport) offer high spatial mobility, but at
Urban
relatively high cost. Two degrees-of-freedom-of-movement Rail
Light Axle
(e.g. unguided surface transport such as the road mode) Load
Low High
offer lower surface mobility at lower cost. One degree-of-
Speed Genetic Speed
freedom-of-movement (e.g. guided surface transport such Technology
as railways) offers only limited, linear mobility, back and GUIDING
forth on a guideway, but at comparatively low cost in high-
To indicate the boundaries between these market spaces
volume corridors that can justify the cost of the guideway.
in terms of industry-leading practice, heavy axle load is 26
Guided surface transport’s limited mobility impairs its ability
tonnes or more, while light axle load is anything less, and
to compete directly with other modes that feature more
low speed is expressed in tens of km/h, while high speed
degrees-of-freedom-of-movement, and hence offer greater
is expressed in hundreds of km/h. Thus low speed for
mobility that supports door-to-door transport and more.
heavy haul means up to 80km/h, high speed for double
Rail must therefore offer compensating advantages to
stacking means 120km/h and high speed for passengers
compete successfully with the latter modes.
means 300km/h or more. Railways achieve further leverage
The vehicle-guideway system ensures application of in all four market spaces by combining vehicles into trains,
vertical loads and lateral or sideways loads at precisely and a genetic technology named Coupling: It enables rail to
securely located contact patches. In the case of railways, achieve unmatched throughput capacity in both freight and
steel-wheel-on-steel-rail contact mechanics develop passenger service.
vertical and lateral force components, representing two
genetic technologies known respectively as Supporting The Supporting, Guiding, and Coupling genetic technologies
and Guiding: They enable respectively heavy axle load and uniquely distinguish rail from all other transport modes and
21
enable it to compete successfully against two or three Africa’s branch lines, with axle loads in the range 16 - 18½
degrees-of-freedom-of-movement modes that offer higher tonnes.
mobility: Its natural strength is to serve as heavy duty, high
speed carrier in high-volume corridors where rail’s genetic Urban rail positioning criteria differ in so many respects from
technologies position it intensely competitively against other those of freight and long-distance passenger rail that it is
transport modes in the Heavy Haul, High-speed Intercity a distinct rail sub-mode. Thus although urban rail resides
and Heavy Intermodal or double stacking market spaces, in the potentially weak low-axle-load low-speed market
in which it has already demonstrated robust sustainability space, the Coupling genetic technology combines vehicles
around the world. Rail’s inherent competitiveness is into trains to reduce the effective headway between them.
determined by the extent to which it exploits its genetic For example, eight-car trains at 120 second headways
technologies to achieve heavy axle load, high speed and equates to an average 15-second headway between
long trains. Recognising and understanding these genetic cars, while bus rapid transit systems generally operate at
technologies are important when examining ailing railways headways upwards of 25 seconds. Rail’s short average
and designing interventions to revitalise them. headways deliver high throughput capacity to neutralise
its otherwise weak competitiveness in this market space,
making it a popular and valuable solution in many cities.
2.1.1.2.3. One Potentially Weak Market Space
Recognise nevertheless that rubber-tyred guided transit
The fourth railway market space that combines light solutions, such as automated guided transit, monorail, and
axle load and low speed is potentially weak because it bus rapid transit have started encroaching on what has until
does not fully exploit rail’s Supporting or Guiding genetic recently been rail’s eminent domain, as new investment has
technologies. Further failure to exploit the Coupling genetic been channelled to support these variants. For brevity, this
technology exacerbates that weakness. Trains conveying document will further use the term urban rail only, but it
general freight, traditional long-distance passengers, e.g. includes the abovementioned variants where the context
Shosholoza Meyl, and commuters, e.g. Metrorail, exemplify permits. Thus, as for high-speed passenger, heavy haul and
operations in this space. Where they cannot offer significant heavy intermodal, urban rail’s natural strength is to serve
advantage over competitive modes, especially road, they as a heavy duty carrier in high volume corridors. Outside
inevitably struggle and will probably fail if they have not that space, it remains vulnerable to competition from other
already done so. Their lack of inherent competitiveness guided transit solutions or, worse, competition from buses,
clearly explains the relentless decline of South Africa’s cars, and minibus taxis. Other guided transit solutions
railways in this market space. should therefore be considered for passenger throughput
capacities in the space below full strength heavy rail, more
Around the world road vehicles are built to axle load limits of so in the light of rail’s energy efficiency that is mentioned in
around 9 tonnes - a basic parameter that facilitates design the next section.
and manufacture of highly competitive road vehicles for the
global market. The lower the rail axle load in a particular 2.1.1.2.4. A Frugal Transport Mode for an Energy-scarce
country, the smaller the competitive distance between rail Future
and road, and the more road encroaches on rail’s domain. Aligning with the NDP’s objective of transitioning South
For general freight services, the relatively low rail axle load Africa to a low carbon economy, rail is recognised as
that South Africa’s narrow track gauge allows (generally an energy efficient transport mode, thanks to its genetic
20 tonnes on its core network), puts it at a competitive technologies. It is therefore valuable to contextualise this
disadvantage to countries whose railways support higher attribute to appreciate what role railways should fulfil in an
axle load. Major standard gauge railways work in the range energy-scarce future.
25 - 40 tonnes, with assertive railways in China, India, North
America, and Russia, which move over half the world’s rail The Supporting genetic technology requires a strong
freight, already operating in or aiming for 30 - 32½ tonnes wheel - rail interface to sustain heavy axle loads, and rail’s
for general freight and 30 - 40 tonnes for heavy haul. The steel-on-steel system provides just that. The wheel and rail
lack of competitive distance is even more acute on South deflect minimally to develop a small contact patch between
22
them, and steel-wheel-on-steel rail rolling resistance, and speed, increasing to ≈80% at 100km/h. Relative to aviation,
therefore energy consumption, is very low. By contrast, a resistance is also always lower although rail cannot match
rubber wheel on a road deflects much more to develop a its top speed. Nevertheless, rail can compete on centre-
large contact patch, which increases rolling resistance and city to centre-city journey times, e.g. the current Beijing
hence energy consumption by comparison with rail. to Wuhan schedule averages 285km/h over 1229km, a
challenge to aviation when accounting for time to commute
The Guiding genetic technology supports high maximum to the airport, check in, check security, reclaim baggage,
speed, which allows more potential energy to be converted and commute to destination in addition to scheduled flying
to kinetic energy and vice versa as speed varies over time.
undulating terrain, thereby reducing both traction energy
consumption and braking energy dissipation. High speed Rail’s low rolling resistance causes propulsion and braking
also reduces journey times, and hence reduces the period demand to swing widely over undulating gradients, and
during which heating, ventilation, air conditioning and ability to transfer energy to and from its environment is
lighting must operate. Consequently high speed passenger therefore advantageous. Railways and renewable energy
trains actually consume less energy per passenger for a are thus natural allies, particularly when both are linked to a
given journey than conventional passenger trains (Garcia, smart grid that can store surplus energy when necessary.
2010). Although railway electrification infrastructure is expensive,
The Coupling genetic technology averages gradients under it need be confined only to the route defined by the track.
long trains and therefore requires less traction energy input Rail should therefore be the transport mode of choice when
and less braking energy dissipation, particularly for heavy planning for an energy scarce future, whether for freight,
freight trains that run at comparatively low speed. It also long-distance high speed passengers, or urban commuters.
reduces aerodynamic drag because the frontal area of a
train in relation to its length is small compared to other
2.1.1.2.5. Significant Renaissance Events
transport modes - e.g. the ratio frontal area/vehicle length
for a TGV Duplex train is one tenth that for an Airbus 380 This section identifies significant railway renaissance
aircraft, both double decked passenger vehicles. markers and perspectives that sketch a landscape within
which to imagine and conceive solutions for South Africa’s
Rail undercuts the resistance to motion of all other transport railway challenges.
modes and therefore inherently occupies an energy
consumption sweet spot that other transport modes cannot High-speed Intercity emerged in Japan in 1964, the world’s
match. Relative to pipeline, it has lower resistance from first standard gauge high-speed railway that ultimately
speeds higher than ≈3km/h. Relative to maritime, it has changed that country’s economic geography. The concept
lower resistance from speeds higher than ≈40km/h. Relative spread to Western Europe in 1981, then to the rest of the
to road trucks, it always has lower resistance, ≈50% at low world, including China, Korea, Morocco (under construction,
23
currently suspended due to expropriation issues), Russia, aspirations to raise competitiveness through innovation.
Saudi Arabia (under construction), Taiwan, Turkey, and High-value manufactured goods are low density and only
the United States. Significantly for South Africa, high- achieve low axle load when packed into containers and
speed rail has spread or is spreading to all BRIC countries. single-stacked on railway wagons. Such traffic does not
Brazil is seeking to implement a Rio de Janeiro–São exploit rail’s Supporting genetic technology, and is therefore
Paulo–Campinas PPP project, but after two unsuccessful vulnerable to competition from other modes, particularly
requests for proposals and postponement of a third, it has road. Double stacking containers on railway wagons
not yet got traction. Russia already operates 250 km/h increases the axle load of low density freight to heavy haul
trains on upgraded lines from Moscow to St. Petersburg level, thereby exploiting the Supporting genetic technology
and Nizhny Novgorod. India has established a High Speed and extending freight rail’s inherent competitiveness to high-
Rail Corporation to develop and implement high speed rail value, low-density goods, a breakthrough achievement
projects, on existing as well as new rail corridors. China that had long eluded it. This sub-mode has subsequently
introduced high-speed rail service in 2007 and since then spread to all countries in the North American Free Trade
has built the world’s largest network at over 19 000km in Agreement (Canada, Mexico, and United States), Australia,
service, more than the rest of the world’s high speed rail the Gulf Cooperation Council states (Bahrain, Kuwait,
network combined. High-speed railways relieve problems Oman, Qatar, Saudi Arabia and United Arab Emirates),
associated with developed countries, such as congestion China, India and Panama. However, narrow track gauge
or saturation of air and road corridors, and stimulate
cannot provide adequate stability against overturning of
development opportunities in less advanced countries by
high-centre-of-gravity wagons conveying double-stacked
extending access to business and social opportunities.
containers, hence South Africa cannot enter this inherently
Appraisal criteria for high-speed rail proposals should
competitive rail market space where rail has demonstrated
therefore reflect the development level and aspirations of
ability to attract general freight traffic from road.
the host country. South Africa’s narrow track gauge cannot
support contemporary high speed trains, for which the
Urban Rail grew rapidly following economic globalisation in
entry level has already escalated to 300km/h and further
the 1990s. Rationalisation of the supply industry by more
increases are within reach. Indeed, construction of Japan’s
intense competition among system integrators (that is
high-speed standard gauge Shinkansen network followed
entities that supply turnkey rail solutions such as Gautrain)
from an appreciation that its pre-existing narrow gauge
stimulated the sub-mode through more competitive pricing.
railways (1 067mm, as South Africa) could not support
As example, the European Union removed restraints on
the level of intercity mobility that it deemed necessary to
own-country purchases in favour of competition among
develop the country.
suppliers in the entire bloc. Economic globalisation also
accelerated urban agglomeration in developing economies,
Heavy Haul was recognised as a distinct railway sub-mode
thereby substantially expanding the size of the urban rail
by Railway Gazette International in 1972. The International
market. The combination of lower prices and a larger market
Heavy Haul Association, which currently has nine members
including South Africa, was established in 1976. However, exponentially increased the number of new projects. The
narrow gauge impedes attaining industry-leading heavy following two examples manifest the urban aspect of rail
haul inherent competitiveness. It limits axle load to 30 renaissance. Over the past ten years, Chinese cities with
tonnes, whereas standard gauge competitors achieve up to urban rail have grown from nine to 39; during the same
40 tonnes and, very importantly for heavy haul, locomotive period, Indian cities with urban rail have grown from three
traction motor performance is superior by the ratio of track to nine (Railway Directory, 2005, 2015). These examples
gauge, i.e.1 435mm/1 067mm or 34.5%. This results in include neither cities that have substantially expanded their
narrow gauge heavy haul locomotives attracting a price networks, nor the many examples from elsewhere in the
premium over standard gauge locomotives. world. Never before in the history of railways has such
rapid growth been experienced. Ekurhuleni, Johannesburg,
Double Stacking of containers emerged on United States’ Pretoria, Cape Town and Durban are among the world’s
railways after rate deregulation in 1980 released pent-up 300 fastest growing cities: They would do well to recognise
24
the rapidly expanding contribution of light rail among their of hindsight, and the unfolding of subsequent events,
peers. this cluster comprised what is now known as the BRICS
countries. Its significance in the context of developing a
Urban rail dominates market spaces where rail provides National Rail Policy for South Africa is that it established a
higher capacity than other modes at lower total cost. statistically grounded frame of reference that is free of any
Optimised capacity requires high acceleration and braking bias that might have associated with a cognitively selected
ability within a relatively low maximum speed of ≈80km/h, one. This Green Paper therefore uses the BRIC countries as
to give short link times between closely spaced stations: a valid frame of reference for railway revitalisation in South
Trains with many motored axles but comparatively small Africa. However, there were reasons to believe that this
traction motors meet this requirement. In addition, short cluster might have been unstable, and that it might change
journey times require short station dwell times: Single- over time: The next paragraph examines this possibility.
deck vehicles meet this requirement. Narrow track gauge
does not frustrate these requirements, although standard Replicating the research with an expanded set of descriptive
track gauge potentially achieves a price advantage in the variables and two additional years’ data later identified
global market. PRASA’s current new commuter rolling stock five railway country clusters, named by the researchers
acquisition process is therefore well-grounded in railway Fortuitous Railways, Insecure Railways, Enlightened
renaissance. Railways, Progressive Railways and Assertive Railways
(Van der Meulen & Möller, 2008a). The underlying statistical
2.1.1.3. Selecting a Frame of Reference analysis rested on thirty six variables in groups that
described their Competitiveness, Networkability, Business,
The first challenge in considering the state of railways in
Ownership, Contribution, Society, and Sustainability2. The
a particular country is to find a frame of reference within
Fortuitous and Insecure Railways represented countries that
which to examine it, and to identify possible role models
had not yet commenced investment, reform or revitalisation
for revitalisation. Simply selecting reference countries
to stimulate railway renaissance. They therefore serve no
by outcome without due consideration of the respective
useful purpose as a frame of reference for South Africa, and
underlying drivers can at best be futile, and at worst be
are not considered further in this document. The Enlightened
misleading. Much research on railway positioning has been
and Progressive Railways clusters represented countries
undertaken in particular countries or regions, but it does not
have predictive validity outside its context, and it is therefore
not possible to confidently generalise such findings to other,
2
The full set of variables is Infrastructure Operator Diversity; Train Operator
different settings. To establish a general understanding, it is
Diversity; Information Technology Leverage; Bus-, Car-, and Motorcycle
necessary to research the entire set of the world’s countries Populations; Total Road Network-, Motorways-, and Paved Roads
with railways, using a comprehensive set of descriptive Percentage; Research & Development Level; Relative Maximum Axle
variables1 to ensure that all pertinent considerations have Load; Relative Maximum Speed; Distributed Power Presence; Heavy Haul
Presence; High-speed Intercity Presence; Heavy Intermodal Presence;
been recognised. Such work is rare, but one publication titled
Motive Power Type; Attitude to Competition; Network Coverage;
Railway Globalization: Leveraging Insight from Developed Transport Task-Freight- and Passenger Traffic Volume; Employment
into Developing Regions (Van der Meulen & Möller, 2006), Created; Initiative Source; Narrow-, Standard-, and Broad Gauge;
found among other, a cluster of countries named Railways Networkability; Strategic Horizon; Infrastructure-operations Separation;
Infrastructure- and Rolling Stock Ownership Locus; Infrastructure- and
in Emerging Economies. It comprised Brazil, South Africa,
Rolling Stock Commitment Horizon; Country Name; Economic Freedom;
China, India, and Russia, in that order. With the benefit Population; Gross National Income; Physical Size; Determinism; Climate-
change Position; Infrastructure- and Rolling Stock Investment Capacity;
Stakeholder Satisfaction Level; Service Reputation; Safety Reputation;
1
Variables are measurable attributes of railways and the countries in which Subsidy Influence; and Calendar Year.
they are set. They vary from country to country and from railway to railway,
hence the name variable. Two examples of railway variables are Axle Load, 3
The inapplicability of countries in the Enlightened and Progressive clusters
measurable in tons, and Track Gauge, measurable as Narrow, Standard, as a frame of reference for South Africa is addressed in section 2.1.3.1.
or Broad. Two examples of country variables are Population, measurable 4
As measured by the number of descriptive variables on which each
in Millions of People, and Gross National Income, measurable as USD per country exceeded a one-standard-deviation band around the cluster
Capita per Year. mean.
25
that had already commenced investment and or reform, 2.1.1.4. Institutional Arrangements
with emphasis on introduction of competition within the rail
2.1.1.4.1. A Need for Economic Regulation
sector and had achieved significant railway renaissance3.
The Assertive Railways cluster comprised the United Countries whose railways have participated in the railway
States, China, Switzerland, Australia, Russia, Canada, renaissance have needed to invest in one or more of the
India, Mexico, Brazil, and South Africa, in that order. As Heavy Haul, High-speed Intercity, Double Stacking, and
expected, it had changed. Furthermore, if replicated today, contemporary Urban Rail variants, to transition from the
Saudi Arabia’s recent substantial railway investments would terminal decline phase of their first growth curve to a new
likely also secure it a place in the Assertive Railways cluster. railway growth curve or curves. Governments have often
This cluster once again included the BRICS countries, led the requisite investments but, as contending claims
taken as confirmation that they constitute a valid frame of on State funding have constrained the quantum available
reference for railway revitalisation in South Africa. for railways, public and private sectors have increasingly
shared responsibility for railway investment. In principle,
South Africa clustered with the Assertive Railways by virtue they share responsibility such that each sector bears the
of its heavy haul railways: Without them, it would have risk for investments to achieve its objectives, developmental
found itself in the Insecure Railways cluster. However, when for the public sector, and productive for the private
ranked by assertiveness4, the scores were United States sector. Additionally, several countries have encouraged
20, China 15, Switzerland and Australia 14 each, Russia competition to stimulate effectiveness and efficiency
13, Canada 12, India 8, Mexico 7, Brazil 5, and South Africa within the rail sector, ranging from on-rail competition on
only 3. They present an interesting mix of countries, some open access infrastructure, to parallel competition among
with privately owned and some with state owned railways. vertically integrated railways that serve co-located origins
Competition among railways or train operators is present in and destinations.
some and absent in others, and thus may or may not be a
rail policy issue. Such interventions have stimulated a range of economic
regulation models that reflect the developmental and socio-
The eight highest ranking countries have either standard economic objectives of particular countries, as well as the
or broad gauge track. Ninth-ranked Brazil has a mix of quantum and diversity of funding sources that they can
broad gauge and narrow gauge track, and is substantially muster. A railway economic regulatory function is required,
expanding its broad gauge network to raise the inherent either explicitly in the guise of a statutory body, or implicitly
competitiveness of its railways. If Brazil goes to such lengths in the guise of coherent political will, to ensure that railways
to achieve railway competitiveness and sustainability, how contribute appropriately to the broad economic and social
much more South Africa, which aside from Gautrain’s 80 objectives of a country.
kilometres, has only narrow gauge track? For context broad
gauge railways are at least as competent as standard gauge The foregoing range of considerations has led to the
railways: Increasingly, the former simply use commercially evolution of new intervention- and governance models to
ensure that countries that so desire, move their railways
available standard gauge rolling stock fitted with longer
resolutely onto one or more of the renaissance growth
axles and/or wider bogie frames, so as to leverage the
curves. It is important to appreciate that countries that do
price advantage of standard gauge’s larger market. Broad
not move their railways onto renaissance growth curves,
gauge’s main challenge is networkability: It is therefore
remain in the terminal decline phase of the original railway
significant that Brazil elected to prioritise the inherent
growth curve. No middle ground is evident.
competitiveness of its own railways over connectivity with
neighbouring railways. It is however recognised that such
2.1.1.4.2. Governance Models - Line Haul Railways
an approach may not apply in the South African context
given the strategic importance of rail interoperability and Globally, one can distinguish between two fundamental
interconnectivity to promote trade and facilitate economic governance models, namely privately owned railways and
development in the SADC Region. state owned railways. A private railway is governed like
26
any other private company, subject to the laws of the land. decision-making ability. South Africa’s current freight rail
Beholden as they are to investors and shareholders, they institutional arrangements follow this model, Department of
perform as well as any other private sector enterprise. There Transport being responsible for rail policy and Department
is no statutory impediment to this model in South Africa. of Public Enterprises being responsible for TFR’s positioning
and performance. It would be apposite to examine whether
Governance models for State-owned rail enterprises differ, this arrangement impedes or supports railway renaissance.
although all address common policy and strategic direction
themes, business management, investment, and regulatory Third, the private sector participation model, where
compliance, the latter including safety, competition and government retains ownership or control of some assets
environmental considerations. Each model has advantages through one or more portfolios, but where private sector
and disadvantages in addressing the complete set of entities operate or use railway assets under access or
stakeholder expectations. Governance models for State- concession arrangements. Examples include Australia and
owned railways therefore broadly follow one of three models, the European Union. This is distinct from a totally private
which reflect different heritages, political environments, and structure, where all rail assets were originally owned by, or
ownership structures. They can be described as follows: have been transferred irrevocably to, the private sector.
State ownership incurs additional governance complexity

