Tag Archive | rail freight

Green Paper on rail transport published

sent to clients 12 October…..

National rail policy mapped out…..

metrorailA Green Paper on South Africa’s National Rail Policy has been published for comment naming the country’s challenges in rail transportation, recommending policy direction and containing broad proposals for the way forward to develop the current rail network.

Gazetted recently, the Green Paper represents work commenced in 2010 and says the document “Seeks to revitalise the local railway industry by means of strategic policy interventions”.   Not only is freight rail included in the proposals but long-distance rail passenger and localised commuter services.

Road dominates at a cost

Minister Peters said in a media statement at the time that railways in South Africa had operated for almost more than a century without a proper overarching policy framework to guide development.   “The railway line and its railway stations have played a pivotal role in the day-to-day lives of communities, especially those in the rural areas, but as far as freight is concerned, 89% of freight is still transported by road and the future of commuter rail conducted on an ad hoc basis”.

roadsThe emphasis of road transport is costing the country millions of rands annually in road maintenance, money that could have been well spent on developing freight rail, she said.

The process

Cabinet last month approved the release of the Green Paper for public consultation. When all is finished, a final White Paper on National Rail Policy will be released to guide and direct development of infrastructure and develop more modern commuter systems. A National Rail Act will be the final result of the White Paper.

These interventions, according to Minister Peters, will reposition both passenger and freight rail for inherent competitiveness by “exploiting rail’s genetic technologies to increase axle load, speed, and train length.“

Lining things up

railway lineWider-gauge technologies are on the cards.   The government has said it is converting 20 000km of track to standard gauge from the narrower Cape gauge. This would bring the network in line with an African Union resolution on the subject and at the same time would boost capacity of goods carried, with longer trains and a reduction in transportation costs.

With both passenger and freight rail falling within its scope, part of the envisaged national transport policy includes involvement by the department of transport (DOT) in the local government sphere to create capabilities to move more passengers by rail with infrastructure, more rail line and technical assistance.

Creating local commuter rail

Secondly, once the localised capacity is in place, DOT says it will be able to appropriate subsidies for urban commuter rail, the management of the mini-systems then being devolved to municipalities themselves.

The Green Paper talks of investment and funding, private sector participation, inter-connection with the sub-Continent, skills planning, investment strategies and the start of a regulatory system.     Part of the master plan at operations level would include a branch line strategy with the private sector involved to improve connection between cities with towns and industrial areas.

Other articles in this category or as background

Transnet improves on road to rail switch – ParlyReportSA

South Africa remains without rail plan – ParlyReportSA

Minister comments on taxi and rail plans – ParlyReportSA

PRASA gets its rail commuter plan started – ParlyReport

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Transnet improves on road to rail switch

Transnet tries new formats…..

Troad railerransnet is piloting an innovative rail wagon termed a “road railer” which can use both rail track and the road system, all in further efforts to recover its loss of haulage to the private road sector, enter new markets and to improve turnaround times.   Addressing the Portfolio Committee on Public Enterprises on Transnet’s third quarter performance, Ravi Nair, Marketing and Operations Manager, said that this was one of the innovative pilot programmes in Transnet’s engineering facilities, which included also a flat rail wagon onto which private investors could invest with their own wagon specifications to meet tailored products hauled by Transnet rail. The meeting was specifically held to study Transnet’s road to rail strategy and progress.  Matters regarding Passenger Rail Agency (PRASA) were not involved.

Automotive industry important

Transnet, Ravi Nair said, were also introducing specialised wagons to meet the greater traffic needs of the automotive industry because of the introduction of SUVs and other wider bodied road vehicles, Ravi Nair said. The improvement of siding facilities for customers with necessary off loading equipment was also being undertaken as part of the general view taken of a strategy to improve the road to rail switch. It was noted that rail traffic with the automotive industry had greatly increased at the expense of road haulage. Nair said that on the whole there had been a 28% improvement in turnaround on the Durban/Gauteng line with an improvement in Duran harbour with new crane installations and container handling facilities.  An average turnaround time of 23hrs had been reduced to 18hrs for the trip.

