National Transport Master Plan 2050: Department of Transport; National Infrastructure Plan: Transnet: briefings

Meeting report

Department of Transport on the National Transport Master Plan for 2050. Presentation
Mr Lanfranc Situma, Project Manager: National Transport Master Plan (NATMAP), Department of Transport (DOT) said that the National Transport Master Plan (NATMAP) 2050's purpose was to develop a dynamic, long term, sustainable land use or multi-modal transportation systems framework for the development of network infrastructure facilities, interchange termini facilities and service delivery. NATMAP demanded strategies responsive to socio-economic growth and an integrated spatial development plan across sectors, together with an action agenda for the whole country until 2050. Transport was the heart beat of the economy. NATMAP was a 40 year land use and transport integrated plan. It was not a study but a bigger picture crystallising all facets of transportation for gradual and sustainable implementation.

By 2050, transport in South Africa would have met the needs of freight and passenger customers for accessible, affordable, safe, frequent, high quality, reliable, efficient and seamless transport operations and infrastructure. It would do so by continuously upgrading infrastructure and services ahead of demand, as well as in an innovative, flexible and economically and environmentally sustainable manner. Transport would support and enable Government strategies, particularly those for growth development, redistribution, employment creation and social integration, both in South Africa and in the Southern African Region. Transport would be efficient, cost effective, and a safe mode of transport using the proven state of the art rolling stock and equipment that would reduce travel times between trip origins and destinations , for example the reduction of the current journey of 12hrs to one of 3hrs 30minutes between Johannesburg and Durban by railway. This would be possible if the country gradually adopted the high speed trains such as already existed in China, France, Italy, Japan, Spain, and the United Kingdom.

On South African roads there were terrible pot holes because of the heavy trucks on the roads. There were also “redundant railway lines”. In terms of road infrastructure conditions the SANRAL network was generally good to fair, Provincial paved roads were generally fair to poor; there was a huge maintenance backlog in some areas, for example, coal haulage areas in Mpumalanga. In terms of traffic usage, there was growth of traffic that outstripped extension of the paved network. There was a significant amount of heavy traffic on roads. In terms of heavy vehicle overloading, there were road safety issues, exacerbated by poor road conditions and absence of clear road marking.

In terms of rail infrastructure conditions, heavy haul lines were well maintained and in good condition, the rest of the network was in fair condition; some lines however were not maintained. The rail network was generally underutilised. Rolling stock was old. In terms of the rail gauge, South Africa used a narrow gauge which had constraints. In terms of institutional setup, the Passenger Rail Agency of South Africa (PRASA) provided passenger services and Transnet provided infrastructure and freight services. Challenges in terms of operations were: control of rail transport (distorted charges); unsatisfied demand for rail taken up by road; technical regulation of freight transport; the decline in the standard of public transport; and customers’ dissatisfaction. Challenges in terms of infrastructure were: lack of expenditure on road maintenance; overloading on roads; condition of rail infrastructure (non-heavy- haul lines); ineffectual rail infrastructure management systems (isolated systems, old or incomplete data); and the need to cater for growth in demand.

It was required to begin with short-term fuel efficiency measures; emphasize modes of transport where mechanical energy was used most efficiently; advocate and vigorously promote non-motorised transport for short distances within urban areas; move to mass transit (public transport); shift long-distance freight off roads and on to rail; and review measures every five years, based on monitoring and evaluation of impact.
The country needed to urgently review the establishment of an effective rail industry. It needed to establish a vibrant rail manufacturing plant to position South Africa for the emerging high speed railway second renaissance across the world with a major focus on the African market and the developing countries.

The private car dominated passenger transport. The deteriorating quality of public transport was encouraging more car use and demand for more road space. There were modes operating outside their “optimum space” (e.g., buses operating where trains should be operating). unsustainable subsidy pressures, and issues related to state ownership and operations. Investment in the transport sector did not always observe the principle of “best value for money”. Passenger modes operated in silos. Regulations were not adequately enforced.