First, the single government portfolio model, where a ministry
because such enterprises must recognise public policy
(usually a transport ministry, sometimes a railway ministry),
objectives, as well as consider their assigned functional
is responsible for policy development and implementation,
and operational purpose and customer interests. For
as well as for ownership and exploitation, either directly
businesses such as railways, gas, and electricity, which
or through an agency. This model arguably provides the
involve extensive physical infrastructure networks, there
greatest clarity of direction at all levels from strategic to
are further layers of complexity, including public safety,
operational, but may downplay wider policy issues such
competition and security of supply of social services.
as competition, environment, and social equity, when they
Government ownership generally faces two criticisms of its
are the responsibility of another ministry. Examples include
governance. One is budget discipline: Where government
Brazil, where the Ministry of Transport manages railway
cannot be seen to allow services to fail, budget constraints
construction and operating concessions through the
are often not regarded as binding. The other is excessive
National Land Transport Agency; Russia, where the Federal
political influence: This can sacrifice strategic direction to
Agency for Rail Transport is a division of the Ministry of shorter-term considerations.
Transport; India, where the Indian Railway Board functions
as a government ministry; and China where, although they Private sector ownership also faces governance
have been organizationally separated, the former Ministry weaknesses. In responding to investors and shareholders,
of Railways, now the Ministry of Transportation, and China short-term decisions relating to return on investment may
Railways Corporation still share the same street address. drive them. Nevertheless, railways are capital intensive
Although statistics-wise South Africa clusters with the BRIC entities and therefore in business for the long run: The
countries; governance-wise it follows the next model, the heavyweight railways of the North American Free Trade
multiple government portfolio model. Agreement have consistently demonstrated that they can
and do balance short term investor satisfaction against
Second, the multiple government portfolio model, where creation of long term value to ensure their sustainability.
responsibility for policy development and ownership is split Potential conflict between shareholder value and public
between more than one government portfolio, such as service obligations is another perceived weakness: It is
Infrastructure and Transport. In addition, other agencies and therefore important to appreciate that the only reasonable
regulators may pronounce on governance aspects such as obligations on private railways are those that in law apply to
safety, investment, competition, and planning, although they all other businesses in the same jurisdiction.
may also reside in a transport ministry structure. The multiple
government portfolio model arguably clarifies diverse policy Unduly fragmented railway systems may lead to risk of
issues, but may adversely affect strategic coherence and multiple or unstable governance arrangements. This was
27
illustrated in the United Kingdom, where the Office of and operate rail and road services, undertake long-term
Passenger Rail Franchising, established to implement and planning and raise funding, for aggregate populations of ten
manage passenger rail franchises, was replaced in short million or more. Individual operators may retain their legal
order by the Strategic Rail Authority (SRA), with a broader person, but function within a framework developed by the
remit. Not long thereafter, the SRA’s responsibilities were coordinating body.
incorporated into the Department for Transport. These
changes followed from the diverse needs of passengers, Countries that plan, fund, and provide urban rail services
freight operators and network managers not being co- at national level are rare. South Africa is one of them,
ordinated between the different institutions responsible for Russia another. It is therefore interesting that one of the
governance. Ultimately, governance responsibilities were few, India, is in process of devolving suburban services to
consolidated among Department for Transport, Office of local corporations, first in Mumbai, and then Hyderabad,
Rail Regulation, and the boards of the entities. Ahmedabad, Kolkota and Chennai. The intervention is
intended to bring together suburban services, metro, and
To place the foregoing organisational churning in other infrastructure under a single strategic body to provide
perspective, it is salutary to appreciate that, despite the faster, more efficient and affordable transport services, even
generally weak inherent competitiveness of UK line haul though the various networks will remain independent in
railways in the mid-1990s, the initial intervention to address terms of ownership and operation.
the former British Rail financial woes was to reform the
sector by deconstructing it into economically rational Whereas the narrowly defined urban rail sub-mode
entities. Except two renaissance initiatives, High Speed subsumes the steel tyred variants heavy metro, automated
1 (the 108km London to Channel Tunnel route, or 28km light metro, and light rail, the broader urban guided transit
longer than Gautrain for South Africans), and High Speed sub-mode subsumes additionally the rubber-tyred variants
2 (the 192km London to Manchester and Leeds route) automated guided transit, monorail, and bus rapid transit.
funded by grant-in-aid from the government, investment BRT’s narrow, robust runway that supports its relatively
initiatives have generally renewed or refurbished rail to heavy 12-13 tonne axle load, plus virtual guidance by lane
existing standards rather than raising performance to raise tracking and docking systems, justify its inclusion in urban
inherent competitiveness. Meanwhile, reform continues, guided transit. Bi-articulated buses, such as those operated
and will likely continue until the question of inherent by Buscor in the Lowveld region of Mpumalanga Province,
uncompetitiveness has been resolved. even emulate rail’s coupling genetic technology. Rubber-
tyred variants may be more suited to some applications than
2.1.1.4.3. Governance Models - Urban Rail steel-tyred variants, while light rail may be more suited to
some applications than heavy rail variants: Local authorities
In most countries, local authorities are responsible for
that are empowered to determine their own solutions are
all urban rail management functions from operational to
in a position to optimise their own particular mix of public
strategic, enabling them to plan, fund, and deliver integrated
transport modes.
public transport services. Where large agglomerations
can benefit from integrating public transport across local
jurisdictional boundaries, they commonly establish a higher- Urban rail is by nature vertically integrated. It is typically
level coordinating body. A few examples are Metrolinx in implemented in settings where other solutions such as
Canada’s greater Toronto and Hamilton area, Regional buses and possibly bus rapid transit have already reached
Transportation Authority of North-eastern Illinois in the United their capacity ceilings. New projects therefore enter settings
States’ Chicago area, and Zweckverband Verkehrsverbund where competition from existing modes already exists.
Rhine-Ruhr in Germany’s Ruhr area. Coordination is Urban rail systems are often isolated from rail operations
bottom-up, the organizational structure rising no higher on other networks, with no need to or possibility of
than is necessary to achieve its purpose. Appreciate then interoperating with other operators. In addition, the intensity
that the English translation of Zweckverband, functional and scale of many operations would make rail competition
association, connotes bottom-up coordination rather than impractical. For these reasons urban rail systems have
top-down prerogative. Such bodies typically coordinate been excluded from EU directives on vertical separation.
28
Urban rail governance models should therefore respect the have probably either not been liberated or have inherently
nature of the sub-mode. uncompetitive technologies.
2.1.1.5. Generic Outcomes 2.1.2. Examples of Realising Railway Renaissance
At face value, rail revitalisation outcomes have not been 2.1.2.1. The Value of Comparisons
as consistent or predictable across all interventions as Comparison is a valuable tool with which to identify and
their promoters might have wished. For example, the examine the risks and opportunities that are likely to
European Union’s open access freight rail intervention associate with a proposed intervention. Railways in many
has not met expectations, whereas a similar intervention countries have already initiated interventions to adapt to a
on the Australian interstate standard gauge network did. future they have envisioned. However, some interventions
Institutional arrangements in the United Kingdom have not have evidently been more successful than others. It is
yet bedded down, whereas other European countries have therefore valuable to probe deeper than obvious differences
made more visible progress toward a stable end state since such as ownership structure and institutional arrangements.
liberalisation started in 1991. When comparing the outcomes of particular interventions,
it is important to examine their settings for alternative
In general, one can explain such differences in terms of explanations. The notion of inherent competitiveness is
omitted variables. By now it should be evident that very many useful for this purpose, because it frequently explains
drivers combine to determine the development trajectory of differences between outcomes. Thus, when comparing
a country-and-railway combination. For example, thirty six the outcomes of interventions among countries, indicators
descriptive variables were used to examine fit between the of inherent uncompetitiveness, such as low axle load, low
world’s railways and their setting5. To zoom into differences speed, and short trains tend to associate with outcomes
between only two interventions, say, vertical integration that do not live up to expectations, irrespective of the type
or vertical separation, and private ownership or state of reform.
ownership, while disregarding thirty-four other descriptive
variables that also influence the outcome, is to court 2.1.2.2. Two Development Streams
misunderstanding. As a minimum, such comparisons ignore
To develop a role model for moving railways in South
the critical contribution of inherent railway competitiveness.
Africa into renaissance, it is useful to review how other
Recognising its indicators leads to the profound insight that
countries have set about the process. Noting that the
inherently competitive railways generally succeed despite
Assertive Railways cluster represented an interesting mix
their institutional and ownership arrangements, whereas
of countries6, some with privately owned and some with
inherently uncompetitive railways generally fail whatever
state owned railways, and that competition among railways
their institutional and ownership arrangements.
or train operators associates with private ownership, it is
necessary to separate out distinctions among members
By contrast, noting that sound investment raises inherent
of that cluster. By inspection, it is evident that the form of
competitiveness and positions railways on new growth
ownership associates with two different development levels.
curves, investment-led interventions more consistently
There are thus two paths by which to develop assertive
meet expectations than reform-led interventions. This
railways.
explains, for example, why rail freight in Europe has
become fragile—reforming the industry but making no
There is no established convention for categorising
investment in raising its inherent competitiveness was
developed and developing countries in the systems of
bound to disappoint; as well as why Europe’s passenger
the International Monetary Fund, United Nations, World
railways have flourished—substantial investment in raising
Bank, or World Trade Organization, nor are those the only
passenger inherent competitiveness through high speed
designations used. Notwithstanding that, to distinguish
railways was bound to succeed. Dysfunctional railways
between two fundamentally different approaches to
5
See section 2.1.1.3. 6
See section 2.1.1.3.
29
stimulating railway renaissance, it is useful to consider what is priced competitively against access to infrastructure of
are commonly known as developed countries on the one other transport modes.
hand, and developing countries on the other hand. At the
time of writing South Africa and its BRIC reference group Japan’s three Shinkansen or high-speed railway operators
were fortuitously all categorised as developing countries have been privatised and are now listed on the Tokyo Stock
(Developing country, 2015). Exchange as Central Japan Railway (CJR), East Japan
Railway (EJR), and West Japan Railway (WJR). Each of them
also owns a narrow gauge network, on which it operates
2.1.2.3. Developed Countries
single deck electric and diesel multiple unit passenger trains
Railway renaissance is well advanced in many developed over short distances at relatively low speed, so narrow
countries or regions, e.g. Japan, the North American Free gauge does not hinder them. The former Japanese National
Trade Agreement, the European Union and Switzerland, Railway networks on the islands of Hokkaido, Kyushu, and
Australia, as well as members of the Gulf Cooperation Shikoku, as well as the former freight operations now known
Council (GCC). Differences among countries nuanced the as JR Freight, all residual narrow gauge operations after
railway renaissance in each of them. One way or another privatization of CJR, EJR, and WJR, have been retained
all, except the GCC countries that are discussed separately under government ownership.
below, had sufficient inherent competitiveness to compete
against other transport modes. One can thus characterise The GCC countries are difficult to categorise and therefore
the interventions implemented by their respective represent an interesting exception. All but Oman are
governments essentially as reform-led. That is, the primary developed countries. Saudi Arabia’s original modest
intervention was to reform the institutional arrangements, to railway network was statistically clustered as Fortuitous
introduce or stimulate competition in the rail sector: While in 2008 - inherently competitive standard gauge, but
elements of investment have been present, investment without exploiting the potential. The other GCC countries
was not the primary objective. The thrust was rather to had no railways at all. Since then, the GCC countries have
minimise government participation and maximise freedom become one of the world’s railway investment hotspots.
to compete, among railways themselves, or among train All four railway renaissance market spaces are present -
operators on shared infrastructure, and in all cases against heavy haul, heavy intermodal and contemporary urban
rail, and high speed intercity is under construction. This
other transport modes.
region illustrates how quickly railway renaissance can be
implemented to support a common market and customs
The line-haul railways of the North American Free Trade
union between the six countries and facilitate movement of
Agreement are privately owned and compete with one
capital and trade. Railways in the GCC countries have been
another on notionally parallel routes. Many of them were
funded predominantly by the governments involved, with
originally built this way, while Mexico concessioned its some contribution from private financing initiatives.
former State railway to this model in the mid-1990s. They
therefore only needed safety and economic regulation, In summary, railways in developed countries were sufficiently
the latter being applied only in the case of errant market inherently competitive when the railway renaissance started,
behaviour. The former State railways of the European and therefore did not need investment-led intervention
Union had monolithic networks that cannot support to prepare them for participation in the renaissance.
parallel competition. They therefore had no alternative Their revitalization could be stimulated by introducing
but to open access to competing train operators. This is competition within the sector to enhance their efficiency
arguably second-best solution after parallel competition, and effectiveness. Of course, no railway can survive without
for two reasons. First, equitable train path allocation is investment, and substantial investments were also made
open to question, particularly if a former State railway is in market spaces where rail is strongly positioned, such
also a train operator in Europe’s open access dispensation. as high-speed intercity. The developed countries thus do
Second, while regulation may ensure equitable sharing not provide an appropriate role model for South Africa,
of cost and value between infrastructure managers and because South Africa’s inherent railway competitiveness is
train operators, the absence of competing infrastructure low, and it needs an investment-led intervention to develop
providers cannot assure that access to rail infrastructure its competitiveness to a sufficient level.
30
2.1.2.4. Developing Countries high logistics costs. The logistics sector is highly dependent
on the highway network, which transports 60% of total
Following identification of the BRIC countries as relevant
freight volume (National Plan, circa 2005).
reference group for South Africa in §2.1.1.3.1, the following
subsections examine how each one of them in turn
Brazil therefore recently changed to investment-led
positioned itself within the Assertive Railways Cluster. In
intervention, the Logistics Investment Program, a State
terms of start date, the BRIC countries are followers, by
strategic project (Figueiredo, undated). Regarding railways,
some ten to fifteen years, who should have had the benefit
the primary intervention is investment to increase inherent
of learning from railway renaissance early adopters in
competitiveness, so that they can support economic
developed countries. The following sections examine key
development. While elements of reform are still present,
aspects of their railway revitalization interventions as role
that is no longer the prime objective. Brazil has connected
models for South Africa.
its formerly isolated northern- and southern broad gauge
networks by its new North-South Railway that now runs
2.1.2.4.1. Brazil
the length of the country, albeit at this time still with breaks
Brazil initially followed a reform-led intervention by entering of gauge. It is following up with more priority freight rail
into long-term (30-years renewable for another 30 years) projects of more ≈4700km in a first phase - the East-West
vertically integrated concessions over a total of twelve and Trans-Northeastern line - to develop the interior of
regional freight railways that existed in the mid-1990s. Its the country (Smith, 2015). Funding will partly be by PPP,
heavy haul operations on both broad and narrow gauge, as involving USD 121 billion over 30 years.
well as general freight on broad gauge networks have since
flourished, attaining creditable densities of 81 million tonne- Importantly, Brazil has changed the way its new railways
km/route km for Vale’s dedicated heavy haul operations (for will operate to break rail service monopolies. Instead of
comparison, TFR achieves around 37 and 57 for coal and awarding a single vertically integrated concession to operate
iron ore respectively, and to be fair its RBaycor conveys and maintain a railway, a concessionaire will construct and
traffic other than coal), and 37 million tonne-km/route km maintain a line as well as control train movements on it for
in heavy general freight. However, its narrow gauge general 35 years. Independent train operators will have open access
freight railways achieve less than 2 million tonne-km/route through the whole new rail network. The government will
km (for comparison, TFR averages 4.3 on its general bear demand risk by guaranteeing to purchase all capacity
freight corridors). It is therefore evident that the inherent and then on-selling it to users. The process is being
competitiveness of Brazil’s narrow gauge general freight implemented through state agency National Land Transport
railways is low and that they underperform by comparison Agency (ANTT) and state-owned company VALEC. This
with its BRIC peers reviewed in the next three sections. unique railway development is something to follow closely.
Thus far, observers feel that the significant sunk costs of
Lease income from concessions, and taxes on building or improving a railway have deterred more private
concessionaires, have become a source of revenue for investment, but the federal government has filled the gap,
the Brazilian Government. Accumulated losses from and they expect continued government railway investment
the former Brazilian Federal Railways of Reais 2.2 billion in the long term. Nevertheless, the World Bank considers
(approximately R8.1 billion) in 1997 had been replaced by several steps could improve private investment in railways,
accumulated concession fees, leases, and taxes of Reais among them enhancing interconnectivity between railways
12.8 billion (approximately R47.4 billion) by 2010. However, - Brazil operates on a heritage of two different track gauges,
notwithstanding its economic upswing, high logistics costs, and the lack of physical interconnectivity between the lines
estimated at ≈20% of GDP or double the average in OECD slows return on investment (Biedermann & Galal, 2013).
countries, characterise Brazil. The high costs are attributed
to regional differences in the state of infrastructure, even Brazil is working on a high speed railway in the Rio de
though organisation of the Brazilian transport sector has Janeiro-São Paulo-Campinas corridor, to be implemented
improved substantially since the 1990s. The national rail by PPP, although after two false starts tendering has
network other than heavy haul lacks investments and been postponed to give prospective bidders sufficient
modernisation, while high harbour fees further contribute to time to prepare. Rio de Janeiro-São Paulo is eighth of the
31
world’s top 50 busiest passenger air routes. The envisaged trains, essentially wide-bodied German Intercity Express
concession period is 40 years, with commercial operation trains with bogies adapted for Russia’s broad gauge, in the
to start in 2020. upgraded Moscow-St Petersburg corridor since 2009.
Brazil’s cities have benefited since urban rail renaissance The second stage from 2016 to 2030 will involve large-scale
started in 1989. Projects completed or under construction expansion. It will create infrastructure to develop new areas
include light rail routes in Brasilia and Santos; twelve metro of economic growth across Russia’s vast territory, deploy
routes in Fortaleza, Porto Alegre, Recife, Rio de Janeiro, world-class technology and improve competitiveness of
Salvador and São Paulo, as well as two monorail lines the country’s rail system on the global market (RZD adopts,
in São Paulo (Railway Directory, 2015). Interestingly, São 2008). This includes the North-South International Transport
Paulo’s Lines 1 to 3 are 1600mm broad gauge, while Lines Corridor in strategic partnership with countries to the south,
4 and 5 are standard gauge, to benefit from lower prices in initially India and Iran, while Belarus, Kazakhstan, Oman
the larger standard gauge market. and Tajikistan have subsequently opted in, and requests
to join from Syria, Azerbaijan and Armenia are currently
2.1.2.4.2. Russia under consideration (North–South, 2015). It also includes
ambitions to build a 104km tunnel under the Bering Strait to
The Russian Federation is sole shareholder in Russian
connect the Asian and North American continents (Russia
Railways (RZD). The latter exploits its strategic geographical
eyes, 2011). To be fair, the recent Ukraine imbroglio has
position by fully integrating the Russian railway system into
dampened Russia’s ability and aspirations to network
the Eurasian transport network (Eurasian routes, 2015)
railways on continental and intercontinental scale. And
despite having a broader track gauge than many of its
hot off the press, in March 2015 RZD called for tenders to
neighbours. RZD’s strategy for developing rail transport
undertake surveys, project development and route planning
to 2030 envisages significant network expansion, in two
for the proposed 770 km Moscow - Kazan dedicated high
stages.
speed line.
The first stage from 2008 to 2015 involves modernisation Because State funding is limited, RZD is financing its
to ensure necessary capacity on key routes, a fundamental huge investment programme through public-private
renewal and upgrading of existing infrastructure, planning partnerships, in the ratio 46% by RZD, 30% by the private
and surveying work for expansion, as well as starting sector, 19·5% by the Russian Federation, and 4·5% by
construction of some high-priority lines. Among its top regional governments. This spread could be a useful role
priorities were reconstruction and technical enhancement model for South Africa. Raising outside capital is done in
of existing main lines plus construction of new lines to accordance with RZD’s Loan Programme, which provides
remove infrastructural limitations on Russia’s economic for various instruments to finance its requirements, including
growth. The next focus was on the Baikal-Amur Mainline in syndicated and bilateral loans, rouble bonds and Euro
its Far Eastern region as an investment in Russia’s future, bonds, as well as leasing and others. Key RZD focus areas
by substantially increasing transportation of oil products are interests of shareholders and partners, as well as on
and exports to the East, more intensive development and increasing efficiency and speed of management decision-
exploitation of Far Eastern raw materials and an increase making and improving transparency of the Group’s activities
in the line’s share of East-West transit traffic. The latter (Russian Railways, 2014).
catchment area stretches from China, South Korea and
Vietnam in the East to Estonia, Finland, Germany, Hungary, RZD was separated from ministry control in 2003 to
Latvia, Lithuania, Poland, Slovakia, Romania in the West. become a public company responsible for operational
A further priority was construction of dedicated freight and commercial functions. Separate daughter operating
lines to tap natural resources and develop new industrial companies have been set up for freight and passenger
zones in Western Siberia. Around 13 800 route-km were activities as a possible prelude to sale of shares. It has
upgraded for heavy axle loads, to reduce the cost of bulk commenced unbundling the former monolithic entity into
freight shipments. RZD has operated high speed passenger subsidiaries, among other at time of writing, Eurosib, which
32
runs container services linking Russia’s ports with central Appreciate also that other than in cities with metros,
Russia and Siberia; Federal Passenger Company, which heritage urban railways from the Soviet era tend to be
manages long-distance passenger operations; Freight One, extensive networks typically served by single trams. They
which offers cargo and intermodal shipment using its own therefore exploit not one of rail’s heavy axle load, high
fleet of hired wagons and offers rolling stock leasing; Freight speed, long train strengths, and have been unable to fend
Two, a second freight subsidiary that will lease or acquire off encroachment by more attractive transport modes.
new and modernised wagons; Globaltrans, a rail freight
operator and freight forwarder; JSC High Speed Rail Lines, 2.1.2.4.3. India
to promote development of high speed lines including HSR1
A Railway Budget presented to Parliament has traditionally
from Moscow to St. Petersburg, and HSR2 from Moscow
funded Indian Railways (IR). The Ministry of Railways also
to Kazan and later Yekaterinburg; and RailTransAuto JSC,
controls a dedicated financing entity, Indian Railway Finance
which handles a range of commodities including finished
Corporation Ltd (IRFC) whose objective is to raise funds
motor vehicles. RZD has the right to transfer as collateral
in the market to part finance IR’s planned outlay. IR uses
and to sell assets which amount to transfer of ownership
money so provided to acquire rolling stock and to meet
of shares in subsidiaries run as single business entities,
other developmental needs. Rolling stock assets funded
including little-used railway lines and stations with attendant
by IRFC are leased to the Ministry of Railways. IR also
equipment facilities and land.
operates a Wagon Leasing Scheme to encourage shippers
and private operators to invest in rolling stock, but it has
RZD achieves line densities of 23.6 million tonne-km/route
continued to flounder. IR spends some 94% of revenue on
km plus 1.6 million passenger-km/route km in operations
operating expenditure, leaving little for essential investment.
where block-load freight trains rather than dedicated heavy
It appears that the politicised relations between IR and the
haul trains share the same infrastructure with passenger
Government, and the consequent apparent lack of strategic
trains. It is therefore a credible peer role model from
direction, have deterred private participation. To overcome
perspectives of both performance and planning, as well as
such obstacles in moving its railways into renaissance, IR
implementing substantial investment to enhance inherent
has established special purpose vehicles, described in the
competitiveness locally and globally to support Russia’s
development objectives. next two paragraphs.
Russia has generally lagged its BRIC peers since urban rail First was Dedicated Freight Corridor Corporation of India Ltd
renaissance started in 1989. Projects completed or under (DFCCIL) in 2006 under Ministry of Railways administrative
construction include three metro lines, in Moscow, Kazan control, to plan, develop, fund, resource, construct, maintain
and Chelyabinsk, a new monorail line in Moscow, and and operate Dedicated Freight Corridors (DFCs). Building
metro extensions in Nizhni Novgorod, Naberezhnye Chelny, DFCs across the country, to operate double stack container
Yekaterinburg and Novosibirsk (Railway Directory, 2015). trains and/or heavy haul trains, marked a strategic inflexion
Note that Moscow, Nizhni Novgorod, Kazan, Naberezhnye point in the history of IR, which has traditionally run mixed
Chelny, Yekaterinburg Chelyabinsk and Novosibirsk lie in freight and passenger traffic across its network. DFCs will
a development corridor east of Moscow (mentioned also enable IR to improve customer orientation and meet market
two paragraphs above in the context of the new Moscow needs more effectively. Creation of rail infrastructure on such
Kazan Yekaterinburg high speed line). RZD owns and a scale - unprecedented in independent India - is expected
maintains infrastructure and rolling stock, which it leases to stimulate industrial corridors and logistic parks along its
to suburban companies, and receives a subsidy from the alignment. Currently under construction, the Eastern DFC
state for providing infrastructure services at a reduced rate. between Ludhiana and Dankuni is being funded in three
The primary institutional weakness is unprofitability due to sections in different ways; by the World Bank through an
ticket revenue failing to cover expenditure and insufficient International Bank for Reconstruction and Development
compensation from state authorities. Thus ageing and loan; by Ministry of Railways directly; and by Public Private
under-maintained rolling stock is gradually being withdrawn Partnership. Also currently under construction, the Western
from service and not being replaced (Savchuk, 2014). DFC between Dadri and Mumbai is being funded through
33
foreign direct investment by Government of Japan who gauge, to benefit from lower prices in the larger standard
provided a Special Terms of Economic Partnership Loan as gauge market. This practice subsequently spread to
well as by the Ministry of Railways that is bearing a portion Bangalore, Chennai, Gurgaon, Hyderabad, Mumbai and
of project construction cost as equity funding to DFCCIL. the planned metro in Pune.
Thereafter, four more DFCs are slated to complete India’s
Golden Quadrilateral that connects Delhi, Kolkata, Chennai Note that the foregoing information relates to the current IR
and Mumbai, as well as its two diagonals. institutional arrangements. As this document was finalised,
the Bibek Debroy Committee interim report on the Indian
Second was High Speed Rail Corporation of India Ltd in 2013 Railways recommended sweeping changes in the way IR
also under the Ministry of Railways to prepare financial and runs. They include transition to commercial accounting,
implementation models, and develop technical standards. streamlined human resources processes, focus on core
A 540km dedicated high speed line between Mumbai and activities to efficiently compete with the private sector, a
Ahmedabad could be first, followed by connecting the substantial amount of decentralisation, placing existing
major metropolitan centres Delhi-Amritsar, Delhi-Chennai production units under a government SPV to be known
and Chennai-Mysore. Two projects are set to serve portions as Indian Railway Manufacturing Company, encourage
of the Delhi-Mumbai corridor, currently tenth of the world’s private entry into running freight and passenger trains in
top 50 busiest passenger air routes. The recently elected competition with IR, institute independent railway economic
Modi government will fast track an investment-friendly PPP regulation, separating out the relationship between the
mechanism to modernise railways and implement mega- Union Government and IR, and raising resources for
projects such as high speed (Thakur, 2013). investments through investment banks and other financial
institutions (Economic Times, 2015).
India is a member of the International Heavy Haul
Association, and already operates double stack container 2.1.2.4.4. China
trains. IR achieves overall line densities of 10.9 million tonne- China’s railway financing is based on government
km/route km plus 16.6 million passenger-km/route km in leadership, diversified investment and market orientation.
operations that at present include freight and passenger Joint ventures are the major model for new projects. By end
trains sharing the same infrastructure. 2008, RMB300 billion (≈ZAR385 billion) had been committed
from outside Ministry of Transport. Major finance channels
India’s networking strategic horizon includes pursuing the include the Railway Construction Fund; contributions from
North-South International Transport Corridor in partnership local governments and cooperative agreements between
with Iran and Russia. However, the 1 676mm broad gauge Ministry of Railways and provincial governments; treasury
that it shares with neighbours Bangladesh and Pakistan bonds; budget from central government; strategic investors
is incompatible with the two other major track gauges in such as power plants, coal mines, ports, insurance groups;
Asia, China’s and Eurasia’s standard gauge, and the CIS’ the Dedicated Construction Fund from operation revenue;
1 520mm broad gauge, which constrain networkability. So restructuring railway assets through initial public offering;
it is beholden to transloading containers, bogie changing Railway Construction Bonds; and domestic and foreign
or gauge-changing wheelsets, which would dampen bank lending. Implementation rests on clear vision, a good
networking enthusiasm unless major traffic flows were at plan, efficient implementation, and creative financing.
stake.
China Railways achieves 26.9 million tonne-km/route km
India’s cities have benefited since urban rail renaissance plus 8.89 million passenger-km/route km on a network
started in 1989. Projects completed or under construction that at present includes dedicated freight lines (heavy
include 17 metro lines in Bangalore, Chennai, Delhi, haul) and dedicated passenger lines (high speed), as
Gurgaon, Hyderabad, Kolkata, Mumbai and Navi Mumbai, well as extensive mixed traffic heritage infrastructure that
as well as a monorail line in Mumbai (Railway Directory, has been progressively upgraded. China has developed
2015). Interestingly, Delhi’s three Phase 1 lines are 1676mm means to finance its huge railway expansion to support
broad gauge, while its four Phase 2 lines are standard rapid economic growth, and now participates in all
34
four railway renaissance market spaces. It is a strong intuitively, the shortest or great circle route from, say,
role model for railway renaissance through investing in Chinese factory city Chongqing to the western US, is
inherently competitive railway technologies. China Railways not over the Pacific Ocean, but overland from Asia to
commenced high speed service as recently as 2007, and North America via the Bering Strait.
today operates the largest and most heavily used high-
speed railway network in the world (High-speed rail, 2014). e) Route rail traffic from standard-gauge North- and
South Korea through China to Europe, at present
China’s cities have benefited since urban rail renaissance routed through Russia and Belarus.
started in 1989. Projects completed or under construction
include 107 metro lines in Beijing, Changchun, Changsha, f) Link Nanning and Kunming in southern China to
Chengdu, Chongqing, Dalian, Dongguan, Foshan, Fuzhou, Vietnam, Laos, Myanmar and Thailand, and thence
Guangzhou, Guiyang, Hangzhou, Harbin, Hefei, Kunming, through Malaysia to Singapore, by re-gauging from
Lanzhou, Nanchang, Nanjing, Nanning, Ningbo, Qingdao, narrow gauge to standard gauge in the countries
Shanghai, Shenyang, Shenzhen, Shijiazhuang, Suzhou, mentioned.
Taiyuan, Tianjin, Ürümqi, Wenzhou, Wuhan, Wuxi, Xi’an,
Xiamen, Xuzhou, and Zhengzhou; nine light rail lines in g) Complete rail links to India, Nepal and Bhutan by 2020
Changchun, Nanjing and Suzhou; six rubber- or steel- (Tibet extension, 2014).
tyred automated light metro lines in Macau and Wuhan;
h) Link Xigaze railhead in Tibet around China’s western
two monorail lines in Chongqing; and two suburban lines
border to Ürümqi railhead, to springboard from
in Wenzhou (Railway Directory, 2015). China also operates
Kashgar in China through Kyrgyzstan and Tajikistan to
bus rapid transit systems: Its urban guided transit catalogue
Herat, in Afghanistan, soon to be easternmost outpost
thus includes the full range of three steel-tyred solutions,
of Eurasia’s standard gauge network.
namely heavy metro, automated light metro, and light rail;
and three rubber-tyred solutions, namely automated light
i) China already links to Kazakhstan’s broad-gauge
metro, monorail, and bus rapid transit. It is therefore able to
network via two lines from Ürümqi.
nuance solutions for particular city requirements.
j) Promote new standard gauge railways in several