Gauteng terminal reducing blockage

high-density-container-terminal-picture-credit-getty-imagesRaisile Letibe of Transnet said that the City Deep terminal in Johannesburg was due for further investment in sidings, warehousing and equipment. Throughout Transnet, a principle had been adopted that where maintaining line and signalling that had gone way beyond its age and maintenance was a waste of money, all line, signalling and switching gear was being replaced if maintenance was deemed necessary. Approximately 450 new locomotives were starting to pass through Transnet’s new plant at Kodooesberg, Pretoria, this being GE and South China Railway (CSR) locomotives of which some 100 CSR type had already emerged. Only 10 were built by CSR in China during the training period.

Hauling more

In mining terms, these locos will be able to improve a haul of 75 wagons up to 150 for magnetite, up to 200 wagons for manganese and probably double whatever was required with chrome, all possible according to the different class of locomotive used in the new range. The balance of Bombardier and China North locomotives will be built in Transnet’s Durban engineeringbombardier train works, taking the total number for Transnet freight haulage locos to well over 1,000. Transnet took advantage of a R50bn loan from China to conclude these contracts with the main operators and their BEE constituents, Transnet said. However, as things stood at present there was a general increase of 19% turnabout in mining haulage with increases for steel and cement, agriculture and bulk liquids and a major improvement in automotive products haulage and general manufacturing all recorded.

Freight and commuters

A daily meeting was now held with the Passenger Railway Agency (PRASA) on frequency of needs for commuters and the need for haulage of goods on the same track and the system was working well. There was a common understanding on signalling use and track needs at certain hours in cities and to industrial areas. PRASA were also engaged on their  massive development of commuter locomotives and carriages, or “trains” and the integration of both the needs of Transnet and PRASA were being satisfactorily co-ordinated, Transnet commented. rail sidings Raisile Letibe said that R300m had been invested in branch lines to attempt to keep them in shape for concessionaires when the plan to privatise branch lines was finalised. He said that the matter of branch lines brought Transnet with into contact with many other bodies involved in developmental matters including agricultural development, SEZ planning and rural development generally.

Private investment: branch lines

It was hoped to get the issue of the development of branch lines underway as soon as possible. Opposition members complained that this proposal was five or six years old. Under questioning, Transnet admitted that major “challenges” at the moment were breakdown of locomotives, all of which were now aged and parts had to be especially engineered a bought. Wagon availability was also a problem but both these “challenges” should be addressed by new rail stock. Industrial action and economic conditions contributed to the problems facing Transnet but to a lesser degree.

Rural outreach

Parliamentarians continued to be intrigued with the idea of a “road railer” which served the double purpose to become an off-rail road transport trailer. Nair, in answer to questions on this, said probably the private sector would be called in on road haulage issues to rural destinations and the system was used in many other parts of the world. A prototype was being constructed at the Transnet engineering workshops. Nair said that a number of bi-lateral meetings were being held with SADC countries, DRC, Mozambique and Namibia all with the purpose of improving volumes of haulage, particularly in Zambia where copper could be moved despite that country’s plans to open a rail link to the West Coast. However, the general purpose also was to strengthen economic growth through rail in the Southern Region. MPs all agreed that it was good news that at least one state utility in their portfolio was improving. Other articles in this category or as background Transnet says freight rail operations coming right Operation Phakisa to develop merchant shipping – ParlyReportSA Transnet doing better but resists carving up its assets South Africa remains without rail plan – ParlyReportSA Minister comments on taxi and rail plans – ParlyReportSA

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South Africa remains without rail plan

 Feature article….

Minister Peters fails on rail policy…

dipou Peters2In a written reply to Parliament on the whereabouts of the promised Green Paper on rail policy, transport minister Dipuo Peters told her questioners that such a document which has the intention of outlining South Africa’s rail policy was to be presented to cabinet in November. GCIS statements for cabinet meetings for November and the final cabinet statement in December 2014 made no reference to any such submission having been made – alternatively, the minister might have failed to have it put on the agenda. The country therefore went into Christmas recess once again without an established government policy on both freight and passenger rail transport matters, worrying both industrialists, investors and, not the least, built environment planners.