The proposed development of integrated, high quality public transport would link all cities and towns of national significance. It would consist of an integrated network of primary and secondary routes to provide mobility and accessibility. It would be accessible via high-quality modal transfer facilities. It would be a phased development over time.

South Africa’s transport systems were inefficient for both freight and passenger transport. Rail operator TFR had limited resources in terms of operational, technical and managerial skills. There was currently an uncompetitive environment in rail freight. Unsatisfied demand for rail transport was taken up by road freight hauliers. These were less efficient. The road freight operator permit system a required total overhaul to introduce standards, registration, and controls. Training and capacity building in all transport industries was in a crisis.

NATMAP’s goal was to maximize utilisation of existing infrastructure. The current network was accessible only to TFR and PRASA. The recommendation was that the network was made accessible to other operators to attract private initiative in service delivery and investment in rolling stock and infrastructure. A phased approach was recommended starting with ring-fencing of rail operations. Transnet branch line strategy was the first step in this direction. In terms of the vertical separation of infrastructure and operations, it was recommended that a rail infrastructure owning entity (RIA) be established.

There was a strategy to phase in standard gauge rail on 1435mm as an ultimate extension of the Gautrain rail project. Priority corridors for high speed rail were: the Moloto corridor; Durban to Johannesburg; Johannesburg to Polokwane; and Johannesburg to Cape Town. Policy was not about Transnet and PRASA but about the country in 2050. The Gautrain rail project on standard gauge would open on 08 June 2010. The Moloto rail corridor development initiative was approved by Cabinet on 05 March 2008.

Railways should change to the standard gauge to be compatible with other systems. It would eliminate internal and cross border breaks of gauge. The Gautrain was an example. It had generally better technology available. Standard gauge was dominated by sheer market economy. There was availability of rolling stock. It used mainly diesel locomotives and coaching stock. It had the ability to double stack containers. It would be beneficial when line capacity became a problem. It could offer track maintenance savings. Standard gauge had a number of substantial advantages over narrow gauge such as speed, stability, volumetric vehicle size, volume and quality of research and development, mass production of rolling stock and sheer economy of scale. The Africa Union had passed a resolution calling on their members to adopt standard gauge for the construction of new lines on the continent. It was a sound resolution and was in line with global reality. It also made eminent sense when viewed from the background of Africa’s diverse gauges, lack of rail networks and the general poor condition of the majority of existing lines. The Africa Union also indicated that interoperability of a future Pan-African network was one of the main drivers for this resolution.

The pace of railway development over the last four decades had been set in three distinct niches where rail managed to dominate other transportation modes. These niches were heavy haul, high speed and heavy intermodal. Heavy haul was the only one of these three niches that was being exploited by narrow gauge railways. The other two were beyond the proven capability of narrow gauge. A standard gauge high speed line between Johannesburg and Durban capable of a journey time of four hours, would cost about R80 billion.

The Johannesburg to Durban high speed passenger line would cost R80 000m for the fixed infrastructure. It would have a maximum speed of 300 km/h and a journey time of about four hours. Train sets would be an additional R150m per set with 600 seats. The cost per seat trip would be excessive due to the limited projected patronage. If 100% of the airline passengers projected for this route by 2020 were to switch from air to rail, the patronage would be just about sufficient to bring the cost per seat-trip to a level comparable to that of an airline ticket. If 50% of the route’s cost was carried by high speed freight such as containers and 50% of the projected airline passengers switched to rail the cost per seat-trip would also be comparable to that of an airline ticket.

There were a number of selected recommendations for rail. There was a need to introduce standard rail gauge in a phased approach by requiring all new rail developments to conform. There needed to be implementation of passenger rail initiatives, funding for the Moloto rail line, and feasibility studies for the Durban to Johannesburg, and the Pretoria to Polokwane rail lines. Access should be provided to private operators.

South Africa needed to declare commodities specific for either railway or road to save its secondary road network on condition that Transnet improved the utilisation of its existing spare capacity. It needed to review current axle loads limits in order to arrest the rapid deterioration of the secondary road network. The country needed to prioritise high speed rail development projects.  South Africa needed urgently to commence a pragmatic process of vertical separation of railway infrastructure facilities ownership as against operations by Transnet to increase private participation and competition. It also needed to establish a vibrant Rail Industry for manufacturing high speed rail components for the emerging high speed railway second renaissance with special focus on the developing countries market.