One aspect of China’s railway development has recently
equatorial African countries. This topic is addressed in
elevated it above all BRIC peers, and indeed all other railway
more detail in §2.2.
countries, namely its global railway network aspirations
and progress. China’s railway strategic horizon reaches
k) Upgrade lines from the port of Piraeus in Greece
out from its 107 000km standard gauge home network
through the Balkan states to Hungary, to access the
to surrounding and more remote regions, e.g. all Asia,
heart of Western Europe.
North America, Western Europe and Africa. The following
examples start from north and proceed clockwise to show To be fair, China is not having it all its own way. While its
its ambitious vision for standard gauge trade routes. propositions appear generous, smaller countries seem
wary of a longer term agenda. Some would like to leverage
a) Build standard gauge into broad-gauge Mongolia’s China’s overtures to their own benefit. Negotiations can
territory to support mineral exports. take a long time. But ultimately high performance rail has
become the backbone of choice for integrated, multimodal
b) Strengthen linkages with Russia through more border
freight and passenger transport in an energy-scarce world.
crossings, including from China’s northern provinces
Countries that cannot achieve that by their own means
to Russia’s Sea of Japan ports Pos’et and Slavyanka.
eventually tend to accept what is on offer.
c) Cooperate with Russia to build a high speed line from

2.1.2.5. The Essential Challenge
Beijing to Moscow.
From the foregoing discussion and examples, it is evident
d) With Russia, reach out to North America: Counter- that the essential challenge for a country whose railways are
35
not robustly positioned to support a developing economy, or contemplate operating, freight and passenger trains on
or to defend their market space from domestic competition the same network usually cannot simultaneously optimise
from other transport modes and global competition from the train-infrastructure interface for both train types. The
other countries, or even worse, are in terminal decline, is characteristics of fast passenger and heavy freight trains
to move them onto one or more of the new renaissance differ to the extent that optimising that interface for one
growth curves. This cannot be achieved without investing train type unavoidably sub-optimises it for the other. For
substantially to position rail in one or more of its inherently example, high speed passenger trains require wide curves
competitive market spaces and concurrently addressing but tolerate steep gradients, while heavy freight trains require
the institutional arrangements by which railways are easy gradients, but tolerate tight curves. Freight rail in the
funded and governed. The requisite investment may be European Union is a case in point. Its train-infrastructure
government funded, privately funded, or a combination of combination optimised for dominant passenger traffic
both as in public private partnerships, and the institutional precludes concurrent optimisation for freight trains. The
arrangements need to be supportive. The BRIC countries latter have therefore failed to prosper despite penetrating
provide ample evidence of aggressive intervention to government encouragement and intervention, and currently
position rail as the foundation of their transport sectors. By face a bleak future (Müller, Girardet, et al., 2014).
contrast, there are no known examples of countries that
have achieved renaissance by other means, such as making Furthermore, in settings where inherent competitiveness
sustaining investments in existing inherently uncompetitive is inadequate and investment is required to raise it to an
railways, or introducing competition among operators on
adequate level, it is futile to introduce competition and/or
them. The following sections discuss possible revitalisation
private sector participation only. Such interventions in an
interventions.
inadequately inherently competitive setting, typically by way
of concessions, run the risk of failure to invest and even
2.1.3. High-level Intervention Design
asset stripping, as concessionaires eke out an existence on
2.1.3.1. Competition and Reform-led stagnant or declining income. Narrow gauge concessions
Interventions in Sub-Saharan African countries (Burkina Faso, Cameroon,
Competition may or may not be used to enhance the Congo Republic, Côte d’Ivoire, Kenya, Madagascar,
efficiency of railway exploitation as an element of an Malawi, Mali, Mozambique, Senegal, Tanzania, Uganda,
intervention to revitalise a railway. In developed countries, Zambia, and Zimbabwe) have line densities of 1.5 million
where existing railways may already have adequate tonne-km/route km or less, in some instances very much
inherent competitiveness by virtue of prudent choice of less. Sustainability is questionable at such low line densities,
track gauge and parameters for axle load, speed and as the classic case of privatisation and subsequent re-
train length, increasing efficiency and performance by nationalisation of railways in New Zealand illustrates, where
introducing competition among elements of service delivery line density is as low as 0.3 tonne-km/route km (Railway
may be appropriate, and may indeed be the only available Directory 2015). The World Bank has identified that in Sub-
intervention lever. Thus several countries in the Enlightened Saharan Africa, few passenger train services cover even
and Progressive Railways Clusters have embraced their above-rail operating costs; few, if any, concessions
competition to maximise the exploitation efficiency generate significant profits for their operators and certainly
of investments in expensive long-lived assets. Such not enough to fund long-term track renewals; regulation
competition can take several forms for example, competing of private rail operators is absent, not effective or efficient;
in a market, as in open access train operations on vertically and government oversight of railway concessionaires
separated infrastructure; or competing for a market, as in is inconsistent and/or not aligned with good business
periodic refranchising of passenger services, or competing practices, which results in expectations not being met
to finance and supply capital assets, or to provide services (Bullock, 2009).
such as maintenance.
Competition can therefore be the intervention of choice
It is however important to appreciate that competition only in settings where inherent railway competitiveness is
alone is not a remedy or solution. Railways that operate, adequate for all operations that are present, both freight
36
and passenger. South Africa should therefore not follow the where customers want a door to door service and rail needs
example of the countries in the Enlightened and Progressive to complement its offer with last-mile service by another
Railways clusters, but will need to build its rail revitalisation mode.
intervention on investments that increase the inherent
competitiveness of its railways. 2.1.4. Regulation
2.1.4.1. Forms of Railway Economic Regulation