Just talking together

A draft Green Paper was first submitted to cabinet a year ago but cabinet instructed that more consultation on the proposals was necessary, particularly interchange between the transport and public enterprises departments. The portfolio committee on transport stated that policy on freight rail upgrading and infrastructure development was unclear, plans for commuter and long-distance passenger services confused and no clear picture had emerged on Transnet’s promised policy of structural re-organisation. Subsequent to this, the department set up a national rail policy steering committee to oversee the consultation process and introduce the required changes to policy. It has also divested itself of a number of non-core assets but no clear picture has emerged in statements on the promised policy of giving direction on the privatisation of branch lines.

Since time began…

According to the minister at the time, cabinet’s concerns had also involved the adoption of a standard gauge, private sector participation and economic regulation.  Subsequently, DoT indicated that standard gauge has been selected as the most suitable gauge for the South African rail network and as a result a final revised Green Paper was tabled before the steering committee in October 2014. Nothing has emerged. In the absence of any agreed policy, particularly to meet the proposed idea of rail freight re-assuming its dominant role over road transport in the light of the deteriorating national road picture, a number of developments have indeed taken place with regard to the purchase of diesel and electric train stock, signal systems upgrades and station re-building and passenger coach rolling stock manufacture. Nevertheless, no clear picture has emerged on the road ahead with regard to the freight/road picture, branch line privatisation, commencement dates for full long distance passenger services nor satisfactory plans and targets expressed on domestic commuter rail services.

All said before

Jeremy Cronin, when deputy transport minister, told Parliament in April 2011 that by establishing a local manufacturing base for the new rolling stock, benefits would ensue by creating a substantial number of local jobs. He added that as a result of the redevelopment of rail engineering capacity, skills that have been lost over decades of underinvestment in the local rail engineering industry would be recovered. The then deputy minister also said, “We are currently (2011) in the Green Paper phase with the primary objective of preparing the way for effective stake holder engagement. We are poised to reverse the decline in our critical rail sector that began in the mid-1970s and gathered pace in the late 1980’s.” In April 2015 therefore the country will be the fourth year of waiting for South Africa to outline its rail policy, “a system critically in decline” according to minister Cronin.

Recent update from Maties

A few months ago, a most important paper on rail transport, now in the in the hands of DoT, was published and out into the public domain by Dr Jan Havenga, director: centre for supply chain management, department of logistics, Stellenbosch University, who led a team of transport logistics experts to complete this erudite and informed report. The report is entitled “South Africa’s freight rail reform: a demand-driven perspective” and opens with a definition of government’s responsibilities in rail transport matters. “The role of the government is, primarily, to facilitate the development of a long-term logistics strategy that optimally equilibrates demand and supply through ‘anticipation’ of the market character.” “The definition of a national network of road and rail infrastructure and their intermodal connections will flow from this, presupposing neutrality across modes by taking full account of all relevant social, environmental, economic and land-use factors.” “This ensures that the mix of transport modes reflects their intrinsic efficiency, rather than government policies and regulations that favour one mode over another. The strategy is subsequently enabled by a clearly defined freight policy, a single funding regime for the national network and, lastly, the establishment of appropriate regulatory framework.”

Volume of freight critical

The report notes that “the American Trucking Association (2013) forecasts that intermodal rail will continue to be the fastest-growing freight mode in the next decade. Only the very busiest railway networks, which can exploit the density potential of volume growth, are likely to generate sufficiently high financial returns to attract substantial risk capital in long-term railway infrastructure.” “The Association of American Railroads as well in 2013 also highlights the impact of density on efficiency, revenue and, ultimately, the ability to reinvest.”

Lacking in market intelligence

Dr Havenga says, “The failure of South Africa’s freight railway to capture this market is attributable to a lack of policy direction regarding the role of the two modes (road and rail) in the surface freight transport industry and according to the Development Bank of Southern Africa, caused by the absence of sufficient market intelligence to inform policy.” He goes on to confirm that “one of the key requirements for an efficient national freight transport system is better national coordination based on market-driven approaches.”

