Transnet unveils framework for private rail access
Transnet’s critical rail Network Statement has been published and widely welcomed as a key enabler to facilitate third-party access to South Africa’s railway amid ongoing reform.
The Network Statement, which was gazetted by the Department of Transport on 20 December, has set the framework for private sector participation in rail.
The document, and the stipulated railing tariff, has been widely welcomed by industry.
Business Unity South Africa, a key industry body, welcomed the development as an “exciting and significant” milestone in the journey toward meaningful rail sector reform in the country.
The proposed tariffs for private operators in the earlier draft Network Statement had been a key point of concern for industry, but the approved document has now set out a tariffs structure, which Jan Havenga, logistics expert and advisor to the National Logistics Crisis Committee, has described as “exactly correct”.
Traxtion, a private rail operator that has been delivering rail solutions in sub-Saharan Africa for more than three decades, welcomed the multi-tiered tariff, which it noted is aligned with international best practice.
Transnet Freight Rail had previously proposed a minimum access fee of 19.79 cents per gross tonne per kilometre. That drew sharp opposition from the industry as it was based on gross weight, which included the weight of the train rather than net weight, consequently increasing transport costs and costs across the supply chain.
The Network Statement, as published by the newly-formed Transnet Rail Infrastructure Manager (TRIM), now outlines a differentiated access tariff regime, with varying tariffs applied to commodities or corridors. The tariff will also comprise two parts – one fixed cost based on train kilometres, and another variable cost based on gross tonnes per kilometre.
For example, the fees on the Iron Ore Corridor will be 3.42 cents per gross tonne per kilometre, while ZAR650 ($34.66) will be levied per train per kilometre. The latter is a fixed cost, which will incentivise rail operators to make good use of their railing slots.
On the critical coal corridor, the fee is 5.84 cents per gross tonne per kilometre and ZAR250 ($13.34) per train per kilometre.
The fees apply to the current financial year ending March 2025. Updated fees for the next financial year will be published by the end of March 2025, the department said in a notice in the Government Gazette, also published on Friday.
Juwith Magabe, the acting general manager of commercial for TRIM, said the final Network Statement now also includes a capacity statement wherein some 2.4 mt of capacity has been identified as available for uptake by private operators on various railing routes.
There are no third party slots yet allocated for the lucrative North Corridor in terms of railing coal on the line, but Magabe said work is ongoing to try to unlock a slot headed to the Richards Bay Coal Terminal (RBCT).
Applications for private rail operation are now open and will close on 7 February.
“We envision that by 3 April, we should be having a third-party train operating company operating in our network,” Magabe said.
Transnet released its group interim results on New Year’s Eve, reporting a ZAR2.2bn ($120m) loss for the six months ended in September, having widened from a loss of ZAR1.6bn ($90m) in the comparative period.
Despite rail volumes increasing by 3%, Transnet said its financial performance was hampered by operational challenges in its port and pipeline operations.