2.1.3.2. Investment and Investment-led
In the light of accumulated global experiences in achieving
Interventions
railway renaissance, it is evident that the form of railway
Throughout the world, railway renaissance has been economic regulation is essentially a function of the political
achieved only by investment in assets that have increased will behind the intervention to achieve renaissance.
rail’s inherent competiveness against other transport Thus there may be less need for economic regulation in
modes. This is true both for railways competing against instances where coherent political will and state-funded
other transport modes, or supporting competition against investment drive railway renaissance. By contrast, where
other countries in export markets, as well as for railways reform-led intervention and/or private participation drive
cooperating in intermodal alliances, particularly with road railway renaissance, there may be more need for economic
hauliers. Noting that inherent competitiveness associates regulation over matters for which multiple participants
with the market spaces heavy haul, high speed intercity, contend, such as access rights and charges, investment
heavy intermodal7 or double stacking, and urban rail, modalities, path allocation, and more.
all supported by full strength application of rail’s genetic
technologies, it is evident that South Africa will need to 2.1.4.2. Examples of the Presence of Railway
build its rail revitalisation intervention on investment that Economic Regulation
will support entry into these inherently competitive market
Those countries that have embraced railway economic
spaces. Thereafter, if and when the political climate is right,
regulation exhibit a variety of approaches. The following
it could be beneficial to consider introducing competition in
examples suggest that a particular regulatory dispensation
the railway sector.
is best set up to align with a country’s or region’s overall
policy objectives.
Regarding competition between rail and road, it is
important to appreciate that while a railway might perceive
The European Rail Agency (ERA) recognises that one
itself not to be competing against road hauliers; the
of the European Union’s major priorities is constructing
latter perceive themselves to be competing for whatever
a safe, modern integrated railway network. Railways
business is available. Customers, whether passengers or
must become more competitive and offer high-quality,
logistics service providers, by nature lean toward the more
end-to-end services without national border restrictions.
aggressive competitor, and will choose road until rail comes
The ERA was established to facilitate that priority by
up with a superior offer, either alone or in partnership with
reinforcing safety and interoperability. It also acts as the
road hauliers. Inherent competitiveness is thus a critically
system authority for the European Rail Traffic Management
important element of railway positioning because, whether
System project, and is developing a common approach
rail stakeholders acknowledge it or not, as long as logistics
to homologate railway vehicles and their subsystems.
service providers and passengers have a choice, rail is
Economic evaluation is common to all ERA activities: It
competing with road, either over the entire distance where
therefore includes an Economic Evaluation Unit to provide
rail can offer such a service, or for the long-haul portion
the European Commission and stakeholders with adequate
insight. It avoids decreasing the competitiveness of railway
7
Appreciate that heavy intermodal goes beyond simply transferring a load
transportation, and provides decision-makers with a fair
unit (container, swap body, whatever) from one mode to another, such estimate of the effects of Agency recommendations. It
as between road and rail and vice-versa. When rail is involved, it requires also avoids an accounting view of railways, but takes into
raising the axle load of the container wagons into the heavy haul domain,
by double stacking containers, to exploit the competitive strength of rail’s account qualitative aspects and development potential, i.e.
high axle load genetic technology Supporting. the long-term interests of railway clients and third parties.
37
The United States Surface Transportation Board is an responsibility with two ministries: The Federal Ministry of
economic regulatory agency mandated to resolve rail- Transport, Construction and Town Development supervises
road rate- and service disputes and review proposed railway regulation; while the Federal Ministry of Economics
railway mergers. Its decision-making is independent and Technology takes organisational responsibility. Then
from, but administratively affiliated with, the Department there are rail or transport-specific regulators. The UK the
of Transportation. It serves as both adjudicatory and Office of Rail Regulation is an example. The Netherlands
regulatory body, having jurisdiction over railway rate and Office of Transport Regulation is located within its
service issues, mergers, and line- sales, construction, and Competition Authority. The Canadian Transportation Agency
abandonments. It also has jurisdiction over certain road mandate includes economic regulation, dispute resolution
transport, ocean shipping and pipelines matters. and accessibility. The transport-wide Swedish Transport
Agency was introduced in 2009 to regulate competition
The Australian Department of Infrastructure and Transport and security for an efficient transport market.
recognises that comprehensive and accessible rail
transport is an important link in Australia’s transport chain The foregoing examples show that arrangements to
that joins communities and strengthens industry. It assists regulate access and introduce competition to the rail sector
the Government to manage Nation Building Program rail have come to include a variety of issues. No clear golden
investments and oversees Australian Rail Track Corporation thread runs through them, other than that they have been
(ARTC). ARTC itself originated in the 1990s Australia-wide structured around government imperatives and objectives,
competition reform agenda. The Department also assists which differ from country to country. Railway economic
the Government, States and Territories regarding an agreed regulation in South Africa would therefore need to address
national model for rail safety legislation and associated aspects of its railway revitalisation intervention that promote
regulations. development of a competitive, efficient and sustainable
railway industry that contributes to economic growth and
Research8 further indicates that responsibility for rail social development.
economic regulation may rest with national government,
sub-national government or shared by both. A wide range 2.1.4.3. Examples of the Absence of Railway
Economic Regulation
of regulatory institutional arrangements at the national
level across selected OECD countries exists, as follows. Brazil, Russia, India, and China have moved or are moving
One option is ministerial responsibility for economic their railways into renaissance largely through coherent
regulation decisions. In Japan it is the Ministry of Land, political will, and appear therefore not yet to have perceived
Infrastructure and Transport. In France it is the Ministry of a compelling need to enact legislation to enable economic
Ecology, Energy, Sustainable Development and Planning, regulation. These countries have demonstrated exemplary
assisted by the Mission for Control of Rail Activity as an single-mindedness in implementing their respective pro-
advisory committee. In Switzerland it is the Federal Office renaissance interventions.
of Transport, but additionally the Railways Arbitration
Commission settles access disputes. In Ireland the Brazil has existing vertically integrated concessions, but has
Department of Transport oversees passenger fare changes, advanced to a democratic open access dispensation on
while rail infrastructure development is subject to approval newly-built national routes. The other three currently have
by an independent planning authority. Another option is vertically integrated operations. Their arrangements tend to
a regulator encompassing all main infrastructure sectors, minimise overlapping interests and responsibilities, which
including some rail functions. This option prevails in Germany in turn minimise points of contention and hence the need
(FNA) and Australia (ACCC). The FNA shares regulatory to intervene by way of regulation. Nevertheless, they are
diversifying their funding sources, so economic regulation
is likely to emerge. Expect Russia to move in that direction,
8
Albon, R and Wu, S (2009) Economic Regulation of Rail infrastructure – as it has already commenced unbundling Russian Railways
Design and Process across OECD Countries; Discussion Document on
the establishment of interim rail economic regulatory capacity within the
above-rail assets. The Indian Railway Board functions as
DOT (November 2011). a ministry and exercises all powers of central government
38
regarding railway regulation, construction, maintenance, To contextualise the African continent’s 30.4 million km2
and operation. India is thus comparable to the South African area with respect to railways, note that the areas of the
dispensation before creation of the Railway Safety Regulator BRICS countries (also in million km2) are habitable Russia
in 2002 and the forthcoming Single Transport Economic 10.0 (only some 59% of its 17.1 million km2 is habitable),
Regulator. China unbundled its Ministry of Railways in 2013, China 9.6, Brazil 8.5, India 3.2, and South Africa 1.2. Thus
creating the State Railways Administration to monitor the the combined area of all BRICS countries is only 7% larger
safety, project quality and technical standards employed at than that of the African continent. The United States has
vertically integrated operator China Railways Corporation. the largest railway network in the world, followed by China,
At least there seems to be safety regulation of sorts, and Russia, and India: Their combined areas will overspill Africa,
project quality might include an economic perspective. coincidentally, also by only 7%. One can only conclude that
It thus seems that even the BRIC countries could be moving if Africa is to succeed in rail-based intra-continental trade,
toward a dispensation where the presence of multiple it is improbable that a narrow gauge continental network
contending interests could lead to a need to introduce will ever play in the league of the world’s four largest railway
railway economic regulation. networks combined: A standard gauge continental network
is therefore called for.
2.2. Developments in Africa
When contemplating a matter as weighty as changing track
During the time that this Green Paper has been in
gauge, it is important to take a broad and long view of the
preparation, Africa Rising, the notion of a giant continent
context. The solution to Africa’s gauge muddle is common
awakening from poverty and disaster, and now bursting
cause: The African Union Protocol on Gauge indeed
with hope and opportunity, has received increasing
concluded that conversion to standard gauge (1 435mm) for
recognition. Progress is real, dramatic and well established.
new railway lines should enable African railways to benefit
The International Monetary Fund reported that since 2003,
further from the wide range of material and equipment at
GDP across Sub-Saharan Africa’s 48 countries grew an
global level, and would contribute significantly to resolving
average of 5-7% per year. In the past decade, six of the
the problem of interoperability in the future Pan-African
ten fastest growing countries in the world were African,
railway network. However, it did not find traction during the
some of them outgrowing China in recent years. Africa
era when much of Africa was beholden to donors. Now
is experiencing a historic transition: During the next few
that Africa enjoys high economic growth, is attracting more
decades hundreds of millions of Africans will likely be lifted
foreign direct investment than aid, and is contemplating its
out of poverty, just as hundreds of millions of Asians were
developmental infrastructure foundation, it is appropriate
in the past few decades. Africans are better educated than
ever. With almost a billion cell phones in use, the most to revisit the track gauge issue. South Africa is inseparably
essential tool for entrepreneurialism is at hand. The world’s part of this dynamic and, from a railway policy perspective,
emerging economic powerhouses find it easier to digest needs to recognise events to its north.
Africa’s simultaneous potential and pitfalls. China has taken
the lead in two-way trade with Africa - often in infrastructure- In the light of the previously mentioned Chinese ambition to
for-resource swaps that have given the continent an forge an extensive standard gauge network radiating from
infrastructure makeover. India, Brazil, Malaysia, Turkey, and its own network, the following is the status in equatorial
the Gulf states are also pursuing Africa’s oil and gas, coal, Africa. A Djibouti to Addis Ababa standard gauge railway
timber, minerals and farmland (Perry, 2012). is currently under construction by a Chinese contractor,
track laying having started in May 2014. Member countries
Africa’s population is already over one billion, and is of the East African Community, Burundi, Kenya, Rwanda,
projected to rise to over four billion by the end of this century. Tanzania and Uganda have agreed to build a new standard
Africa could reap a massive demographic dividend from its gauge network, with funding arrangements also finalised
bigger labour force. Its population boom could transform with China in May 2014 and construction now evident.
the continent, breaking centuries-old cycles of poverty and China Railway Construction Corporation signed a $12 billion
inequality (York, 2014). Already, among the world’s 300 deal in November 2014 with Nigeria to build a railway along
fastest-growing cities, 37 are in Africa. its coast. Other standard gauge ambitions or initiatives have
39
been reported in Cameroon, Chad, Ghana, Mali, Senegal, generally still follows its original pre-1900 alignment,
and South Sudan. All have Chinese involvement. All have although a few sections have been realigned, most notably
potential linkage to the standard gauge railways of North replacement of the Hex River pass by a series of tunnels in
Africa. Furthermore, energetic railway investment across 1989. While the railway line still follows its original alignment
the Red Sea in the Gulf Cooperation Council states is rapidly through Tulbagh kloof between Wellington and Worcester,
creating a neighbouring network that would offer potential the original road through the same kloof was first widened,
rail-based multilateral trade opportunities with northeast later replaced by a new alignment on the opposite bank
African countries and further. of the river, then largely displaced by the Du Toits Kloof
pass, and ultimately relegated to local traffic by the
From southernmost railhead of the East African network Huguenot tunnel in 1988. Furthermore, the entire parallel
to northernmost railhead of the South African Network N1 road has benefited from several substantial upgrades,
would be some 2500km, not a huge distance on the scale and now features wide lanes and shoulders, no blind rises,
of continental and intercontinental railway networks. The and climbing lanes on long upgrades. Is it reasonable to
proposition should attract consideration in the context of expect rail on first-generation alignment to hold its own
the Durban to Dar es Salaam North-South corridor. What against state-of-the-art road transport on fifth-generation
was unthinkable until recently has now become an item on alignment? Similarly, opportunistic realignment to ease
the track gauge agenda. curves and grades on the main lines from Gauteng to the
ports of Durban, East London, and Port Elizabeth was also
2.3. Rail Challenges for South Africa undertaken, mostly before 1960, although the Volksrust-
Newcastle section of the Gauteng-Durban route was
The foregoing material has provided a comprehensive realigned and re-graded as late as 1989. By contrast, over
global overview of railway renaissance drivers and the the same period the original port of Cape Town, now the
modalities of achieving renaissance through appropriately V&A Waterfront, was first expanded by the Duncan Dock
designed interventions. The following sections examine in 1939, and then by the Ben Schoeman Dock in 1977.
railways in South Africa from the perspective of identifying Rail is therefore not underutilised, but continued investment
aspects that call for attention and appropriate interventions. to upgrade and expand infrastructure for other transport
modes has simply relegated it to insignificance. Its apparent
2.3.1. Underutilised Infrastructure Assets underutilisation should therefore not surprise.
The notion has often been expressed that many of South
Africa’s railway infrastructure assets are underutilised. One consequence of piecemeal railway upgrading was that
Simply observing the absence of traffic seems to confirm its consistent end-to-end ruling grades were not achieved. This
truth. While the White Paper on National Transport Policy perpetuated changing the class or number of locomotives
indeed mentions the need to optimise capacity utilisation, on a train where ruling grades changed en route, a heritage
there are many underlying reasons why traffic is absent, embedded in the vertical alignment by steam locomotives
and it is equally true that much apparently underutilised rail that have long been retired. When mainlines were electrified
infrastructure is also obsolete. Most of South Africa’s main to secure the benefits of electric traction, the pre-existing
rail routes were completed before 1900, and most of the need to change class or number of locomotives at yards
branch lines were completed by 1910. The construction where steam locomotive depots had formerly been located
technology of the time was labour intensive, with limited obscured the fundamental ideal of a single electrification
explosives and no earth-moving machinery. Consequently, voltage over an entire route. Increasing axle load followed
earthworks were minimal, and routes avoided rather than a similar path, piecemeal upgrades resulting in the
passed through difficult terrain. The resulting alignments present axle load diversity on the national network. These
were roundabout, frequently with many tight curves and inconsistencies have persistently exacerbated freight rail
steep grades. operational inefficiencies.
To illustrate the present challenge by example, appreciate Obsolete narrow gauge infrastructure has also obstructed
that the Cape Town-Kimberley-Johannesburg railway progress toward achieving competitive globally-referenced
40
passenger train performance. Numerous speed-restricted uncompetitive mode, but rather investing in realising the
curves, many no higher than 90km/h, are a first impediment. railway renaissance in South Africa, and thereby enabling
While such curves do not unduly impede heavy freight rail to attract substantial amounts of traffic from road to
trains, they seriously impede long-distance passenger rail with concomitant economic, environmental and social
trains. Passengers accept long distances at low speed with benefits.
long journey times only as a last resort. The inherent speed
limitations of narrow gauge are a second impediment. 2.3.2. Over-age Equipment
Even if there were no tight curves, the potential to increase
Absence of competition within the railway sector has over
speed remains limited, resulting in inability to progressively
time resulted in equipment and standards lagging well
increase speed over time. Compare this heritage to Europe,
where ongoing upgrading of its standard- and broad gauge behind global norms. The last series-produced technical
railways raised maximum speed on much of the original generation of Metrorail coaches, the 5M, was placed into
19th Century infrastructure to 200km/h, today considered
eminently suitable infrastructure for mixed freight and
passenger traffic.
Recall that the De Villiers Report (1986) found that SATS

had invested in rail sectors that were unable to compete
with other modes, or that ran at a loss, and recommended
that it should restrain new rail investment and rather focus
on increasing utilisation of existing assets. However, the
Report recognised neither the importance of inherent
railway competitiveness, nor that narrow gauge railways are
significantly disadvantaged against wider-gauge railways
and other transport modes in this respect. Recommending
SATS should focus on increasing asset utilisation, when
the assets themselves were inherently uncompetitive, was
the kiss of death to general freight- and long distance
passenger services. The timing of the report was also
inopportune, coming when the railway renaissance was
manifestly underway to discerning observers but had not
yet fully bloomed, and preceding deregulation of road
freight that tipped the modal balance in favour of road.
Through locking most railways in South Africa into inherent
uncompetitiveness, this set of circumstances affirmed their
acute decline.
Underutilised railway infrastructure is thus not an underlying

problem concerning railways in South Africa, but is
symptomatic of obsolete standards and technologies
that have run their course, and of subsequent failure to
invest in the current generation of technologies of the
railway renaissance. Only line capacity that has economic
value is readily saleable. Line capacity that is inherently
uncompetitive is probably unsaleable. The solution to
this perceived problem is thus not regulating traffic from
road to rail and then having it conveyed by an inherently
41
service in 1958. It was followed by the 6M, 7M, 8M, and TFR started acquiring new locomotives for heavy haul
9M New Generation projects in the 1980s, which however trains, commencing with new Class 15E locomotives
did not achieve large scale fleet deployment due to financial for the ore line, new Class 19E locomotives for the coal
constraints. The 10M upgrade of the 5M generation line, and new Class 43 diesel locomotives for heavy haul
achieved lower maintenance and improved appearance, and general freight service. It has followed through with
but even the 10Ms fall short of many contemporary further orders for more than a thousand diesel and electric
convenience, greening, mobility, performance, safety, locomotives for heavy haul and general freight service, an
and security requirements. Similarly, the design of the last event that was highlighted in Industrial Policy Action Plan
generation of long distance coaches used by Shosholoza 2014/15 - 2016/17. While this intervention will support
Meyl originated in the 1960s. No new passenger rolling reliable service delivery, recognise that new narrow gauge
stock has been built since the mid-1980s. freight locomotives attract a price premium. Narrow gauge
axle load is low by standard- or broad gauge norms, while
Present passenger rail positioning in South Africa is lower longitudinal track resistance constrains the tractive
fundamentally constrained by the trains currently operated effort that may be exerted. Thus even if narrow gauge
under the Metrorail and Shosholoza Meyl brands. Their locomotives cost the same as standard or broad gauge
technologies are out-dated, and they have consequently locomotives, they haul less tonnage, resulting in a premium
placed no demand for higher performance on infrastructure, price per unit tractive effort.
which in turn has also become out-dated. Metrorail currently
offers only a one-size-fits-all solution, which might not be able In addition to gradually declining competitiveness against
to match the performance of contemporary higher capacity, other transport modes, failure to upgrade equipment at
lower cost, and/or faster guided transit solutions on lower every opportunity due to lack of understanding of inherent
density routes. Shosholoza Meyl is handicapped by limited competitiveness means that there has been a tendency to
speed on narrow gauge track, and cannot differentiate refurbish assets to existing standards rather than to replace
itself competitively from offerings by other transport modes. them with new equipment to ever higher performance
Fortunately, the current major recapitalisation of commuter standards. Competing as it does against road freight,
stock, and the renewal of the control infrastructure, will which replaces vehicles with new higher performing ones
in due course reposition PRASA’s urban rail offerings to on a shorter cycle than rail, this practice effectively and
world class standards, which will support the ability to shift continuously diminishes rail’s relative competitiveness.
commuter traffic from road to rail. The recent arrival of new
locomotives for Shosholoza Meyl trains should improve Furthermore, the set of out-dated technologies widely
service reliability, but may offer only marginal reduction in still used for signalling and train braking negatively affects
journey times because they are beholden to TFR for access overall railway safety because it does not design out human
to its constrained infrastructure. error as do off-the-shelf contemporary technologies. This
situation further exacerbates human factor management
Positioning of freight rail in South Africa also reflects challenges in safety-critical jobs, such as train controllers
an inability to raise inherent competitiveness. With the and train drivers, which manifest themselves in unsafe
exception of the ore line, relatively few new wagons have responses to abnormal conditions. Under-investment
entered service in recent years other than to replace those in railway infrastructure and rolling stock furthermore
damaged in accidents. Wagon design has also become results in frequent technical failures, which increases the
outdated. The jumbo coal wagon design was a world leader prevalence of abnormal conditions. Adequate investment
with its 4.2 load-to-tare ratio when it was conceived in the in contemporary technologies is required to close that gap
early 1980s, but thirty years later it is mediocre by global and eliminate the risk of accidents and incidents that could
norms of 6.0 or higher. Can road rigs from the early 1980s damage assets and freight and injure, fatally or otherwise,
compete with contemporary designs? To begin with, there crews, passengers, and the public. Gautrain is a good
were no side-tipper interlinks in those days. local example of a railway for which all hazards have been
identified up front, the risks assessed, and the system then
Similarly, the locomotive fleet aged steadily to the point designed to reduce residual risks to known and acceptable
where it could no longer support reliable service. Fortunately levels. Fortunately PRASA’s new signalling systems and
42
TFR’s Long Term Planning Framework have recognised the based specification trucks (Supporting), and systems such
benefits that contemporary technology can deliver in this as lane departure warning (Guiding) and adaptive speed
regard. control (Coupling), and allowing longer vehicle combination
lengths (Coupling), it increases the challenge of achieving
2.3.3. Capitalised Maintenance road-to-rail shift. It would be churlish to deny a competitive
Refurbishing assets rather than routinely replacing them transport mode the opportunity to upgrade as best it can,
with higher performing new ones not only insidiously but equally rail needs to leverage its genetic technologies
diminishes inherent competitiveness, but encourages to maximum extent so as not to distort the outcome of the
capitalisation of maintenance expenditure. Thus while the competition. South Africa’s existing railway asset base is
total quantum of capital investment may leave an overall largely obsolete and over-age9. Investing substantial capital
impression of substance, the net effect on increasing to sustain performance at its existing levels foregoes the
rail’s competitiveness is diluted by continuing to maintain opportunity to invest in projects that can position railways
inherently uncompetitive obsolete assets. For example, at the forefront of the national transport task.
TFR’s 2014 capital spend of R33.3 billion comprised 24.5%
2.3.4. Low Performance
sustaining capital and 75.5% expansion capital (Transnet
Integrated Annual Report, 2014: 74). This is nevertheless Railway costs include a relatively high infrastructure fixed
a substantial improvement on three years earlier prior to cost component, and rail therefore becomes more cost
Transnet’s Market Demand Strategy, when Freight Rail’s effective when traffic volume increases for a given route
2011 capital spend of R12.5 billion comprised 65.6% distance. Conversely, rail becomes less cost effective when
sustaining capital and 34.4% expansion capital (Transnet traffic volume decreases for a given route distance. The
Integrated Annual Report, 2011:121). Noting that sustaining generally accepted measure of railway network utilisation
is Line Density, expressed as million tonne-kilometres or
capital investment is the periodic addition of capital to
passenger-kilometres per route kilometre on an annual
maintain operations at existing levels, it is questionable
basis. Table 3 compares a relevant selection of railways
whether this practice is tenable in a setting where rail’s
(from Railway Directory 2015 and Transnet Annual Report
inherent competitiveness does not pass muster in the first
2014). For each freight traffic category, namely all Freight,
instance, where road competitors raise the bar each time
Heavy Haul, and General Freight, narrow gauge railways do
new vehicle models bring technology enhancements to the
not attain the comparatively high line density of standard
market, where traffic volumes fail to meet expectations, gauge or broad gauge railways, but consistently gravitate
and where alignment with national transport objectives to the bottom of each category. The many apparently
such as intermodal transport solutions and road-to-rail shift underutilised railway routes in South Africa bear out this
struggles to get traction. observation. Note that public domain data does not respect
user requirements: The foregoing three freight traffic
Appreciate that as road transport raises the bar by emulating categories were therefore chosen to extract maximum
rail’s genetic technologies when implementing performance insight from available data.
43
Table 3: Comparative Line Densities for Selected Railways
Density 106
Freight Traffic Density106 tonne-
Operation Track Gauge passenger-km per
Category km per route km
route km
Brazil: MRS Broad 37.2
China Railways Standard 26.9 8.9
Russian Railways Broad 23.6 1.8
USA: BNSF Standard 20.3
All Freight
USA: Union Pacific Standard 16.0
USA: CSX Standard 12.4
Indian Railways Broad 10.9 16.6
USA: Norfolk Southern Standard 8.3
South Africa: TFR Narrow 7.4 0.1
Australia: BHP Billiton Standard 126
Brazil: EFC Broad 82.3
Brazil: EFVM Narrow Heavy Haul 79.6
South Africa: TFR Ore Line Narrow 58.1
South Africa: TFR Coal Line Narrow 37.5
South Africa: TFR Narrow 4.3
General Freight
Brazil: ALL, FCA, Transnordestina Narrow 1.2
Appreciate that Indian Railways and China Railways, and of its Assertive Railways cluster fellows. It is also evident
to a lesser extent Russian Railways, convey substantial that narrow gauge simply does not cut it, whether that be
long-distance passenger traffic on the same infrastructure general freight or heavy haul in Brazil or in South Africa.
as their freight traffic: The last column gives the passenger More incisive interventions are necessary. Among other, a
line density, which is not significant where no value is reduction of TFR’s network by two thirds, without material
given. The value against TFR is an estimate of Shosholoza loss of traffic, would go a long way to increasing its line
Meyl’s contribution. The basis for aggregating total freight- density to that of its fellows, and usefully reduce the
plus-passenger line density is the subject of debate, but infrastructure fixed cost component.
equivalence of one tonne-kilometer equals one passenger-
kilometer is sometimes used. Thus one might compare, Stakeholders have frequently suggested that TFR should
say, India’s 10.9+16.6=27.5 line density units to Russia’s increase the efficiency of its current operations, rather than
23.6+1.8=25.4 line density units and conclude that they are contemplate new investment. Aside from repeating a De
in the same line density league. The passenger statistics Villiers recommendation from 1986, such suggestions need
exclude Railway Directory’s City Rail category, i.e. metro to consider some practical realities. Essentially, railway key
and light railways. performance indicators are a function of track gauge, as the
following tabulation shows:
Raising metrics such as availability and reliability from 70%
(typical of a mediocre railway) to 90% (typical of a good Many of them exceed the track gauge ratio of 1.34, the
railway) can potentially gain an improvement of only some differences being attributable to the following drivers.
30%. It is therefore evident that efficiency improvements First, economies of scale come with wider track gauge:
alone, though always necessary, cannot raise performance Vehicle components such as wheels, brake gear, draw
sufficiently to move railways in South Africa into the league gear, couplers, and material thicknesses are common to
all track gauges, but their mass is proportionally less on
higher capacity vehicles, hence load/tare ratio is higher for
9
See sections 2.3.1 and 2.3.2.
44
standard gauge wagons. Second, traction motors have It is evident that the argument for increasing performance
end-effect losses: They are proportionally less on longer of narrow gauge railways is trapped in a Catch 22 paradox:
standard gauge motors, hence standard gauge motors They need to exceed all applicable standard or broad
achieve higher power outputs. Third, in addition to higher gauge performance metrics to equal standard gauge
load/tare ratio, higher axle load yields higher capacity, so performance, but are not able to do so by virtue of narrow
fewer locomotives and wagons and trains are required to gauge constraining their performance to less than standard
deliver given throughput. Fourth, fewer trains cause less gauge performance. The comparatively low performance
congestion and hence line capacity at saturation is higher. of narrow gauge railways shown in Table 3 is thus not a
Fifth, fewer locomotives and wagons to perform the same reflection on potential for improvement; rather it shows that
task cost less to acquire and to maintain. Sixth, higher the performance of narrow gauge railways is handicapped
tractive effort per freight locomotive reduces their capital to substantially less than that of standard gauge railways.
cost per unit tractive effort. Seventh, higher power per Unsurprisingly then, narrow gauge railways currently carry
passenger locomotive reduces their capital cost per unit less than 3% of global tonne-km.
power output. Eighth, the difference between passenger
train speed comparing standard gauge and narrow gauge 2.3.5. The Status Quo is Unsustainable
is simply out of reach for the latter. Thus to equal standard
Narrow gauge track precludes implementing full-strength
gauge performance, a narrow gauge railway would in
heavy haul, as well as double stacking containers; the
principle need to increase performance metrics in the range
two indispensable weapons in freight rail’s offensive
30 to 100%, or more in the case of maximum speed, which
against the road mode. Consequent deterioration in rail’s
is extremely improbable.
Table 4: Key Performance Indicators for Standard Gauge and Narrow Gauge
Key Performance Indicator Standard Gauge Narrow Gauge Ratio

Track gauge, mm 1435 1067 1,34
Load/tare ratio, iron ore wagons, number 6 5 1,20
Locomotive adhesion, % 37 30 1,23
Heavy haul axle load, tonnes 40 30 1,33
Load/tare ratio, coal wagons, number 6 4,2 1,43
General freight locomotive axle load, tonnes 32,4 21 1,54
Passenger traction motor power, kW 1600 1000 1,60
Container TEUs per meter, number 0,251 0,137 1,83
Maximum single line capacity, Mta 150 80 1,88
Locomotive usable tractive effort, kN 705 371 1,90
Passenger train speed, km/h 380 130 2,92
45
inherent competitiveness has resulted in substantial loss As with freight, road transport has also become the mode of
of market share and modal shift from rail to road. Road, choice for passengers as it offers faster and more frequent
and not rail, is now the transport mode of choice of freight service, especially over longer distances. Low-speed long-
owners and logistics service providers. Freight rail in South distance and regional passenger trains, Gautrain excepted,
Africa therefore cannot achieve renaissance without a are now the mode of last resort. To reduce journey times
wider gauge core network and appropriate institutional re- substantially, PRASA will ultimately need access to high
arrangements. While Transnet’s Market Demand Strategy speed intercity rail infrastructure. This need should inform
is driving investment to catch up with history, it fails to drill future wider gauge core network requirements. Without
down to inherent railway competitiveness fundamentals, sufficient high speed infrastructure, long distance passenger
and private industry is quite sceptical of the investment rail will remain in terminal decline.
(CSIR, 2013: 46).