Transnet on the National Infrastructure Plan. Presentation
Mr Chris Wells, Acting Chief Executive Officer, Transnet, briefed the Committee on Transnet's infrastructure mandate. Transnet owned, managed and operated a national freight transport system consisting of port, rail and pipeline infrastructure. To optimise the benefits, this system needed to be developed and operated in a co-ordinated and integrated manner. The National Infrastructure Plan provided the basis for the holistic
development of the freight transport system.

Transnet had a five year corporate plan, which would cost R93.4 billion. It had a National Infrastructure Plan
with a 30 year capacity creation plan and wide stakeholder engagement and acceptance. It was aligned with a quantum leap increase in volumes and efficiency over 5 years. Major investments in the next five years included new locomotives and wagons; coal line expansion; ore line expansion; Durban entrance channel widening and deepening; Cape Town Container Terminal expansion; Durban Container Terminal berth deepening and reengineering; Maydon Wharf quay walls reconstruction; Richards Bay dry bulk terminal refurbishment; and Port of Ngqura terminal development.

Mr Krish Reddy, General Manager: Group Planning, Transnet, gave an overview of the infrastructure plan. The objectives were to provide Transnet and the relevant stakeholder community with a framework
within which long term planning for port, rail and pipelines could be executed. Transnet wanted to provide a basis for engagements with key Government and other stakeholders, inform Transnet’s capital investment programme and future funding requirements, and to offer a governance document for infrastructure planning and investment in Transnet.

The general planning principles included providing capacity ahead of demand; ensuring sustainability of development plans; integrating port, rail and pipeline planning; aligning with national road and electricity supply plans; providing capacity through operational efficiencies before infrastructure provision; benchmarking all developments internationally; and providing reliable, safe and cost-effective freight handling services of a world class standard.

Creating capacity ahead of demand was one of the primary objectives of Transnet. Freight Forecasting was an important planning tool to understand how demand for transportation capacity would change in future. The lead times to infrastructure provision were often five to seven years - the Freight Demand Model was needed to take a 30 year view to enable Transnet to build a capital requirement picture for the longer term. Transnet had embarked on a process to understand current and future demand in November 2005 - the resulting Freight Demand Model (FDM) was a significant improvement on previous forecasting methods. The FDM formed the basis for all long term planning in Transnet. The FDM was not Transnet-specific but considered all modes of transport.

Co-Chairperson Bhengu asked that Mr Reddy leave out development plans for ports and pipelines and present only on railways.

Mr Reddy briefed the Committee on the present state of the rail network. In the branch line strategy the railway network was classified into the core network (12 800km) and the branch lines (7 300 km). Transnet’s branch lines strategy provided for granting concessions to private operators. Approval had been granted by the Minister of Public Enterprises in terms of the Public Finance Management Act, 1999. Transnet was currently conducting feasibility studies to determine the viability of each concession opportunity for private operators, and was in discussion with the Department to finalise a sustainability plan for the branch lines. 

Rail gauge was the distance between the inner sides of the two parallel rails. The Standard Gauge was set at 1435mm, the Cape Gauge was set at 1065/7mm and the Narrow Gauge was typically less than 700mm.

In terms of the viability for conversion from Cape Gauge to Standard Gauge, gauge conversion affected every element of a railway system, that is, infrastructure, rolling stock, ancillary equipment, sidings, ports, superstructures, and other aspects. Conversion from Cape Gauge to Standard Gauge had the greatest benefits for passenger rail as it supported higher speed trains as distinct from rail freight where high speed was not required. The entire Southern African region was connected by Cape Gauge. Opportunities for the introduction of standard gauge in the South African rail network existed where new isolated rail corridors were being considered, for example, a proposed high speed rail link between Durban and Johannesburg.

