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Railway Transport Updated Report Available
BY Liz Kneale
South Africa
27 October 2015
R 2 040.00 (ZAR)  
estimated $ 123.49 (USD) *
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Railway Transport


This report covers passenger and freight transportation by rail, sectors characterised by decades of ageing infrastructure, poor maintenance and lack of investment. During the past few years low economic growth, the drop in commodity prices, low manufacturing and mining output and electricity constraints, have all had a negative effect on Transnet Freight Rail’s freight rail volumes. PRASA’s Mainline Passenger Services have also seen dwindling numbers with statistics for 2013/14 showing 1 million passengers were carried on long distance services compared to 3 million in 2009/10.


Investment Programmes


PRASA and Transnet are implementing huge capital investment programmes to revitalise the rail industry and to create rail capacity ahead of expected demand, to enable a shift of traffic from road to rail. The passenger division will implement a R123.5bn Rolling Stock Renewal Programme supported by programmes to increase capacity and upgrade stations and national signalling systems while Transnet’s Market Demand Strategy will invest R336.6bn on capital projects over a seven-year period.


Enabling Legislation


Strategic investment-led policy interventions aligned to the Government’s National Development Plan are being introduced to support the revitalisation of the railway industry. Government has already published the Green Paper on National Rail Policy for comment and a Single Transport Economic Regulator (STER) to address the regulatory shortcomings across the transport sector has been proposed. Meanwhile the Department of Transport plans to develop and implement the Private Sector Participation (PSP) Framework for ports and freight rail.


Report Coverage


The report on the South African Railway sector focuses on the current state of the sector, developments within the sector and factors influencing the success of the industry. The report profiles seven companies including the two state-owned enterprises as well as independent entities, Bombela Operating Company (Pty) Ltd, the operator and maintainer of the Gautrain and Grindrod Rail Operations (Pty) Ltd, which has a fleet of 65 locomotives.


Page
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Supply Chain 5
2.2. Geographic Position 6
3. SIZE OF THE INDUSTRY 9
3.1. Passenger Rail Services: PRASA 10
3.2. Passenger Rail Services: Gautrain 11
3.3. Freight Rail Services 11
4. STATE OF THE INDUSTRY 16
4.1. Local 16
4.1.1. Passenger Rail Services 18
4.1.2. Passenger Rail Services: Gautrain 20
4.1.3. Freight Rail Services 21
4.1.4. Corporate Actions 24
4.1.5. Regulations and Government Programmes 24
4.1.6. Enterprise Development and Social Economic Development 27
4.2. Continental 30
4.2.1. Passenger Rail Services 31
4.2.2. Freight Rail Services 31
4.3. International 33
5. INFLUENCING FACTORS 35
5.1. Green Paper on National Rail Policy 35
5.2. Improved Regulatory Oversight 36
5.3. Investment in Rolling Stock and Rail Infrastructure 37
5.4. The Movement from Road to Rail 44
5.5. Private Sector Participation (PSP) 47
5.6. Economic Environment 49
5.7. Challenges and Issues Facing the Mining Industry 51
5.8. Rising Operating Costs 53
5.9. Technology, Research and Development (R&D) and Innovation 54
5.10. Labour 57
5.11. Cyclicality 61
5.12. Environmental Concerns 62
5.13. Safety and Security 64
5.14. Electricity Supply Constraints 66
5.15. Government Initiatives 67
6. COMPETITION 68
6.1. Barriers to Entry 70
7. SWOT ANALYSIS 71
8. OUTLOOK 72
9. INDUSTRY ASSOCIATIONS 73
10. REFERENCES 73
10.1. Publications 73
10.2. Websites 75
APPENDIX 1 77
Rail Operators Excluding PRASA, TFR and Gautrain 77
APPENDIX 2 83
Transnet Freight Rail Business Units: Commodities and Critical Train Flows 83
APPENDIX 3 86
Current and Future Rail-Related Projects on African Continent 86
APPENDIX 4 89
TETA: Rail Sector Scarce Skills 89
COMPANY PROFILES 91
African Rail and Traction Services (Pty) Ltd 91
Bombela Operating Company (Pty) Ltd 93
Grindrod Corridor Management (Pty) Ltd 95
Grindrod Rail Operations (Pty) Ltd 97
Passenger Rail Agency of South Africa 99
SAFreight Logistics (Pty) Ltd 103
Transnet SOC Ltd 105