Appreciate nevertheless that PRASA is moving urban rail
in the right direction by committing to acquire new electric
South Africa’s present line density, expressed as tonne-km
multiple unit commuter stock. This intervention will address
per route km, is far below that in countries that have made
the problem of over-aged rolling stock and its associated
intermodalism work. However, no amount of efficiency
unreliability: In conjunction with appropriate signalling to
improvement can move freight rail into a sufficiently
maximise the inherent high performance and safety of
competitive line density range, without which it is improbable
contemporary urban trains, PRASA will then be able to
that long haul rail costs will decrease sufficiently to induce
provide high capacity on its present urban network and
market-driven road-to-rail shift, and thereby stimulate future extensions thereof. This means that for planning South
intermodalism. In response to industry requirements, TFR is Africa’s future railway network, it would be appropriate to
mobilising a multi-faceted Intermodal Strategy that entails consider narrow gauge urban rail, and wider gauge intercity
integration of technology solutions, revised operating freight and/or passenger routes, as responding to separate
models as well as development of intermodal facilities, needs.
to reduce logistics costs and improve efficiencies for rail
customers and logistics service providers. An integrated The introduction of an essential wider gauge high
road and rail solution will have to be less costly than that performance core network, for freight trains as well as for
of either mode used on its own (CSIR, 2013: 44), and will regional and long-distance passenger trains, should set
need to match the precision and reliability requirements of railways on a trajectory to renaissance, thereby to recapture
users. their proper share of the national transport task. The existing
core network supports 95% of its traffic on some 30% of its
In short, freight rail in its current form is locked into acute route distance: This indicates that an essential wider gauge
decline, unless appropriate and significant investments are new network of some 7 000 - 10 000km should suffice to
made in rail infrastructure and associated rolling stock. move railways into renaissance. However, the implications of
Another far-reaching consequence of this decline is the freight and passenger trains on a new wider gauge network
will need careful consideration. While a network capable
modal imbalance caused by the rise in South Africa’s
of supporting heavy intermodal trains at 120km/h as well
truck fleet, which was an inevitable consequence of rail
as regional trains at 200km/h would be workable, higher
not carrying its share of the national transport task. The
speeds would be challenging. Considering also alternative
truck fleet has increased from 6 000 vehicles in 1938 to
modes such as low cost airlines, a staged approach could
270 000 in 2006 and 474 000 heavy load vehicles and
emerge. Over distances radiating from Johannesburg
-trailers in 2010 (latest available National Traffic Information
to, for example, Bloemfontein and Polokwane, 200km/h
System statistics), causing major damage to the national
trains could give acceptable journey times. Still further,
road network and contributing to road congestion. to Durban, journey time would be too long (at least when
Road accidents involving heavy transport vehicles occur compared to air travel) and very high speed rail, 300km/h
frequently and cause major traffic disruption, while clearing or higher, would be indicated. Beyond that, even very high
and restoring accident scenes is a costly externality. speed rail journey times might possibly be too long. Cape
46
Town would therefore more likely prove to be a low cost track infrastructure, stations and yards that still might serve
airline destination than a rail destination. Managing a wider marginal traffic. Furthermore, vandalism has taken its toll on
gauge South African core railway network would also pose routes where there are no train operations.
interesting challenges and opportunities regarding dynamic
scheduling to maximise freight and passenger throughput, Branch lines are characterised by multiple origin-destination
and to harmonise higher speeds for container trains and pairs, often single wagonloads, multiple loading sites, low
passenger trains. axle load limits (11.5 - 15 tons/axle on lines that have been
closed, and 15 - 20 tons/axle on lines that have not been
Note that this section has introduced the notion of wider closed) and diesel traction. They are owned and operated
gauge track, to satisfy stakeholders who believe that if by TFR. Currently there is no open access policy position,
South Africa widens the distance between its rails, an although some private entities have negotiated access
optimum gauge needs to be determined. In the light of the arrangements with TFR, these arrangements tend to be
networking and technical aspects mentioned thus far, it very limited and confined to discrete areas associated with
is improbable that from a rail policy perspective changing private sidings attached to agricultural, manufacturing or
gauge to anything other than standard gauge will receive mining facilities.
support. The term wider gauge is used henceforth in this
document. This represents an important challenge for Government,
Transnet and the private sector on which to collaborate,
2.3.6. Branch Lines as Government’s mandate addresses national strategic
Branch lines comprise 7 278km or 35% the total rail network. objectives and informs Transnet’s strategic objectives as a
Nominally 3 928km of them are currently operational, but commercial organisation. Another factor, and potentially a
many are in varying states of disuse. The remaining 3 source of inherent tension within the branch lines issue, will
350km are closed lines. Over the years, branch line traffic be the need to ensure that where opportunities are offered
declined because it no longer made business sense for a to the private sector, they should contain genuine value and
large commercially operated railway to provide rail services an appropriate sharing of risks. Without these, attempts at
to this market segment, nor to maintain or invest in the revitalisation by involving the private sector will probably
network infrastructure supporting such operations due to not succeed. Transnet has recently made a first move, by
a lack of scale and profitability per the Transnet mandate inviting proposals to concession the 85km 18.5 tonne/axle
that pre-dated the New Growth Path. This decline over 20- Belmont - Douglas branch line.
plus years has led to a significant maintenance backlog of
47
Achieving railway renaissance requires investment in heavy been possible to keep branch lines in operation. This could
axle load, high speed, high density rail corridors that are be a role model for South Africa.
inherently competitive against road transport: It will not be
easy to integrate existing branch lines into such a milieu. It is improbable that the amount of traffic on many of
Their frequently steep gradients and many tight curves South Africa’s branch lines, with the possible exception
do create challenges, but they are not necessarily show of those that convey output from mines, will be able to
stoppers. However, their infrastructure frequently supports support investment to increase their axle loads. Absent
only light axle loads, which represents an ominous two- comprehensive feasibility studies on the potential viability of
edged sword. From a branch line perspective, low axle branch lines, it must be concluded that many branch lines
load can exclude wagons fully loaded to permissible core probably cannot be economically viable. Those that need
network standards, as was the case before Belmont– to be kept operational because they have development-
Douglas was upgraded from 11.5 to 18.5 tonnes/axle in or strategic value will therefore need financial support by
2014, and all that goes with that, such as loss of revenue willing government or other institutions. Such support could
on traffic foregone and/or cost of topping up wagons to full target either the capital cost of increasing axle load, or the
load where a branch line joins a main line. From a mainline operating cost of hauling under-loaded wagons.
perspective, a lightly loaded wagon from or to a branch
line uses the same line capacity as a wagon fully loaded to Appreciate that the foregoing issue is unaffected by
permissible core network axle load, and ought therefore to differences in track gauge between existing narrow gauge
attract the same haulage charge as a fully loaded wagon. branch lines and a wider gauge new network. Using the
Either way, such movements are probably uncompetitive example of Spain’s conversion from broad gauge to
against road on a cents per net ton-km basis. standard gauge, vehicles with variable gauge axles facilitate
through running between one gauge and the other: Access
The foregoing is not a uniquely South African challenge and from the core network to branch lines and vice versa will
has been experienced around the world as a side effect of therefore be possible. However, variable gauge axles can
railway renaissance. It is exacerbated by raising axle load on do nothing for differences in axle load between the core
the core network, to increase rail’s competitive advantage network and branch lines, and the associated economic
vis-à-vis road. For perspective, axle loads in unrestricted problems will not go away.
interchange in North America have increased periodically
as railways have increased their inherent competitiveness 2.3.7. Institutional Arrangements
in defence against truckers also finding ways to increase
In the White Paper on National Transport Policy of 1996,
their competitiveness. This challenge has been addressed
Government recognised that in fulfilling its role within the
by parties that have an interest in branch lines in one or
transport context, it should focus on:
more ways, depending on the haul length at stake. Where
a single large plant near a main line could be isolated by
a) Policy and strategy formulation as its prime role, in
closure of a branch line, with possible repercussions on the
order to bring together key players in broader national
town in which it is located, one or both stakeholders come strategies, and
up with funding to strengthen the line. State governments
have contributed where more extensive impact is likely, and b) Substantive regulation, which is its responsibility,
even federal government has made once-off contributions to ensure unbiased regulation of safety and quality,
to upgrading branch line axle loads. As a last resort, noting to control market access, and to prohibit excessive
that none of the foregoing examples carry passenger tariffs in the case of monopolies.
trains, other than possibly tourist trains, affected railroads
simply reduce train speed because the Federal Railroad In the absence of a National Rail Policy, stakeholders and
Administration does not prescribe track standards for speed bodies other than Government have through the years,
lower than 10 miles per hour (16km/h). Thus whatever the developed and implemented quasi-policy and strategies.
outcome of increasing axle load, between operation at Because they were driven by stakeholders with particular
reduced speed and strengthening the track, it has generally interests, this situation further fragmented the regulatory
48
environment and contributed to on-going decline of the rail increasing. The lack of modal integration prevents or
sector. The distinction between Government’s role and the discourages potential rail users from regarding rail rather
roles of other entities has not been clear. Clarity regarding than road as their mode of choice. International experience
the roles and responsibilities of all entities in the industry, (especially in the countries of the North American Free
including all spheres of Government, public agencies and Trade Agreement), has shown that inherently competitive
State owned companies, as well as the private sector, railways can stimulate a return to rail for freight, in
is therefore required. This will facilitate decision-making particular for high-value low-density goods in containers,
regarding the role of rail in the country’s overall transport in which market double stack or heavy intermodal trains
requirements and the investment strategy to realise it, are aggressively competitive. Similarly in Europe, there is
clarify the respective accountabilities, redirect allocation ever-increasing integration of passenger modes at nodal
of resources to appropriate areas, and encourage smooth points. In both regions, this has led to spontaneous
implementation of policy initiatives. development of comprehensive and extensive inter-modal
systems. By contrast, road transport is by far the mode of
2.3.8. Rail Transport Planning
choice in the current South African transport setting, while
A direct and far reaching consequence of the rail sector’s inherently uncompetitive railways do not have the ability
current institutional arrangements and governance structure to successfully complement road transport by offering a
has been the absence of coordinated and integrated competitive alternative on the long haul. This has contributed
planning. Noting that Government envisages integrated significantly to the current imbalance experienced between
transport with rail as its backbone, this means that both road and rail and the lack of intermodalism between these
freight and passenger rail transport should be spoken for modes, despite TFR’s efforts at road-to-rail shift. In order to
before consideration of all other transport modes, so that restore the balance, promote integrated transport systems,
rail planning and development can inform the role of the and support intermodalism, rail must be re-positioned for
latter in the economy and in society. inherent competitiveness through appropriate investment
interventions to compete effectively with road transport so
The National Land Transport Strategic Framework 2006 that it can offer a credible alternative on long hauls.
(NLTSF) is a key enabler in developing South Africa’s transport
infrastructure capabilities. It is derived from provisions in the When reviewing the present outcome of previous rail
National Land Transport Transition Act 22 of 2000, Section
planning, with a view to formalising rail planning for the
21 and embodies the national land transport strategy. The
future, it is important to recognise that constrained funding
NLTSF defines South Africa’s transport objectives, key
inevitably frustrated the achievement of policy objectives. It
strategy areas and national transport key performance
is therefore useful to examine the planning of passenger rail
indicators. National Government has an important role to
and freight rail from separate perspectives.
play in the development of all transport systems and in
establishing the policy framework within which provincial
Although there are exceptions, passenger rail around the
and local governments as well as other stakeholders
world is generally subsidised, also in South Africa, and
act. At present, responsibilities for planning transport
therefore effectively a ward of the state. This is indeed the
infrastructure and systems are spread across all three
present institutional arrangement, PRASA being an agency
spheres of Government, and some plans and strategies
under control of the Department of Transport. Government
within the rail sector, or that affect the rail sector through
therefore controls the amount of funding made available,
substitution of road for rail, have effectively been conceived
and implemented by entities other than Government. To and by extension the contribution that rail can make to
compound this issue, the provision of information and data transport in each of PRASA’s operational areas. However,
by operators to relevant planning authorities is at present the overall outcome is dynamic, because minibus taxis
uncoordinated and inconsistent. compete aggressively with formal transport entities and do
so with neither regulation nor subsidy. In between these two
Furthermore, despite Government‘s commitment to strong players, metropolitan municipalities plan their bus
an integrated transport system, modal competition is public transport services.
49
Long distance rail is a PRASA responsibility in terms of accountability for effective implementation be vested at
rolling stock and operation. The planning function for these national government level. The strategic vision for rail must
items can be well managed within PRASA. However, the be integrated not only with overall strategy for national
Shosholoza Meyl service runs generally on infrastructure transport but should be driven by the wider economic
that is managed by TFR, and therefore planning coordination and social objectives of South Africa. In particular, narrow
needs to take place between PRASA and TFR. commercially objectives of attempting to maintain the status
quo and retain dwindling market share should no longer
By contrast, and although there are exceptions, freight rail guide strategic investment decisions, but should instead
around the world is a commercial activity that is generally not seek to enable approporiate competitive technologies that
subsidised. Freight rail can have one of two drivers. Firstly, will re-establish rail as the logistics and mobility backbone
much of its business is by nature organic, where demand of the economy.
for its services depends on many small, and some larger,
incremental decisions by others. Planning is only realistically It is important to add that the planning must take into
possible at high level, although larger investment decisions account regional realities in the sense that it should
are usually also associated with investment projects recognise the existing protocols and agreements in place
undertaken by major clients or potential clients, such as within the SADC. Revitalisation should be achieved in
mines, and those that are involved in such decisions are conjunction with the development of the region and should
best informed to plan the projects. Secondly, railways have in no way disadvantage South Africa’s neighbours.
at many times been used to develop countries or regions,
including South Africa. Where this is a government initiative, 2.3.9. Skills Development and Job Creation
as development usually is, government is best placed to
plan it. The essence of the reasoning is that freight rail
planning and funding needs to be more nuanced than in
the case of passenger rail. While high level planning of new
freight rail routes would always be initiated by or attract the
interest of Government, rapid response to dynamic market
opportunities would best be managed by those that are
close to the market.
The maritime industry as a vehicle to develop and facilitate

trade plays a pivotal role in the growth and development
of the country. It stimulates intermodalism, development
corridors, regional transport strategies and major
commercial and industrial initiatives for South Africa and
the region. It is a consolidation initiative that should seek to
integrate ports as freight transfer points extending maritime
corridors all the way to dry inland terminals, thus ensuring
South Africa’s trading competitiveness. The National Ports
Authority, established in terms of the National Ports Act, is
mandated to provide or arrange for road and rail access
within ports. This function recognises the need for rail-port
modal integration and supports Government’s vision of
intermodalism and road-to-rail shift.
For the South African rail sector to successfully enter Whereas the rail sector remains one of the largest
renaissance it will be critical that the planning of the employers, job creation, training and skills development
required interventions be co-ordinated and the overall continue to challenge its development and transformation.
50
The industry operates in a highly specialised environment employees with specialist skills10 that are not competitive
that requires scarce and specific skills to support the rail in the South African market, and a lack of policy guidance.
developments and investments currently being rolled out Skills acquisition, or employment, skills development, and
by PRASA and TFR. retention of existing skills is largely seen as inadequate by
market participants and need to be addressed through
The gradual decline of the rail sector over the years and workable and implementable policy positions.
its impact has caused it to disposition itself regarding skills
development and retention. The rail has become unattractive To their credit, entities involved in rejuvenating the sector
as potential employer, attributable to its largely obsolete, are rising to these challenges. Gautrain implemented skills
run down condition and reputation for poor service, and it development and capacity building initiatives to sustain
has failed to lure high-quality jobseekers that could bring socio-economic development in Gauteng. The project
their expertise and skills to the industry. This despite the explored previously disadvantaged areas to select suitable
fact that unemployment in South Africa remains very high at candidates to provide skills in critical areas like project
24.3% or 4.9 million persons in January 2015. management and engineering: Gautrain is not a transport
project only, but should also stimulate investment and
An inherently competitive rail sector would facilitate road- economic growth, create jobs and redress economic
to-rail modal shift, so that it will once again be the transport inequalities from the past. PRASA, through Gibela who
mode of choice, and would lead to a demand for skilled is contracted to deliver PRASA’s new commuter stock,
personnel. The employment drive and associated training is to train and upskill some 19 000 people in various rail
and skills development that would follow revitalisation of the industry skills as part of the broader vision to revitalize the
rail sector would of course be contingent on huge investment once proud local industry. TFR has introduced Strategic
to revitalise it in the first instance. Government is mindful Workforce Planning based on current supply and future
of the urgent need to invest in creation of employment demand, while its School of Rail has achieved ISO 9001
opportunities at operational, technical, managerial and certification and has partnered with the Universities of Cape
senior levels as an integral part of its investment plan to Town and Pretoria for engineering development.
adapt the rail industry to the future.
2.3.10. Economic Regulation
The following challenges currently experienced by the rail Global trends indicate increasing demand for both
sector will also need to be addressed: passenger and freight rail services as the railway
renaissance advances. As the National Rail Policy bears
a) Inadequate market entrants to supply the increasing
fruit by increasing investment and possibly the number and
market demand;
diversity of train operators, the proposed industry model
b) Inadequate critical skills and reluctance of staff to be will call for more decisive governance of rail access, and
retrained to ensure efficient performance of operational possibly competing claims thereon.
and technical tasks;
Currently, all operators using the TFR-owned network
c) Inadequate educational structures addressing rail
negotiate access with TFR, whilst TFR and PRASA
market needs;
negotiate access to tracks owned by the other. A regulatory
d) Inadequate training facilities for railway-specific safety framework to oversee these negotiations is however
critical skills; and lacking. In the absence of State driven regulation, the SOCs
e) Unsuitable human resources mean that railway projects and agencies have self-regulated. The rail industry and the
will be less attractive to current and future investors. wider logistics industry are concerned that current practices
The shortage of skilled personnel is presently viewed relating to setting of fares and tariffs, access to the network
as a threat to many projects. and customer redress processes are not transparent and
These challenges are exacerbated by outdated and 10