Intercity passenger trains needed to run at high speed (300 km/h +) to compete with airways. For freight, throughput time was more important than speed. High speed would not necessarily improve throughput time but would increase the cost of operations. Freight speed on Cape Gauge was similar to international best practice on standard gauge. Speed for freight trains was typically not limited by gauge constraints but was a derivative of gradients, curvature, train authorisation systems and crossings. Predictability and consistency was essential for competitive rail freight services. Time-sensitive goods could successfully be transported by high speed passenger trains but formed a small component of national freight demand.

Transnet did not receive subsidies from Government and had therefore to secure investment grade ratings in order to borrow funds. Transnet’s National Infrastructure Plan continued to undergo refinement as economic conditions changed. Key strategic decisions were required to ensure that freight system capacity was provided at the right place and at the right time. Major infrastructure expansions involved long lead times. As a state-owned enterprise, Transnet was well positioned to take this long-term perspective on the requirements of the freight system, plan accordingly, and to develop the projects and operations in partnership with the private sector. Policy and economic regulation had to provide for a fair return on invested capital and predictability of cash flows. Stakeholder engagements would continue as a key feature of Transnet’s planning process.

Discussion
Co-Chairperson Mentor said that Members did not understand all the terminology of transport. Mr Situma had mentioned that if South Africa was not careful it could see the same kind of failure as Eskom had experienced. She did not feel that Eskom had failed and so wanted some clarity.

Mr Situma replied that he did not mean that Eskom had failed but that its ability to deal with the demand for energy in the country had failed and the same thing could happen to Transnet and the rail network.

Co-Chairperson Bhengu said she would summarise what Mr Situma had said. The Department was presenting a plan to the Committees that needed a political decision, and if Parliament delayed in making a decision then the rail network would land in the same trouble as Eskom, as it was because Parliament had delayed making a decision on Eskom that had led to its failure.

Mr Situma said that Transnet was a closed monopoly. It operated on the rail infrastructure as well as managed it and there was no competition for it. Transnet needed to decide if it was going to be an operator or an infrastructure manager, since at this stage trucks were damaging roads in South Africa because the railways were not being utilised to transport goods.

Mr N Gcwabaza (ANC) asked the Department if the 2050 NETMAP plan included developing human and material resources capacity to manufacture domestically in order to reduce importing skills and materials. Maybe the Department needed to collaborate with the higher education institutes for reskilling current workers. He wanted to know if this was in the plan.

Co-Chairperson Bhengu said that there were passenger trains as well as freight trains that were using the Cape gauge and narrow gauge lines. The Department's presentation indicated that South Africa needed to move to the standard gauge, yet Transnet was saying that this was not needed to transport goods; however, Transnet had said nothing about passengers. There were two needs, yet one railway line. She wanted to know how to reduce the time of travelling by rail for people in South Africa.

Mr A Mokoena (ANC) said there was a very crucial and logistical aspect regarding opting for the standard gauge instead of the Cape gauge, and that was the cost implication. The presentation was missing the figures for the length of the rail network in South Africa, so he wanted to know the length. He said that Members needed to know the cost of updating the rail network and how long it would take, so that Government could budget for it properly. Government had issued some concessions for toll gates and predictions had been made. If the track gauges were updated and freight was moved from the roads to the railways, would this not impact the concessions?

Mr S Farrow (DA) said that he picked up in both presentations that there seemed to be a conflict in relation to planning between Transnet and the Department. There did not seem to be a clear synergy between the two. Government needed to decide if freight was going to become part of the transport entity. If this was the case Government had to look at certain things. More people were using roads because they did not feel that rail was a reliable alternative. Until that perception was changed, people would carry on using heavy trucks to transport goods. Transnet and the Department had to consider becoming one entity funded by the state so as to ensure that the rail network was used. If this could happen then surely the plans would start coming together more easily.

Ms G Borman (ANC) said that other Members had anticipated the majority of her questions. Did the Department think that Transnet needed to be an operational entity as opposed to developing infrastructure? From the Department's point of view, there was a need for this new standard gauge and it would be great to have high speed trains but the cost was high, probably about R8 billion. On the other hand Transnet was saying that it agreed with the Department that the new infrastructure could move to the new gauge. She said she was a little confused. She asked if, when Transnet talked about a 30 year plan and the Department was talking about a 40 year plan, the two entities were thinking of a similar time frame.