Pressing need

“To avoid the ad hoc policy responses of the previous century, which led to sub-optimisation, increasing complexity and decreasing end-user quality, the pressing reform issue for South Africa, therefore, is agreement on the design of an optimal freight logistics network based on a market-driven long-term strategy that holistically addresses the country’s surface freight transport requirements.” Dr. Havenga’s final comment in the report, only a few weeks old, states that South Africa’s freight task is expected to treble over the next 30 years, with further concentration on the long-distance corridors. He points out that the country desperately needs a profit-driven market related core rail network to serve industry and manufacturing, as well as a developmental-driven branch line network to serve rural development. Other articles in this category or as background http://parlyreportsa.co.za/transport/minister-comments-taxis-e-tolls-road-rail/ http://parlyreportsa.co.za/finance-economic/prasa-gets-its-rail-commuter-plan-started/ http://parlyreportsa.co.za/uncategorized/transnet-says-freight-rail-operations-coming-right/ http://parlyreportsa.co.za/uncategorized/rail-is-departments-main-focus-in-year-ahead/

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New Customs Duty Bill opposed by BUSA

SARS customs duty bill to close inland ports…

portsharboursThe newly tabled  Customs Duty Bill, with its two enabling Bills, were the subject of  vehement objections from Johannesburg Chamber of Commerce (JCCI) and Business Unity SA (BUSA), who both led the charge against the SARS proposals tabled by National Treasury.

This was in the  in the form of the vehement objections to the Customs Duty Bill, the Customs and Excise Amendment Bill and the Customs Control Bill, which propose that the principle of inland ports be scrapped and all clearances for imported goods be conducted at SA coastal locations.

Nevertheless, the Bills were eventually passed before the present government ended after an extended session of the NCOP to provide concurrence.

JCCI said that this would not only upset SADC and sub-Saharan  importers but also cause unintended consequences such as the “death of such inland ports as City Deep in Johannesburg” aside from inconveniencing local importers generally.

They said that many importers having now to be responsible for the movement of goods up the Durban/Johannesburg corridor would switch from rail to road freight to complete the import journey, thus placing further strain on Durban /Johannesburg road systems.

Transnet to become nonviable

Such unintended consequences , it was felt by JCCI, whilst of no consequence to SARS who were obviously only interested in the current losses of tax revenues by evasion, illegal imports  and corruption would result in serious strain for existing importers and make Transnet targets impossible.

Also, they said in their submission, the moves would cause further congestions at coastal ports and that the SARS proposals were in conflict with normal practices allowed for by the WTO.

Currently, JCCI told parliamentarians, only 20% of imports were being received through the Durban/Johannesburg corridor destined for movement by Transnet, who were in the process of spending enormous sums of money on infrastructure and rolling stock to change this imbalance. Now was not the time to encourage more road freight, they said.

BUSA weighs in

BUSA said that such radical changes of insisting that the three day customs clearance required by importers at port of entry, if construed as coastal only, was an unacceptable arrangement and although two alternative options were offered by SARS, neither had been found to be acceptable.

It was the wrong time to make such changes, said BUSA, and SARS should re-consider its approach and new ways found to reduce their losses of revenue in duty.

Also BUSA complained of the high penalties proposed for late clearances of goods if the proposed three day notice was not met and that new approaches should be considered generally that incorporated and embraced the concepts declared by the minister of trade and industry who has stated he wants to increase South Africa’s sub-Saharan business.

The concept of removing City Deep as a customs clearance point was akin to changing a practice that had existed for 37 years, JCCI noted.

SARS unmoved by the arguments presented.

(SARS responses to these submissions is in a later story on this website)

Earlier articles on this subject:
http://parlyreportsa.co.za//energy/fueloilrenewables/illegal-diesel-coming-in-from-mozambique/
http://parlyreportsa.co.za//finance-economic/one-stop-border-post-with-mozambique-almost-there/

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