These specifically exclude train driver and executive remuneration
inefficient rail training systems, remuneration packages for packages
51
might impact negatively on customers’ businesses and to be re-aligned and/or expanded to accommodate and
commuters’ socio-economic circumstances. Even when support the anticipated institutional and technological
self-regulating, the SOCs and agencies have not achieved changes in the South African rail setting.
the required efficiencies, profitability and service levels, and
have either been cross subsidised from profitable business 2.3.12. Security Management
or have been subsidised from the fiscus. In addition, new
The rail industry no longer satisfies all logistics and mobility
and prospective new players entering the rail sector have
demands, and its contribution to South Africa’s socio-
discovered a dearth of fair and transparent economic
economic development has therefore waned. Both freight
regulatory practices with no recourse to an independent
and passenger rail have suffered the effects of criminal acts
regulatory body. With the envisaged increase in rail services,
such as vandalism and copper cable theft, which impact
clear and appropriate regulation and access arrangements
significantly on their ability to deliver on expectations. Apart
for all operators need to be established.
from the direct loss resulting from such criminal acts, the
more costly knock-on consequence is that they disrupt
2.3.11. Rail Safety Management
Rail Safety is by its very nature a policy issue and is explicitly rail operations, leading to significant loss of confidence
included in Government’s vision for Transport. The National and revenue, and ultimate migration of logistics service
Rail Safety Regulator (RSR) has been established by the providers and passengers to road.
National Railway Safety Regulator Act and mandated to
oversee safety in the South African rail transport industry. Mushrooming informal settlements along rail reserves also
The Act mandates the RSR to, among others, develop pose major safety and security risks. There are instances of
standards and regulations to promote the use of rail as a informal settlements having prevented or frustrated access
mode of transport through improved safety performance. to railway lines for maintenance vehicles and personnel.
It is foreseen that Government’s commitment to rail Aside from unfortunate instances where pedestrians from
revitalisation will require safety standards and regulations informal settlements have been struck by trains while
52
crossing railway lines, there has been an increase of illegal 2.3.13. Funding
or informal pedestrian crossings, where foot traffic disturbs
The heavy haul lines, Ermelo-Richards Bay for coal export,
the ballast bed on which the track is laid to the detriment
and Sishen-Saldanha for iron ore export, and in future
of its safety.
possibly one for manganese export, are closely related
to the fortunes and prospects of their respective mining
After many years of under-investment, the state of the industries. In recent years it has proven difficult for TFR to
existing commuter rail and long-distance transport system align rail capacity investment with global demand for those
has reached crisis levels, and much of its infrastructure commodities, and this had led to South Africa missing the
and rolling stock is inadequate for the requirements of a recent commodities boom. The opportunity cost to South
rapidly changing and modernising society. The services that Africa of foregoing the exports that could have been made
are provided are often unsafe, particularly for vulnerable is substantial, in terms of both jobs and revenue lost to
passengers such as women and the aged, because there competitors in other countries.
is generally insufficient security on trains, at stations and
in passenger catchment areas. Because available feeder The limited funding that can be leveraged off Transnet’s
services are limited, and no alternative public transport is balance sheet has often been upheld as reason why all
available, commuters are easy victims of violent crimes required freight rail investments could not be funded.
such as murder, rape, and robbery, when walking to or from While Transnet’s financial management prudence must be
stations. respected, to the extent that it constrains economic activity
that is in South Africa’s best interests in terms of domestic
In addition to cable theft and vandalism, freight rail is also output, foreign earnings and jobs, alternative funding
vulnerable to pilferage and theft of high value goods, either sources must be allowed or developed. Private sector
from containers or directly out of a wagon. The traditional participation (PSP) has therefore become a significant
freight railway operating model, where the normal state is source of railway renaissance funding. However, the darker
everything stationary and movement is an event, needs to side of PSP may appear in inherently uncompetitive railway
be inverted to minimise opportunities for criminals to strike. settings: If the business proposition is not inherently sound,
High value freight has gravitated to road because it offers cherry picking, asset stripping, and absence of long term
door-to-door service with minimal opportunity for crime vision and objectives may prevail.
en route. Hijacking is of course a road transport problem,
but stopping a container train in section by short circuitng The foregoing funding challenges have resulted in
the two running rails by means of a piece of wire is easy, uncompetitively positioned, ineffectively equipped,
and allows hit and run robbers to quickly unload what operationally inefficient railways that have lost their ability
they want. Thus in addition to all the other expectations to compete with road transport in the local logistics
that customers who move high value freight may have, market, and to support exporters in competing effectively
impenetrable security is also a requirement. in the global market. Unfair advantages available to road
transporters have further eroded rail’s ability to compete
Outside of urban areas, level crossings pose a hazard, effectively in the marketplace. The most pertinent among
mainly to vehicles and their occupants, but also to TFR these are: A high gross vehicle or combination mass limit
in the case of heavy vehicles, more so if they are carrying of 56 tonnes, although a constitutional challenge would
a hazardous material. While inattentive and reckless road likely elicit the response that rail is not fighting back with
users may precipitate a collision, the railway operator is the highest axle load that its genetic technology Bearing
held accountable and expected to bear the externality will allow; high incidence of truck overloading and lack
cost of mitigation. Thus Transnet has recently developed of enforcement of applicable regulations; externality
an impenetrable barrier that deploys automatically when a costs such as congestion, emissions and accidents not
train approaches a level crossing. While safety is assured, internalised into road hauliers’ cost structure; inadequate
the solution is an expensive burden on an innocent party. road infrastructure charging to road hauliers; and
From a policy perspective it is important that this does not government funding support for road infrastructure but not
develop into the last straw that breaks the camel’s back, for freight rail. Other issues such as the ability of marginal
particularly on marginally economic routes. road hauliers to circumvent compliance with driver training
53
standards, vehicle maintenance prescriptions and safe sub-modes of the railway renaissance, Heavy Haul, Heavy
operating practices further increase the unfair advantages intermodal, High-speed Intercity, and Urban Rail. Their
that marginal road operators may enjoy over rail operators. railway interventions have recognised the areas where their
These unfair advantages have exacerbated the rail mode’s inherent competitiveness was not up to the mark, and they
inherent uncompetitiveness in the marketplace, particularly have marshalled funding and other necessary resources to
in terms of prices or rates to users. They have contributed address their shortcomings. With the exception of Brazil,
to rail’s uncompetitiveness in market segments where it itself the fifth largest country in the world that already
ought to be inherently competitive, and in market segments occupies almost half its continent, the BRIC countries
where road ought not to be able to compete with rail at all, aspire to leverage their railways to extend their influence or
such as long-distance conveyance of bulk minerals. strategic horizon far beyond their own territory. Renaissance
rail, particularly freight, is a high volume mode that needs
2.4. Lessons Learned to attract traffic from large catchment areas. Per Metcalfe’s
Law, which states that network value increases as the
As a reference group, the BRIC countries present a coherent square of the number of nodes, global railway networking
approach to moving their railways into renaissance to is the way to go to maximise catchment area size. Two
support their progression to global economic significance. key attributes of BRIC countries are large area and large
They have structured their railway development programs population, and they understand the advantages of large
to move away from their heritage to embrace the four scale railway networking very well.
Table 5: Key Comparative Attributes by Country
Attribute Brazil Russia India China South Africa
Governing Ministry of Ministry of Indian Railway Ministry of Department

Ministry(ies) Transport Transport Board11 Transportation of Transport
& Department
of Public
Enterprises
Intermediary National Land Federal Agency for None State Railways None
Institutions Transport Agency Rail Transport Administration
and VALEC plus Hong
Engineering, Kong Transport
Construction & Department
Railroad Inc. (SOE)
Operators 12 Vertically Russian Railways 15 Zonal Railways China Railways Rail freight SOE
integrated 17 Regions; plus plus Dedicated Corporation plus plus Passenger
concessionaires Russian High- Freight Corridor Corp MTR Corporation Rail Agency
on existing Speed Railway Co; of India Ltd (SPV); (Hong Kong)12 plus
infrastructure Federal Passenger High Speed Rail plus ≈26 local Bombela
Co; Freight One; Corp of India Ltd; and joint venture Concession Co.
Globaltrans; Konkan Railway; railways
JSC High Speed National Capital
Rail Lines; Region Transport
plus 160 other Corporation Ltd; plus
subsidiaries. 9 other PPPs
11
The Railway Board at present functions as a government ministry headed by the Minister of Railways. Note however that per §2.1.2.4.3 incisive
transformation of the entire IR dispensation has been recommended.
12
Hong Kong is a Special Administrative Region and institutional arrangements do not necessarily align with those of the rest of China.
54
Attribute Brazil Russia India China South Africa
Investment Federal Federal Union National Freight:

Funding Sources Government, Government, Government, Government, State-owned
Regional Regional State Regional Enterprise plus
Government, Government, Government, Government, Capital Markets;
State Owned State-owned State Owned State-owned Passenger:
Enterprise, Enterprise, Enterprise, Enterprise, National
Private Sector Private Sector Private Sector Private Sector Government
Participation Participation, Participation, Participation,
Capital Markets World Bank, Foreign Capital Markets
Direct Investment
Market Structure Existing network: Vertically Vertically Integrated Vertically Vertically

Vertically Integrated Integrated Integrated
Integrated;
New network:
Vertically
Separated
3rd Party Access Sole Negotiated access Closed Closed Limited

Concessionaire negotiated
on existing lines; access
Open Access
on new lines
Renaissance High Speed, High Speed, High Speed, High Speed, Heavy Haul,
Achievements Heavy Haul, Heavy Haul, Heavy Haul, Heavy Haul, Urban Rail
Long Stacks, Urban Rail Double Stacks, Double stacks,
Urban Rail Urban Rail Urban Rail
Strategic Occupies half of East Asia–Western North–South Russia- Developmental North-South

Horizon South American Europe Corridor, India Corridor Railway Corridors Corridor,
for railway continent, Russia–India to Africa, Asian Heavy Hauls,
networking currently extending Corridor, and neighbours, General Freight
railway coverage North America Europe, and North Corridors,
to access its full America Branchlines
territory
Heavy Haul Line 82.3 No information No information 400 58.1

Density, tonne- available available
km/route km
All Freight Line 37.2 23.6 10.9 26.9 7.4

Density, tonne-
km/route km
Line Density, 0 1.8 16.6 8.9 0.1

passenger-km/
route km
Overall Line 37.2 25.4 27.5 35.8 7.5

Density, line
density units
The last column shows the parameters for South Africa. It is evidently not aligned with its peers in respect of Governing
Ministries, Institutional Setup, Funding Sources, Renaissance Achievements, Strategic Horizon, Track Gauge and Overall
Line Density.
55
Chapter 3
National Rail Policy Fundamentals and Policy Positions
3.1. Policy Vision and Mission
The National Rail Policy vision is an integrated railway transport system that is efficient, reliable, effective, safe, and
stimulates the economic and social development of South Africa.
The National Rail Policy mission is to lead the development of a sustainable and competitive rail transport industry that
stimulates economic growth and social development including the safe, reliable, efficient, and effective movement of
passengers and freight.
3.2. Strategic Policy Objectives infrastructure and rolling stock investments through
aligning funding sources with application of appropriate
The strategic policy objectives of the National Rail Policy and new technologies.
are, in no particular order:
g) To encourage, introduce and regulate private sector
a) To revitalise the South African rail transport industry, participation in the rail sector where appropriate, to
substantially increasing its performance, turning aid revitalisation, drive development and maximise
around its decline and maximising its utilisation. growth.
b) To provide an enabling environment for South Africa’s h) To facilitate trade between South Africa and its
economic and social development including: partners, to enhance the competitiveness of South
African exports in global markets, and to elevate the
• promotion of SMMEs, co-operatives, rural
role of South Africa in rail transport in the SADC region
development and BBBEE;
and the rest of Africa.
• creation of employment, maintenance and
production capacity in the rail sector; and
• development of rail within appropriate
3.3. Policy Principles
environmental protection legislation.
The National Rail Policy will be guided by the following
principles:
c) To reduce the cost of doing business in South Africa
by maximising the rail freight sector’s contribution to
a) Maximise the competitive and environmental
the national transport task, encouraging the use of the
advantages of rail transport for moving high volumes
most cost-effective transport mode, and promoting
of people and goods;
intermodalism.
b) Encourage appropriate use of rail transport through
d) To provide value-for-money mobility for South Africa’s promoting effective inter-modal planning, efficiency,
citizens and visitors in densely populated urban regulation, facilities and collaboration;
settings a well as in densely travelled long-distance
corridors. c) Retain all State-owned railway network and right-of-
e) To proactively facilitate shifting freight and passengers way in State ownership but, where appropriate, make
from road to rail and to promote rail as the mode it available to the private sector on mutually agreed
of choice by providing an efficient, reliable and safe terms to facilitate private sector participation;
setting for passengers and freight. d) Fund all national rail policy objectives to ensure their
achievement;
f) To establish a governance, institutional and regulatory
framework for managing, operating and maintaining e) Accommodate prospective rail users who are able
railways, as well as to encourage appropriate and willing to fund their rail access and service
57
requirements when incumbent entities are unable to arrangement will remain sufficient for urban commuter
fund the requisite capacity or unwilling to bear the networks. The entire logistics and mobility value chain
investment risk; involving passenger and freight movement should be
recognised, namely airports, dry and maritime ports,
f) Define and regulate private sector participation in maintenance and storage facilities, intermodal facilities,
railway investment, operations and maintenance, loading and unloading facilities, railways, roads, stations,
where it may be introduced, to ensure accessible, warehousing and more.
affordable and effective service delivery to present and
prospective railway users; The National Rail Policy envisages private sector
participation or investment in projects where Government
g) Institute independent economic regulation by or State Owned Companies cannot presently afford to
government of the national rail network in respect of invest, or where the private sector is better positioned to
all operators to ensure fairness and transparency; manage the risk. Where appropriate, PSP will extend to
negotiated third party access to necessary portions of the
h) Subsidies, where provided, must be transparent, national railway network, subject to regulation by the Single
targeted and monitored; Transport Economic Regulator.
i) Safety and security for railway passengers and freight In accordance with the provisions of the National Land
are of prime importance; Transport Act and the National Development Plan,
that transport functions are to be assigned to the most
j) Adequately protect and secure railway assets and appropriate sphere of Government, the National Rail
those of customers; and Policy will provide for the creation of capacity in the
local government sphere. The operational subsidies for
k) Underpin the formulation and implementation urban commuter rail will eventually be devolved to local
of National Rail Policy and resulting actions by governments when the necessary capacity has been
consultation with affected and interested stakeholders. created and they are ready and able to manage these as
part of their Integrated Transport Plans. Urban commuter
3.4. Policy Statement rail will continue to be operated by Metrorail.
The fundamental purpose of the National Rail Policy is Key to the success of the rail revitalisation interventions
to revitalise the railway industry in South Africa through will be centralised coordination of rail policy and strategic
the implementation of strategic investment-led policy planning in the National Government sphere through the
interventions. These interventions will aim at repositioning Department of Transport, the recently established Interim
both passenger and freight rail for inherent competitiveness, Railway Economic Regulator, and ultimately the envisaged
by exploiting rail’s genetic technologies to increase axle Single Transport Economic Regulator, which will provide
load, speed and train length across the board. regulatory oversight of railway economic aspects including,
but not limited to, funding adequacy, access to the rail
To achieve this, the National Rail Policy envisages investing network, market entry and exit, service levels, rates and
in a world class high performance new network comprising, tariffs, and commercial dispute resolution.
where appropriate, high density freight- and passenger
corridors, to move South African railways into renaissance, The National Rail Policy furthermore will serve to provide
and so recapture rail’s proper share of the national transport clear direction on interventions that will promote skills
task in a developmental economy. Underpinned by wider- development and job creation within the industry and
gauge technologies as the most rational foundation for ensure the safety and security of its users. Detailed policy
South Africa’s future rail network, this investment will target positions underpinning these statements are outlined in the
selected high volume sections of the national freight and following sections.
passenger rail networks, while the existing narrow gauge
58
3.5. Recommended Policy Positions The following guidelines will inform the investment-led
revitalisation intervention:
3.5.1. Recommended Policy Position - Investment
a) National Government must drive the investment
Government recognises the urgent need for rail revitalisation
strategy and decision making, guided by its economic,
and will provide the necessary policy direction and facilitate
social and National Rail Policy objectives;
the necessary resources for the revitalisation intervention to
be successful. Rail revitalisation in this context means: b) Re-focus the South African core railway network on
value to the national economy, with due regard for
a) Halting and reversing the decline of the rail sector by
the requirements of freight traffic, as well as regional-
setting a rail strategy and investment path;
and long distance passenger traffic, and without
compromising the economic potential of the heavy
b) Investing in the rail sector to position it to compete
haul export lines;
effectively and sustainably in the local transport market
and support exporters in global markets;
c) Gear investment to re-gauging infrastructure, where
appropriate, for the world class new high performance
c) Stimulating railway renaissance by deploying High-
network, to maximise inherent competitiveness and
speed Intercity, Heavy Haul, Double Stacking or
capacity;
Heavy Intermodal, and contemporary Urban Rail
where appropriate;
d) Transnet, under direction from Government, would
manage investment in the new network infrastructure,
d) Positioning the rail sector to aggressively exploit the
although it would not necessarily provide the total
rail mode’s inherently competitive technologies;
funding required;
e) Improving the overall performance levels of the rail

e) Retain a vertically integrated core railway network
sector, and ultimately those of the rail industry;
operated by TFR, who will provide access to PRASA
for regional and long-distance passenger trains as well
f) Increasing economic growth and social development;
as to private operators, subject to third party access
and
agreements and regulation by the STER;
g) Establishing rail as the backbone of the South African

f) TFR should invest in freight rolling stock to meet the
transport industry of the future.
demands of its customers, but where it is unable
or unwilling to do so, it should allow private sector
The revitalisation design will best suit the current industry
participants to step up to the opportunity;
disposition and achieve the above objectives most
effectively. As part of the process, the National Rail Policy g) Align PRASA passenger rail capital investment with
will provide clear guidelines on revitalising the rail sector. the overall investment strategy. For urban rail, this
Thereafter, an investment-led intervention will focus on means infrastructure plus rolling stock: For regional-
raising rail’s inherent competitiveness by investing in and long-distance services this means rolling stock
appropriate assets to move the rail sector onto as many as that can best exploit the prevailing national railway
possible of its renaissance growth curves. It is submitted network;
that this can only be achieved by investing in a minimalist
high performance network that can move railways into h) PRASA will continue to operate long-distance and
renaissance, and so to function as the backbone of the regional passenger services under the guidance and
national transport task. However, the contribution that support of DoT;
efficiency can play in improving South African railways
performance is also recognized, therefore operational i) Government supports environmental protection as well
efficiency is also recommended. as hedging South Africa against imported fuel price
59
instability and rising environmental costs. Investment imperatives and logistics pressures. Future strategic rail
in repositioning rail for inherent competitiveness will investment decisions will be driven by Government’s
shift freight and passengers from road to rail. In turn vision of a modern railway that will drive economic growth.
this will leverage rail’s green credentials to reduce the TFR as owner of the network assets will be responsible
amount of energy consumed in respect of traffic shifted for managing the rail infrastructure life cycle, including
by some three quarters, and correspondingly reduce investment, development, operation, maintenance, as well
greenhouse gas emissions, thereby contributing as concessioning and leasing if and when applicable.
significantly to the country’s environmental objectives.
3.5.1.1.2. A New High Performance Network
Primary investment decisions will by their nature call for
Government recognises that for general freight as well
supportive investments in track and its gauge, lineside and
as regional and long distance passenger operations to
fixed structures, and rolling stock. Although PRASA and
become inherently competitive, a move to a new high
TFR have begun investing in new equipment, much of what
performance network is required. DoT has undertaken
currently exists is in no condition to support revitalisation.
a cost benefit pre-feasibility analysis, and prima facie a
It is emphasised that investment to achieve inherent
positive cost benefit ratio was found. Among others, the
competitiveness needs to be supported by all other elements
cost benefit pre-feasibility analysis was predicated on
of good railway governance and positioning, i.e. adequate
upgrading or renewing infrastructure more or less on its
and sustainable investment, fair economic regulation,
current alignment. This Green Paper phase is too early
competent management, nimble market responsiveness,
to speculate on detail design, but once underway, value
and more. Investment interventions which will be required
engineering would find the best solution. This could result
in each of these areas are set out below.
in either the current alignment being upgraded, or new
alignment being built to take advantage of the opportunity
3.5.1.1. Infrastructure and Track Gauge
to eliminate current bottlenecks and weaknesses, but most
3.5.1.1.1. The Plan and its Justification likely a blend of both approaches will prevail.
Investment in infrastructure will focus on increasing rail’s