Mr M de Freitas (DA) said that in his opinion freight rail should to be merged with the rest of rail. The Department and Transnet were correct but they were not talking to each other. It was true that you did not need speed for freight but on the same rail tracks speed was required for commuters. This was not going to get resolved until the Department and Transnet were under one entity in one place, and that was the root of the problem. Transnet was saying in its presentation that if it was viable to expand into the west of Gauteng it would do so. West Gauteng had the fastest growing population in the entire province. It was clear that Transnet and the Department were not talking to each other because there was a need for passenger rail. There needed to be more integration and more detail and there was a need to restructure this component of public enterprise. Transnet had some great plans but had presented no real time frames. The presentation had indicated that it would cost R33 million per kilometre to change the gauges and this needed to be examined in terms of concessions.

Mr C Gololo (ANC) said that he acknowledged that the upgrade from the narrow gauge to the standard gauge was very expensive. He asked about a project mentioned in 2007 for a magnetic train in Gauteng, it was supposed to be a high speed train that would help with transport in Gauteng and alleviate traffic congestion. He wanted to know what had happened to the project and why it was cancelled. He also asked what would happen to the tracks that would be removed, and if they would be recycled or used for other tracks.

Mr G Koornhof (ANC) said that when looking at the Department's presentation there was no mention of the cost of the 2050 plan, whereas Transnet had said that its plan would cost R93 billion. He also asked if National Planning featured in the two plans and if the two plans had been co-ordinated at all or if there were plans to co-ordinate them. The two plans did not seem to talk to each other; there was a lot of finger pointing from both parties but no synergy between the two.

Co Chairperson Bhengu said that when both entities were making there presentations they had mentioned that they had spoken to each other but that there was no indication of any agreements on issues by both Transnet and the Department.

Mr S van Dyk (DA) said that Transnet needed to be placed under the Department of Transport and that Parliament needed to make a decision as soon as possible on this. The Department asked what trucks were doing on the roads, but the obvious reason for this was that rail had failed in transporting certain goods; the blame could not be put on the owners of the trucks. The Department needed to make sure that roads were maintained properly. Mr Van Dyk wanted to challenge Transnet managers to leave the office and spend a week travelling on the trains, because they would see that along the route there were many small stations that had not received any maintenance and so had become unusable. He asked that Transnet not tell them what problems they had but rather what solutions they had.

Ms P Ngwenya-Mabila (ANC) said that there was an indication that Cabinet had taken a resolution in 2008 on the Maloto corridor. Her worry was about the implementation and the fact that it had taken so long. It was true that both parties were saying that they were engaging with each other, yet each one had its own plan. Her worry was about how the Department's plan was going to be implemented because Transnet was planning another thing. The Department had said that rail was under utilised; she wanted to know what Transnet had to say about that statement.

Mr M Sonto (ANC) said that both parties needed to return with a well researched and co-ordinated plan, because the two presentations were not co-ordinated.

Co-Chairperson Mentor said that Transnet had mentioned a need for clarity on policy. The Department set policy for transport and Transnet needed to align itself with those policies. The problem here also lay with Cabinet; members of the executive also needed to be held responsible. Ministers from both the Department of Transport and the Department of Public Enterprises needed to be called together, because this situation could not continue. Planning for the future needed to happen now, but there seemed to be some resistance from Transnet. Transnet also said that it had not received state support since 2005 and it was raising its own funds. This was the crux of the problem. While Transnet was bringing in its own funds, it would not see the need to synergise with the Department because Transnet was a separate entity.