Due to narrow gauge rail’s low inherent competitiveness, and
ability to compete in market spaces where it has potential to
its consequent inability to aggressively gain market share,
win back substantial contestable or rail-friendly freight- and
road hauliers are able to secure entry into the rail friendly
passenger traffic from other transport modes, particularly
freight market, even going so far as to make significant
road, especially in high density corridors. Government
inroads into the market for natural heavy haul freight. They
is therefore committed to a comprehensive upgrade and
are able to do so because the trucks that they import are
renewal of infrastructure to position railways at the centre of
bred to compete against the best of global standard gauge
South Africa’s freight and passenger transportation. There
and broad gauge railways. Maintaining the status quo will
is an urgent need to create an inherently competitive high
prolong a dispensation structurally skewed in favour of
performance new network, where possible by upgrading or
road transport, with the high costs, high emissions, high
re-gauging portions of the existing network, otherwise by
congestion, and high maintenance that goes with it.
new alignments, to respond to future social and economic
60
3.5.1.1.3. The Position of Urban Rail and the Narrow inherently competitive market spaces, namely full strength
Gauge Network Heavy Haul, Double Stacking, High-speed Intercity,
and contemporary Urban Rail. Continued investment in
Where appropriate, as in the case of urban rail, relevant
sustaining a technological dispensation that is rooted in
portions of the existing narrow gauge network should
colonial standards will be ineffective.
continue to be used, and they should be maintained
normally and extended where justified. The rest of the narrow
Some stakeholders have difficulty in appreciating that
gauge network will either be exploited where business and
the four post-renaissance market spaces in which rail is
or strategic considerations so require, or otherwise be
intensely competitive require substantial investment, as
disposed of as mentioned in §3.5.2.2. As an overall guiding
proposed later in this Green Paper, which in turn requires
principle, Government will recognise and plan for routes
high line density (expressed as passenger-km per route km,
that would be appropriate for re-gauging, so as to roll out
or tonne-km per route km) to support that investment. To
and exploit the railway renaissance in South Africa.
restate and emphasise the point, post-renaissance rail is a
In the light of the life-expired condition of most assets, and high capacity or high speed (or both) transport mode suited
their inherent uncompetitiveness, Government will also be only to corridors where the traffic potential is high enough
careful not to renew or to replace inherently uncompetitive to justify the requisite investment. South Africa’s present
narrow gauge assets, which for a similar quantum of and projected economic geography indicate that such high
investment could and should be replaced by inherently density routes will constitute a smaller core railway network
competitive re-gauged assets. than the current one. While such a solution may disappoint
stakeholders that expect ubiquitous rail service at any
3.5.1.1.4. Cross-impact Between Interventions cost, it does offer a viable resolution of the country’s track
gauge dilemma, and ultimately of its freight rail, as well as
It is important to recognise that the cross-impact between
its regional and long-distance passenger rail challenges. It
some of the proposed policy interventions can be complex.
will enable rail to compete effectively against other transport
It is therefore important to identify and address those
modes, and to complement them in intermodal service
complexities to avoid frustrated outcomes and unintended
arrangements, thereby delivering the road-to-rail shift that
consequences during investment rollout. In particular, it
will reduce road traffic congestion, reduce non-renewable
appears that some stakeholders find difficulty in appreciating
fuel consumption, reduce their associated emissions,
the implications of interventions in the following two areas.
reduce road accidents, reduce the high cost of logistics,
The first area concerns the modalities of migrating from
and increase South Africa’s competitiveness in global
narrow gauge to a standard gauge track. South Africa
markets.
seems to find itself in a dilemma regarding its contending
options of refurbishing the entire existing network, which
To spell out the implications in detail, the proposed
would perpetuate its unsustainability, and re-gauging
investment solution would result in an intensely competitive,
it, which would be unaffordable. Not to re-gauge would
high performance railway network of about 10 000 track-
shut out the railway renaissance and let South Africa fall
km. It will be able to attract both freight and passenger traffic
further and further behind the Assertive, Progressive, and
from road, and to serve as backbone of the country’s land
Enlightened railways of the world in all but the urban rail
transport infrastructure. This in turn will stimulate voluntary
market space.
participation in the intermodalism sought by policy makers
and transport professionals. But the process cannot even
South Africa needs to face this dilemma squarely:
commence without commitment to re-gauging to create
Substantial investment in revitalising railways will not achieve
a high performance network, where feasible, and all that
its intended purpose without addressing the track gauge
goes with that.
issue, private sector participation and railway economic
regulation. To ensure that new investment actually raises
The second area concerns aspirations to revitalise branch
rail’s inherent competitiveness vis-à-vis road, it should
lines. Investment in an intensely competitive re-gauged
be directed to projects that enter one or more of rail’s
high performance new network in many respects mutually
61
excludes significant support for existing branch lines, unless and uncompetitive railway assets rather than raised
they carry sufficient traffic to support re-gauging them. The inherent competitiveness, and that the introduction of new
obvious difference in track gauge can exceptionally be rolling stock and technologies into the system is therefore
accommodated by deploying gauge-changing rolling stock, imperative. The current sustaining capital investments in
as in Japan and Spain. However, the more insidious issue is South Africa’s ageing railway system are not productive
that of axle load differences between branch lines and the in terms of delivering future capacity demand, meeting
core network. It is an issue even with the present relatively customer performance expectations and reducing logistics-,
low axle loads on the core network. Raising axle loads on mobility- and maintenance costs. In general, global
a re-gauged high performance new network to as high as technology advances in passenger- and freight rail have
32.4 tonnes per axle would render much lighter branch moved far beyond the local assortment of mostly obsolete
line traffic an expensive hindrance (in terms of opportunity general freight, urban, regional and long distance passenger
cost) on high performance routes. Road could provide rail equipment. A substantial range of new technologies has
more flexible and lower cost solutions in many instances. evolved globally, which have made available attractive rail
It is therefore important that stakeholders be sensitive to solutions. However, to stimulate railway renaissance, they
the hard realities of where rail can and cannot compete must in the first instance increase inherent competitiveness
effectively against road. Where rail cannot compete against through higher axle load, higher speed, and longer trains.
road, stakeholders should participate actively in seeking
alternative solutions rather than clinging to outdated notions
that lead to frustration.
3.5.1.1.5. Timing
The timing of the investment and the re-gauging of the

network, where necessary, is critical as it determines the
likelihood of getting the intended outcome, therefore the
timing has to be perfect. The timing for investment and re-
gauging will be strongly influenced by capacity requirements
and demand, amongst other variables. Gauge change will
also be determined on a case by case basis, pending the
feasibility studies that will be conducted.
3.5.1.2. Rolling Stock and Technology
Government recognises that continued and repeated

refurbishment and rehabilitation has propped up obsolete
62
Thus PRASA’s forthcoming new commuter EMU trains are instruments secured by sovereign guarantee. Third, through
positioned to offer attractive service. However, to the extent Private Sector Participation (PSP) in a potentially deep and
that TFR’s routes include 20-tonne axle loads, 60km/h wide range of projects where private sector willingness to
wagons, and 40-wagon trains, its recently announced fund and the ability to manage risk can launch projects
acquisition program for 1064 locomotives and associated that otherwise would not come to fruition. Fourth, debt
investments do not maximise the value of the intervention. and equity financing, where the state is not involved, such
as heavy haul railways that are an integral part of a mining
Government is committed to introducing new rolling stock investment.
and technologies to the freight and passenger rail sectors. The
massive investment required will be guided by appropriate Government will consider ways to attract additional capital
planning mechanisms13 and be driven by demand, network to finance investment in rail. The enormity of the investment
development and track gauge decisions. Government required in achieving rail revitalisation is recognised and it is
has facilitated establishment of local manufacturing plants clear that existing resources will be inadequate to fund all
to supply adequate quantities of passenger and freight requirements. The private sector has a key role to play in
rolling stock suitable for local requirements as determined growing the economy and creating jobs, however, private
by the revitalisation interventions. They will spearhead the sector investors seek to earn a return on their investment
opportunities promoted and described in the Industrial that is equal to the risk. The private sector will therefore be
Policy Action Plan 2 (IPAP2), within the transport industry attracted to profitable opportunities with manageable risk.
and therefore be at the centre of economic development. Government’s role in creating an investment-friendly
environment is to change business fundamentals and
Continued local research and development in the rolling remove regulatory uncertainty so as to encourage and
stock and rail technology fields is considered an investment enable the private sector to play its natural role in the
priority. It will enhance the quality of rolling stock and economy. Government will invite private sector participation
technology utilised in the local rail industry and will support to invest in projects where it cannot presently afford to invest
optimum investment decisions. The intellectual property or where private sector participation can demonstrate value
accumulated by this approach will contribute significantly for money.
to rail revitalisation by building a sustainable indigenous rail
industry. Such research and development would ultimately Potential private sector funding models include private
enable the South African rail industry to not only build but involvement in operations or the provision of assets such
also design rolling stock and other technology applications as rolling stock; Public-Private Partnerships; leveraging
specifically for the local market. the commercial value of railway land and the development
opportunities around stations, and debt or equity financing.
3.5.2. Recommended Policy Position - Funding Any of these can be applied to secure funding in rail assets.
and Private Sector Participation Furthermore, the rail network has a high potential for asset
Noting how the BRIC countries as relevant reference group sharing opportunities and PPP initiatives, particularly in the
have set about funding their railway renaissance, it is evident rail-linked logistics sector.
that similar substantial scope and potential for funding has
not yet been tapped in South Africa. Essentially four sources In promoting private sector participation, negotiated third
of funding are available. First, the traditional source through party access to the core rail network is anticipated. The
financial instruments secured by the assets of a State impact of regulatory uncertainty on private sector investment
owned entity. Gearing may be encouraged or restrained by is recognised and a framework will be developed that
whether or not lenders have legal recourse to the State. protects the interests of different types of private investors
Second, where substantial funding may be required to and manages the perception of risk. The establishment of
reposition an entity to restore its inherent competitiveness rail economic regulation under the STER will create a legal
ahead of earning a return, directly by the fiscus or through framework that is clear, objective and neutral between
public and private operators and sets clear tariff regulation
to reduce revenue risk.
13
See section 3.5.5
63
To minimise disruption of existing institutional arrangements air pollution and greenhouse gas emissions, accidents, and
and smooth the transition to a new funding dispensation, it more.
is proposed to use existing Government entities as vehicles
to procure and manage concessions, leases, PPPs and TFR, as the custodian of the national freight network, will
any other legitimate private sector participation contractual have first right of refusal to operate any existing branch line.
vehicle that aligns with government policy. Economically non-viable branch lines that TFR refuses to
operate, which any sphere of Government categorises as
It is important to appreciate that a large portion of unfulfilled Strategic and on which it requires rail service for whatever
demand for rail service simply defaults to road. This reason, developmental, strategic, or other, must willingly
outcome runs counter to the desired road-to-rail shift. be sponsored by that sphere of Government in respect
SOCs involved in procuring PSP transactions will therefore of the difference between any revenue collected and the
need to ensure that they present themselves as attractive actual cost to TFR of carrying and maintaining the line. Train
partners to potential investors and structure their approval operations could be provided by TFR or by a concessionaire
processes to make quick decisions. to TFR, for the account of the sponsor.
Government, through its SOCs and Agencies, will retain Economically viable or marginal branch lines that TFR refuses
ultimate ownership of all below- rail infrastructure assets, to operate, and that are categorised as Non-strategic, are to
although they may be made available where appropriate on be concessioned at Government discretion to stakeholders
long term concession or lease to facilitate PSP in below- that may include provincial or local government, private
rail infrastructure investment for a sufficiently long period to sector investors, and affected local entities such as industry,
amortise the investment. in a vertically integrated arrangement. Train operations and
infrastructure maintenance would in such instances be
Government recognises that PSP has a more natural provided by the concessionaire. The concession terms
affinity with freight rail than with passenger rail, because should not require private sector investment in infrastructure,
freight rail is closely related to real markets where one can but should nevertheless permit concessionaires to invest
structure finance around a project. Passenger rail usually in infrastructure at their discretion and risk, in which case
attracts developmental and social obligations that are best the concession period should be sufficiently long to allow
funded by a government. While bankable projects can and recovery of such investment. It is recognised that in these
have been structured in the passenger rail sector, PSP cases the only viable solution might be to harvest the
is more likely to appear in the guise of services provided residual value by running down the assets.
to government funded projects, such as operations and
maintenance, which are amenable to outsourcing. Branch lines that have neither developmental nor
strategic value and fail to attract interest from prospective
3.5.2.1. Branch lines concessionaires should be decommissioned and formally
withdrawn from service. If economically feasible, track
Government recognises that although the economic viability should be recovered. Right-of-way may re-acquire value
of branch lines may be in question, in certain instances at some time in the future, for example when it becomes
they may nevertheless have a role to play in South Africa’s opportune to extract mineral wealth say by fracking South
wider social and economic objectives. It is therefore Africa’s shale gas deposits and large scale transport of
recommended that, for policy purposes, branch lines be fracking materials and extracted product is required. It
categorised as Strategic and Non-strategic. Identifying should therefore be retained by TFR in perpetuity.
the criteria that qualify a branch line as Strategic would
be a railway economic regulation function. Considerations TFR will continue to operate and maintain all currently active
may include food security (e.g. grain), developmental branch lines until appropriate concessioning or disposal
infrastructure, the traffic volume to be transported, road arrangements have been finalised. It is expected that
congestion and the impact on maintenance of secondary Government discretion, as mentioned in this section, would
roads, socio-economic benefits to uplift rural communities, be exercised by the STER.
64
3.5.3. Recommended Policy Position - a similar cross-border dispensation with neighbouring

Interconnectivity with Neighbouring countries. Such operations have the potential to promote
Countries and the rest of Africa intra-African trade and facilitate economic and socio-
economic integration of the continent, but they do raise the
The SADC Protocol on Transport encourages member
states to promote economically viable integrated transport issue of cabotage, or the right of foreign registered entities
services in the region and facilitate seamless, efficient, to operate transport services within a particular territory.
predictable, cost-effective, safe and environmentally- This is a thorny issue in intra-African shipping, and has not
friendly railway service that responds to market needs yet been broached in the rail sector, so it would need to be
and provides access to major centres of population and placed on the engagement agenda. Note that while wagons
economic activity. Although interoperability is not explicitly and coaches have for from the outset freely crossed South
addressed, it is nevertheless implicitly accepted. Africa’s national borders, from a practical perspective train
drivers need to be certified for the route on which they drive
and they therefore only cross national borders to agreed
Government recognises that investing in inherently
competitive rail technologies in South Africa will raise the interchange stations near the border. Cabotage would thus
require train drivers to be certified in more than one country.
dilemma of interoperability with neighbouring countries.
In principle, locomotives may work across national borders,
Yet allowing interoperability considerations with respect
but two key considerations should be recognised. They
to relatively smaller traffic volumes between neighbours to
may be equipped with radio communication and movement
dominate resolving the inherent uncompetitiveness of the
authorisation systems, which if not compatible may not cross
relatively larger current and potential volumes within South
the border. Furthermore, few operators entrust operation
Africa, will frustrate South Africa’s railway renaissance.
and maintenance of their expensive locomotives to others.
Access to neighbouring countries is thus a critical issue:
Small locomotive leasing businesses have nevertheless
The ideal solution is to concurrently support renaissance in
emerged, and the last constraint may be easing somewhat.
South Africa as well as uninterrupted rail traffic to and from
It goes without saying that extant railway safety regulation
neighbouring countries.
would apply. The Railway Safety Regulator and Southern
African Railway Association are already involved, including
In the light of standard gauge developments in equatorial
also interoperability matters.
Africa and in line with the fundamental investment-led
intervention proposed herein, and further afield, SA’s
Regarding the mechanics, South Africa could commence
national rail policy should not turn a blind eye to continental
building a wider gauge high performance national new
networking. South Africa will therefore have to coordinate
network for general freight plus regional and long distance
very carefully with the SADC Region in its consideration
passenger services. Where desirable and workable, it would
and implementation of a wider track gauge, if required and
recycle existing right-of-way and dual-gauge portions
feasible. The following modalities are proposed to respect
where relatively short distances of shared right-of-way
good neighbourliness:
are required. Access to some neighbouring countries and
branch lines may be achieved by deploying rolling stock
In the first instance South Africa needs to engage with variable gauge axles. Botswana and Namibia currently
neighbouring countries and their railways in dialogue. In an have relatively low traffic volumes, so variable gauge axles
era of continental and intercontinental railway networking, with gauge change at respectively Mafikeng and De Aar
no single country can go it alone. This will start with South would be appropriate. Mozambique potentially has higher
Africa’s position on wider gauge and also concern their traffic volume, so dual-gauging the approximately 80km
development trajectory. Ultimately it will develop into a from Ressano Garcia to Maputo would be appropriate.
wide-ranging strategic conversation. Zimbabwe and further north, and Swaziland at present,
have relatively low traffic volumes, but the countries
Recognising admission of equitably negotiated third party are landlocked: Therefore retain the existing narrow-
access on South Africa’s railway network to promote private gauge route to South African ports, namely Beit Bridge -
sector participation, it would be interesting to entertain Soekmekaar - Komatipoort - Swaziland - Richards Bay -
65
Durban. Gauge change with the South African wider gauge policy implementation, strategic planning and provision of
new network at Soekmekaar. Future South African traffic leadership. This applies equally to freight and passenger
through Swaziland might justify portions of dual gauge. The transport.
underlying rationale, as developed during Spain’s change
from broad gauge to standard gauge, is to initially develop National Government’s role overall will further be to facilitate
an anchor standard gauge network, and use variable gauge the wider functioning of rail, providing for the development
axles to serve destinations outside its reach. As gauge of specific rail services that are not sustainable without
changing progresses, the gauge change sites are moved government assistance, as well as nurturing those services
ever outward, and in the case of South Africa might not which are essential for the country’s trade. All policy
necessarily be on international borders, but could well be and high-level planning decisions relating to future rail
inside or outside the country, depending on how traffic revitalisation, including the necessary investment strategies
flows, operating arrangements, and future developments will be developed and co-ordinated by the DoT.
are optimised. From this beginning, it will be possible to
expand the wider gauge network further into Africa as The formulation of an investment strategy as part of a
opportunities arise. national rail strategy, which would incorporate planning for
all sources of funding including any government funding
3.5.4. Recommended Policy Position - for rail transport, will be through the DoT as part of the
Institutional Arrangements
integrated approach to transport planning.
Schedule 4 Part A of the Constitution assigns Public The Department of Public Enterprises, as shareholder’s
Transport as a functional area over which both the National representative of Transnet, will continue to provide overall
and Provincial government spheres have concurrent governance and oversight in ensuring that Transnet
jurisdiction, whilst Local Government has a responsibility effectively fulfils its mandate as envisioned in the revitalisation
for Municipal Public Transport.14 interventions prescribed by the National Rail Policy.
Government believes that the institutional framework 3.5.4.2. The Role of Provincial Governments
envisaged by existing legislation including the NLTA is
According to the NLTA, Provincial government is
appropriate. It is the lack of an effective National Rail
responsible for the formulation of provincial transport
Policy to guide and co-ordinate strategic planning at a
policy and strategy, within the framework of national policy
national level that has inevitably resulted in fragmented
and strategy, planning, co-ordination and facilitation of
and disjointed decision making across the rail sector. It
land transport functions in the province. Note that the
is therefore not the intention of the National Rail Policy to
NLTA stipulates that Provincial Government must perform
“re-legislate” institutional structures that have already been
these functions within the framework of national policy
legislated but to ensure that the objectives and sequencing
and strategy. In the case of rail, it is critical that Provincial
of the proposed revitalisation interventions are centrally co-
Governments align their plans with the objectives and
ordinated and effectively implemented by the respective
spheres of Government and other role-players under the sequencing of the interventions specified in the National
auspices of the PICC. Rail Policy and the associated national plans and strategies
developed by National Government through the DoT. This
3.5.4.1. The Role of National Government is essential if the revitalisation of rail and its envisioned role
as the backbone of an integrated transport system is to be
Transport Policy and Strategy are the responsibility of the
realised.
Minister of Transport, while all other spheres and agencies
of government are stakeholders, with whom it is appropriate
Where appropriate and in line with the objectives of the
that the DoT consults. Accordingly, the DoT will ultimately
National Rail Policy, National Government may assign current
be responsible for policy formulation, co-ordination of
obligations in respect of future regional or interprovincial rail
service delivery to Provincial Government.
14
See section 1.3.2
66
Where Metropolitan and local municipalities can benefit 3.5.4.4. The Role of Operators and
from the integration of public transport across metropolitan Infrastructure Owners
and local municipal boundaries, individual authorities PRASA and TFR are Government’s enablers as operators in
involved may establish a coordinating body at a higher the rail sector. Services will be provided by operators, which
level. Coordination should, however, follow a bottom-up may be SOCs, or the private sector, or a combination of any
approach, with the organisational structure rising no higher of them. Operators will be responsible for service delivery,
than is necessary to achieve its purpose. Such bodies management and maintenance of the rolling stock utilised
could typically contract rail services, coordinate transport by them, infrastructure owned by them, concessioned to
services, undertake long-term planning and raise funding. them or leased by them. The latter will be undertaken in
The intervention is intended to address the fragmentation accordance with the principles and guidelines set out in the
of public transport governance and bring together public National Rail Policy and by Government from time to time.
transport services under a single strategic body in order Freight rail will continue to be exclusively operated by TFR
to provide faster, more efficient and affordable transport on a vertically integrated basis except in those cases where
services, even though the various networks will remain the private sector participates, when those operations may
independent in terms of ownership and operation. be run exclusively by private operators or a combination
of TFR and private operators. Commuter rail (except
In the interim, regional and interprovincial passenger where Local Government has capacity), long-distance and
services will be delivered on infrastructure owned by Regional passenger rail will continue to be operated by
TFR, under performance-based service level agreements PRASA under the guidance and support of DoT.
between the DoT and PRASA.
Ultimate ownership of all below rail infrastructure will remain
3.5.4.3. The Role of Local Governments with Transnet and PRASA (on behalf of Government)
regardless of any private sector participation. The
The NLTA envisages that land transport functions be
maintenance and refurbishment of these assets will
assigned to the most appropriate sphere of government.
therefore remain the responsibility of TFR and PRASA unless
This includes, among other, Local Government requesting
otherwise agreed in whatever private sector participation
assignment of functions from either DoT or the provinces arrangements that may emerge.
where such a Local Government has already developed
acceptable integrated transport plans. PRASA and TFR will be responsible for managing the
implementation of the investment initiatives envisioned
It is important that local rail services be procured and in the revitalisation interventions prescribed in the
managed at Local Government level as far as possible, to National Rail Policy and associated strategic plans unless
ensure consistency with local Integrated Transport Plans otherwise agreed in whatever private sector participation
and urban development programmes. However, many arrangements may emerge.
Local Governments do not yet have the required capacity
to fulfil this role. Urban commuter rail will therefore continue 3.5.5. Recommended Policy Position - Rail
to be operated by PRASA and delivered under performance Transport Planning
based Service Level Agreements between DoT and PRASA.
The DoT will be responsible for developing a National Rail
Only operational subsidies will be devolved to Local
Master Plan (NRMP) which will set out a collaborative,
Governments, allowing them to enter into Service Level
consistent and sustainable approach to rail transport
Agreements with PRASA. The integration of rail with other planning, which can be applied nationally, at provincial and
transport modes, performance management of PRASA, at municipal levels. The document will provide a greater
and other sub-contracted entities, and the development level of detail for application by practitioners than the
and administration of budgets for all transport modes, NLTSF, which provides a higher level of strategic guidance.
including commuter rail services, will be conducted at Local The NRMP will be developed in order to centralise and
Government level. co-ordinate all rail planning in South Africa and will be
67
an integral part of the National Transport Master Plan. At its core, the NRMP must be a mechanism for the
Legislation enabling the National Rail Policy will give effect implementation of the revitalisation interventions outlined in
and direction to these plans ensuring that the objectives the National Rail Policy. Because the basis for revitalisation
and interventions prescribed in the National Rail Policy form that is proposed is an investment-led intervention, a key
the foundations for rail planning. subset of the NRMP will be the National Rail Investment
Plan which will define the investment strategy required
Due to the integrated nature of transport planning and the to revitalise rail and determine the amount of funding
relatively complex nature of rail’s institutional structure, required, the sources of that funding and its application,
submissions and inputs to the planning process from to build a re-gauged new network for general freight as
relevant rail stakeholders will form an essential part of the well as regional and long-distance passenger services.
planning process. Planning and communication between The proposed industry structure outlined in the NRMP will
the relevant bodies, principally DoT, DPE, Provincial inform the strategy to be followed in the prioritisation of
Government, Local Government, Transnet, PRASA and key both freight and passenger/commuter rail structures, the
private sector participants will be co-ordinated by the DoT. levels of private and public participation, and consequently
Government is committed to optimum integrated transport the requirements and sources of funding. A co-ordinated
planning. For that reason all role-players responsible for approach to infrastructure investment will be a prerequisite
providing information and submissions for the planning for integrated transport infrastructure delivery.
process will be required by the DoT to make the information
available. The three spheres of Government will provide A summary of the proposed planning structure across the
directives regarding the exact information that will be spheres of Government is presented in Figure 2 below.
required and the intervals at which it must be provided and
to whom.
Figure 2: Proposed planning structure across the spheres of Government
National Land
National Land National White Paper on
Transport
Transport Act Transport Master Plan National
Strategic
(NLTA) (NATMAP) Transport Policy
Famework
National Rail Policy
National Rail Act
National Rail Master Plan
National Rail Investment Plan
Provincial Policy
Provincial Land Transport Frameworks
Provincial Planning
Local Integrated Transport Plans
68
The National Rail Policy and by extension the NRMP