Co-Chairperson Bhengu said that she did not feel that Transnet was taking the Committee seriously. Before the meeting the Committee submitted five questions which Members wanted the Department and Transnet to answer, yet Transnet had told Members what it thought Members wanted to hear and not what they actually wanted to know. Transnet was resisting change, hiding behind the need for freight transport, and forgetting about passengers. Upgrading the rail network would be costly but it was also costly to keeping fixing roads damaged by trucks. She wanted to know what plan Transnet had to get dangerous goods off the roads and transport them by rail. There seemed to be a perception that only people of a certain class used rail, as there were no trains that went to the airports around the country, as if to say that people who used rail were not able to afford to fly. Transnet only seemed to think of itself when it built infrastructure. Both the Department and Transnet needed to go back and sit down and co-ordinate their plans and then return to the Committees and present an integrated plan. It also did not help for Mr Situma to say that there was only talk but no action.

Mr Situma replied that the Department was responsible for policies on transport. The Minister had decided on a policy of moving forward. Mr Situma was happy that the Co-Chairpersons had mentioned that agencies had to follow policies set by the Department. Transnet was an agency and had to follow the policies set by the Department. There was a wrong theory of planning reflected by trains not going to airports. The South African rail network was built during the colonial scramble for Africa and so it was unable to keep up with new technology. When talking about infrastructure it was necessary to consider a network that could take any train at any speed at any time. With the standard gauge slow and fast trains would be able to move on the same track as they did in China. There would need to be logistics in the scheduling of trains. Job creation was the pillar of the new Government policies. The Department was talking to the Department of Trade and Industry and the Department of Public Enterprise and other Departments about job creation. In terms of the Planning Commission, the Minister of Transport was the chairperson of the infrastructure cluster and as a Department the National Transport Plan would be submitted to the National Planning Commission.

Mr Wells replied that he did not mind if there was criticism of Transnet. Transnet wanted to carry out its mandate as efficiently as possible. Transnet had also never tried to undermine policies of the Department and it followed all the policies. In 2004 Cabinet had taken the decision to split freight rail and passenger rail. PRASA had control over passenger rail and it also owned some of the railway network. Transnet owned most of the rail network but not all of it. Transnet had entered into agreements with PRASA regarding access to each other’s railways and they had regular meetings together. There was a comment that Transnet did not take road into consideration, when in fact it did, which was evident from the presentation. Transnet had initiated a National Structure Plan which it had tabled with the Department. Transnet also saw itself working side by side with the Department. In terms of the gauge Transnet was not opposing the standard gauge. It was a participant in the new fast track that was being laid between Johannesburg and Durban. Transnet's point was that the upgrade of tracks was not going to happen over night, but it was excited to get involved. It was optimising its present tracks which used the Cape gauge, whilst every new development was being viewed appropriately.

Co-Chairperson Bhengu said that communication was a tricky thing. There was a receiver and a sender; if the receiver interpreted your message differently then there was a problem with the way in which you were communicating. All members had interpreted what Transnet was saying in the same way, so it did not help that Transnet alleged that Members did not understand. Both Committees detected that there was a conflict between Transnet and the Department, and that there was no talk of integration.

Co-Chairperson Mentor said that she did not think it was a problem of communication; the problem was between Transnet and the Department. There was a difference that needed to be resolved but it could not be done at the meeting. The differences were glaring and needed to be examined.

Mr Wells replied that he agreed with comments made by both Chairpersons. Transnet and the Department should have combined their presentations. He suggested that next time they came back to the Committee they have one combined presentation. He said Transnet had engaged in all the workshops offered by the Department but its main responsibility was freight, while PRASA was responsible for passengers. As to the speed of trains, Transnet did not disagree with the Department, but freight required reliability and efficiency rather than speed. When the rail network was updated to standard gauge Transnet would make sure that both freight and passenger trains utilised the tracks.

Co-Chairperson Bhengu replied that no one had said that the track updates would happen over night, and that the Department had given a 40 year plan. However, there was a need for change. The Committees, Transnet and the Department needed to improve on the way they interacted with each other. She wanted to know why speed was not an issue for freight. She asked why dangerous goods such as fuel and timber were being transported by road. 

Chairperson Mentor said that she felt that the meeting had achieved its objectives. She reiterated that Transnet and the Department needed to come together to co-ordinate their presentations and their plans. At the next meeting Members would discuss ports and pipelines.

The meeting was adjourned.