will support Government’s vision of integrated transport
systems. All future transport planning efforts will be combined
with land use planning. Integrated planning approaches
will optimise the application of each mode’s inherent
competitive advantages in providing the best transport
solution for freight and passengers. It is recognised that
rail will not be appropriate for all locations. Consideration
will be given to the needs of the relevant market and/
or community. In each case, the relative competitive
advantages of the applicable modes will be considered.
The National Rail Policy will recognise that the inherent
competitiveness of participating modes, in particular rail in
the present context, is an essential driver of intermodalism
to ensure that it will be fostered by incentives and not by
regulation, as envisaged by the White Paper on National
Transport Policy. Freight transport customers typically have
multiple modal choices. Intermodal movements will only
occur if the constituent hauls plus the cost of transhipment
can undercut the cost of a single haul on a mode that offers
door-to-door capability.
The National Rail Policy will also recognise the natural

pipeline-rail interface to maximise the rail distribution of
products beyond pipeline terminals.
3.5.6. Recommended Policy Position - Skills

Development and Job Creation
An estimated 750 000 jobs will be created during the

construction of the re-gauged new network. Investment
in development and job creation should be guided to
provide for rail employment and rail skills development.
A competitive, revitalised rail industry will set the stage
to attract potential job seekers. The need for skilled
personnel and expertise will increase exponentially and
many opportunities for job seekers will become available.
The required employment drive and skills development
programme, which will include initiatives to attract and
retain new talent and more competitive incentive packages,
will require massive funding.
The National Rail Investment Plan will provide for investment

in skills development and job creation within the rail sector,
driven by the following:
a) The actual skills required;
69
b) Principles underlying Government’s BBBEE and HDI shadowing of existing staff, bursary grants and
policies; internships, and apprenticeships;
c) Opportunities for disabled persons; d) Review existing facilities and theoretical and practical
training programmes, to establish a basis for revitalising
d) Principles preventing job discrimination against people apprenticeships, providing skills development
facing certain health conditions; and opportunities, and ultimately achieving employability
and employment in the railway industry;
e) The employment drive must be accompanied by an
e) Integrate and co-operate between the various role
aggressive marketing effort to promote the industry as
players and Government with regard to skills and
an employer of choice for the future.
training needs; and
Government therefore recognises that rail skills development f) Introduce more attractive employment packages,
and job creation are essential and is committed to making long term benefits and incentives that will encourage
this an important part of the process of revitalising and employees to remain within the industry.
developing the rail sector by meaningful investment.
DoT, in partnership with other stakeholders, will support the
The development of a local locomotive manufacturing skills investment drive. The above initiatives will be funded
industry has also been prioritised to support the drive for mostly by means of existing government routes such as
rail skills development and ultimately create employment the SETAs, skills transfer programmes and bursaries, but
opportunities at a scale identified within the New Growth also by elevating certain rail industry personnel to scarce
Path and the Industrial Policy Framework. Where feasible and critical skills resources that will unlock further funding
in the construction and maintenance of the rail network, and protection for the industry. The development of tax and
government and the industry must consider labour intensive further skills levy incentives to stimulate private investment
methods to promote the creation of work opportunities and partnerships in skills training, directly associated with
through the Expanded Public Works Programme. the rail industry, will be explored.
In support of the above investment initiative, Government 3.5.7. Recommended Policy Position - Regulation
recognises the requirement for revised and up-to-date The DoT recognises that multiple stakeholders pursuing
training programmes that would address the requirements different interests will require economic regulation to ensure
of the revitalised industry. To achieve this, current training fairness and long-term sustainability of the rail sector. As
techniques, curriculum material and learning aids will be interim measure, the DoT has established an Interim rail
reviewed to address training inadequacies. Partnerships economic regulatory capacity. The Ministers of Transport
will be established with existing training institutions to and Public Enterprises have entered into a Memorandum of
address the specific training needs of current and future rail Understanding to establish a Ministerial Task Team as part of
employees. developing economic regulatory capacity for the rail sector.
It comprises an independent Chairperson, a regulatory
Investment in skills will be guided towards the following: expert, a rail industry expert, and nominated officials from
National Treasury, Department of Public Enterprises and
a) Establish continuous training programmes specific to
Department of Transport. Within the limits of its mandate,
the rail industry, with updated training manuals and
the Ministerial Task Team will develop a nucleus of skills
institutions;
and capacity regarding rail sector economic regulation
b) Develop rail-specific education at existing tertiary and provide necessary advice and recommendations
education centres such as at Pretoria and to the Ministers of Transport and Public Enterprises on
Witwatersrand universities; issues including price setting, access to the network
and dispute resolution. Over the next two years data will
c) Introduce alternative training methods such as be collected from rail operators and analysed regarding
70
structure and performance of the rail sector, and operator The envisaged STER functions will be executed
network use and access, to determine what economic independently of operators and/or service providers in the
regulatory interventions need to be made in the rail sector. transport sector and will be directly accountable to the
As permanent measure, the forthcoming Single Transport Minister of Transport, to whom the envisaged STER will
Economic Regulator (STER) will regulate the rail sector as report periodically on the status and performance of the
a subset of regulating all transport modes. The envisaged railway sector.
STER will play a fundamental part in the success of railway
revitalisation by addressing those aspects of interventions Passenger rail fares for PRASA will be set and overseen
that require interaction between multiple actors. The by the National Public Transport Regulator as part of wider
intention of economic regulation of the rail sector is to: public transport funding policy decisions. However, the
envisaged STER will be proactively involved in developing
a) Ensure reasonable access and fair pricing to train frameworks for the benchmarking and evaluation of tariffs.
operators; The existing RSR and the forthcoming STER will work
closely together through a memorandum of understanding
b) Regulate market entry and exit, service levels, approve because their respective responsibilities will be separate.
tariffs and resolve commercial disputes; Environmental matters arising in respect of railways,
together with associated legislative and regulatory
c) Exercise economic regulation in line with prevailing
compliance, will continue to be managed by the Department
national economic policy and national strategic
of Environmental Affairs. Regulatory bodies such as The
objectives;
National Public Transport Regulator are provided for
specifically in the NLTA.
d) Regulate the provision of adequate, affordable and
efficient rail infrastructure and services;
3.5.8. Recommended Policy Position – Safety
e) Promote regulated competition; Management
f) Promote equity of access to rail infrastructure and The RSR was established in terms of the National Railway
services, as well as to investment opportunities where Safety Regulator Act, Act 16 of 2002, and is, in terms of
relevant; Section 5 of the said Act responsible to:
g) Promote investment in rail equipment, infrastructure a) Oversee safety in the railway transport industry;
and services; b) Promote the use of rail as a mode of transportation
h) Address railway interoperability between neighbouring through improved safety performance in the railway
states. transport industry;
i) Determine fair and reasonable tariffs for using rail c) Develop any regulations that are required in terms of
infrastructure and services, which will inform the the said Act;
approval of tariff requests received from the respective
entities; and d) Monitor and ensure compliance with the said Act; and
j) Investigate complaints and conduct market enquiries e) Give effect to the objectives of the said Act.
were necessary.
Rail safety will form an integral part of rail revitalisation. In
Additional responsibilities of the forthcoming STER will the execution of its responsibilities, the RSR should seek
include research, performance monitoring and compliance to ensure that its activities and decisions impact on the
activities, as well as intervening to prevent abuse of industry in a way that would support and promote rail
market power and to facilitate dispute resolution between revitalisation. The RSR may develop and issue standards
operators, customers, investors and other stakeholders. in order to achieve the objectives of the Act and may, in
71
addition, monitor and ensure compliance with the Act. In First line defence will be by operator owned or outsourced
this instance, the RSR has the authority to guide the rail security services, which will be responsible mainly to
industry with regard to rail safety and to ensure that the protect personnel and assets, as well as manage safety
industry responds accordingly. and security in the rail setting. Fixed facility requirements
should also be addressed, including lighting levels, CCTV
3.5.9. Recommended Policy Position – Security coverage, placement of emergency telephones, perimeter
Management protection and more should that be necessary.
Rail must be a safe mode of transport for patronage to

Additional security requirements may be provided for and
increase. Co-operation between railway network, station,
specified in SLAs between rail operator and infrastructure
and train operators; private or external security companies
owner. Examples would include managing the number
and the Railway Police, is critical in addressing the safety and
of customer service personnel and security guards on
security challenges in the rail setting. Providing protection
passenger trains and at stations, providing armed guards
and security for rail assets, goods and passengers at
on trains conveying high value freight, requiring a security
railway stations and yards, as well as on board freight and
plan to outline the deployment of security staff and other
passenger trains, must be seen in the context of the need
initiatives on an annual basis.
to provide reasonable security at other transport facilities,
routes and public premises throughout the country. Network and train operators and station managers will
develop security plans to improve the safety of the public
Law enforcement on trains constitutes a challenge as trains and assets in their custody on and around the railway. The
traverse various jurisdictions en route, while the authority network manager, with Government through its agencies,
to enforce laws falls only within a specific jurisdiction. will ensure that railway infrastructure is protected from
Nevertheless, the introduction of dedicated railway policing vandalism, theft and sabotage.
has contributed to containing this issue, and the SAPS
Protection and Security Services Division (Railway Police) It should be mentioned that in South Africa, Gautrain
will continue to be responsible for law enforcement within exemplifies realisation of all the above mentioned security
the rail environment. measures.
72
Chapter 4
Way Forward
The Green Paper outlined recommended policy positions by Government priority, the needs of the country as well
that will be discussed and debated during the Green Paper as the SOCs and Agencies. The Plan will recommend the
and White Paper consultation phases of the National Rail sequencing of infrastructure projects, strongly influenced by
Policy development process. Post stakeholder consultation, efficiency considering the limited resources. The Plan will
the White Paper will be submitted for approval. Once the also indicate the likely timelines for the various identified
White Paper has been approved, the Department will infrastructure projects.
commence with developing the National Rail Act which will
make some of the policy positions legally binding for the rail Although the development of Master Plan will be led by
sector. the Department, it will be developed in close collaboration
and consultation with critical stakeholders such as the
To ensure successful implementation of the National SOCs, Agencies, all three spheres of government (relevant
Rail Policy which will ensure the South African railway Departments), as well as rail experts and logistics experts.
revitalisation and renaissance, some of the interventions
have to be prioritised considering capacity and financial
4.1.2. Define and Scope the Rail Revitalisation
limitations in the sector. Priorities have been identified to
Programme
ensure the achievement of the goals and objectives of the
rail policy. The Department will define and scope a rail revitalisation
programme designed to direct the rail investment processes
4.1. Policy Implementation Priorities in a way that accelerates achievement of policy objectives
and maximises the return on investment.
The implementation priorities for the National Rail Policy are
as follows: 4.1.3. Develop a National Rail Investment
Strategy
4.1.1. Develop of a National Rail Master Plan
The National Investment Strategy will form a fundamental
The Department through its Rail Planning Unit will develop part of the NRMP. The Department will develop a
a National Rail Master Plan (NRMP) which will form part comprehensive investment strategy that will guide both
of the National Transport Master Plan (NATMAP). The public and private sector investment in rail. Funding options
Master Plan is a national strategic plan which will direct and models for railway investment will be explored as part
infrastructure initiatives over the next 30 years. The Master of the strategy.
Plan will ensure centralized strategic rail planning. It will
detail the vision, goals and objectives for rail going forward. 4.1.4. Develop a Branch Line Strategy
The Master Plan will also identify network constraints
The Department, in collaboration and consultation with
and opportunities, as well as the required infrastructure
critical stakeholders, is in the process of developing a
improvements/expansions to ensure the safe and efficient
national strategy on the revitalisation and development of
movement of passengers and freight.
branch lines. Key to the strategy will be the identification
The Master Plan will detail the status quo in rail, particularly, of strategic and non-strategic branch lines which will guide
provide an overview of passenger and freight trends, the interventions and investment decisions.
requirements/ needs in the sector, challenges, and forecast
the expected demand, amongst others. 4.2. Policy Co-ordination Mechanisms
The Master Plan will map a National, Provincial, and local A National Rail Policy Steering Committee has been
view of the country’s network, also indicating the current established, comprising the DoT and DPE. The Steering
and future infrastructure projects, the various corridors, the Committee is co-chaired by the DGs of Transport and
capacity of each line, the characteristics, etc. Public Enterprises and reports to the Ministers respectively.
The Steering Committee will steer, monitor and provide
The Master plan will in essence identify infrastructure strategic direction in the implementation of the National Rail
projects and prioritise the projects, which will be informed Policy.
74
Because policy implementation will require large-scale DPE and National Treasury, Rural Development, Agriculture,
investment, a robust governance structure is essential, COGTA, Mineral Resources, as well as PRASA and TFR
with appropriate representation mandated by public sector will form part of the task team. The task team will report
financial and organisational legislation. Considering that the to the Steering Committee. The role-players for facilitating
National Rail Policy will impact on all spheres of Government policy implementation and their functions are illustrated in
and across various Departments, an Inter-Departmental the diagram below:
Task Team will be established to drive implementation. DoT,
Figure 3: Role players for policy implementation and their functions
Minister of Transport
Steering &
National Rail Policy Steering Committee Monitoring
Implementation
Facilitate
RAIL EXPERTS
Inter-Departmental Task Team
Implementation
Budget &
Planning
Stakeholder Stakeholder Stakeholder Stakeholder Stakeholder
75
4.3. Policy Monitoring and Evaluation years have demonstrated their ability to absorb a huge
quantum of capital without increasing their competitiveness
The implementation of the policy will be monitored by at all. In short, their generally declining performance in the
the Department using identified indicators to measure face of substantial capital investment affirms their inherent
performance and identify deviations and reasons for unsustainability. It is however acknowledged that a change
those deviations, thereby taking corrective action where in gauge, where feasible, cannot happen at the turn of a
necessary. The policy will be evaluated after a certain period switch, therefore the current network has to be maintained
(5 – 10 years) post implementation to determine the impact at safe operating standards and also upgraded to cater for
of the policy on the sector and establish whether there is a the current and future demand.
need for a policy change or amendment.
The policy options to remedy the problem are limited.
4.4 Conclusion The status quo regarding the national network, urban rail
conditionally excluded, has proven itself to be unsustainable;
In recent years it has become patently obvious to all that further investment therein is therefore untenable. To convert
railways in South Africa have lagged increasingly far behind the entire network to a high performance network would
those railways that have participated in that renaissance, be unaffordable and also unnecessary. This Green Paper
in particular its BRIC peer group, until they are no longer therefore recommended policy positions that pragmatically
able to compete effectively against other transport modes follow a fine line between unsustainability and unaffordability
in delivering their rightful share of the national freight and to position railways in South Africa to participate in the
passenger transport task, nor are they able to support railway renaissance. They promote investment in a
South Africa’s exports into the global market. smaller but higher performance re-gauged network that
can position freight and passenger rail to be aggressively
This Green Paper has shown that South Africa’s colonial competitive in market spaces where they can exploit rail’s
railway origins have embedded constraints into the strengths, thereby re-establish rail as the backbone of land
fabric of its narrow gauge railways that preclude them transport in South Africa. This intervention will facilitate the
from participating in the railway renaissance. Indeed, the desired road-to-rail shift, allow rail to lead intermodalism,
substantial sustaining capital investments that have been and reduce congestion, fuel consumption, and harmful
made in South Africa’s narrow gauge railways in recent emissions.
76
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NATIONAL RAIL POLICY

Director: Rail Policy and Strategy Development

The National Rail Policy Green Paper is published on www.transport.gov.za

2.1. Global Experience........................................................................................................................................... 19

2.3.11. Rail Safety Management.................................................................................................................................. 52

Figure 1: Railway Market Spaces................................................................................................................................ 21

Table 1: Classification of the South African Rail Network ............................................................................................. 9

Abbreviations and Definitions

PRASA Passenger Rail Agency of South Africa

Concessionaire The holder or operator of a concession.

General Freight Freight not defined in terms of the goods transported.

National Railway The contiguous network owned by State companies.

Rail The transport mode provided by railways.

White Paper A parliamentary paper enunciating government policy.

Foreword by the Minister of

The National Development Plan 2030 vision alludes to

Executive Summary them. Evidently existing legislation and transport policy

1.1. Background that enable it to adapt to the qualities required of well-

During the 1980s South Africa faced severe capital

Regarding freight rail, most branch line traffic was lost

By contrast, two important positive steps during this phase

Classification Distance Characteristics

Table 2: Comparative Rail and Road Market Shares over Time

Market Share of Total

2.1. Global Experience 2.1.1.1.2. Emergence of New Growth Curves and

State ownership incurs additional governance complexity

2.1.1.5. Generic Outcomes 2.1.2. Examples of Realising Railway Renaissance

j) Promote new standard gauge railways in several

c) Cooperate with Russia to build a high speed line from

2.1.4.1. Forms of Railway Economic Regulation

Recall that the De Villiers Report (1986) found that SATS

Underutilised railway infrastructure is thus not an underlying

Table 3: Comparative Line Densities for Selected Railways

Key Performance Indicator Standard Gauge Narrow Gauge Ratio

(CSIR, 2013: 46).

The maritime industry as a vehicle to develop and facilitate

These challenges are exacerbated by outdated and 10

Table 5: Key Comparative Attributes by Country

Attribute Brazil Russia India China South Africa

Governing Ministry of Ministry of Indian Railway Ministry of Department

Attribute Brazil Russia India China South Africa

Investment Federal Federal Union National Freight:

Market Structure Existing network: Vertically Vertically Integrated Vertically Vertically

3rd Party Access Sole Negotiated access Closed Closed Limited

Strategic Occupies half of East Asia–Western North–South Russia- Developmental North-South

Heavy Haul Line 82.3 No information No information 400 58.1

All Freight Line 37.2 23.6 10.9 26.9 7.4

Line Density, 0 1.8 16.6 8.9 0.1

Overall Line 37.2 25.4 27.5 35.8 7.5

3.1. Policy Vision and Mission

e) Improving the overall performance levels of the rail

g) Establishing rail as the backbone of the South African

Investment in infrastructure will focus on increasing rail’s

The timing of the investment and the re-gauging of the

3.5.1.2. Rolling Stock and Technology

Government recognises that continued and repeated

3.5.3. Recommended Policy Position - a similar cross-border dispensation with neighbouring

Figure 2: Proposed planning structure across the spheres of Government

National Rail Policy