Passenger Rail Agency of South Africa (PRASA) on its modernisation strategy for passenger rail

NCOP Public Services

18 June 2012
Chairperson: Mr M Sibande(ANC)
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Meeting Summary

PRASA Rail Operations continue to face major challenges which had a negative impact on the overall performance of the Group. Rail Operations experienced severe operational challenges during the period under review, characterised primarily by the decline in fleet availability. The main contributing factors were the dispute with Transnet about pricing of services and access to its network, unresolved contractual and pricing issues with companies involved in the refurbishment of coaches and supply of key components, as well as poor maintenance practices. The major problem remains the costs of running and maintaining South Africa’s rail system, which was no longer reliable and prone to daily breakdowns and failures. The costs have become significantly higher, yet the benefits to the economy and the country are quite limited.

Regular disruptions of the current old system with its outdated technology and backward operational practices have impacted negatively on the quality of rail services, reliability of operations and financial performance. These costs keep on increasing, with Metrorail spending not less than R500 million annually on attempts at service recovery related to breakdowns and vandalism, rather than delivery of quality services. This situation was no longer sustainable and the modernisation of passenger rail had therefore become critical and could no longer be postponed.

The acquisition of new, modern rolling stock and the signal technology upgrade were two key initiatives at the heart of the modernisation strategy of passenger railways in South Africa. A feasibility study had been conducted and 7 224 modern coaches were required over 20 years.  A preferred bidder for the building of new passenger coaches would be announced in November with new coaches starting to run in 2014. A condition had been set that 65% of components must be manufactured in South Africa. About 65 000 jobs were expected to be created and local manufacturing of coaches would boost the number of skilled artisans. A BEE programme for the building of new coaches would be announced shortly. Prasa would invest R7 billion into a modern signalling system and Siemens had been appointed to carry out some of this work.

Members were generally gracious with their remarks on the briefing but wished for more focus to be placed on the provinces and in particular rural areas which were suffering greatly from lack of access to transportation. Further meetings with relevant partners were recommended in light of the challenges in coordinating efforts to implement service reforms to the railway industry.

Meeting report

Passenger Rail Agency of South Africa (PRASA) strategies
Mr Tshepo Lucky Montana, PRASA Group CEO, noted the progress made over the past seven years beginning in 2004/05 with increased resources from the government. The foundation for a modern transport system had been laid but the system remained largely without integration.

There were three focuses within the presentation; the current state of the transport system, short-term (6-12 months), medium-term (12-24 months) and long-term (36+ months) strategies.

PRASA was launched formally in 2009 in order to transform and consolidate all passenger rail companies in the country into a single entity.

The primary objective of PRASA according to the Legal Succession Act was given as the provision of urban rail commuter services in the public interest as well as long haul passenger rail and bus services. Secondly PRASA was required to generate income from the exploitation of assets while giving due regard to the government’s socio-economic and transport objectives. PRASA was responsible for effectively developing and managing rail and rail related transport infrastructure while providing efficient rail and road based passenger transport within, and to and from urban and rural areas.

Some of the major challenges to South African railways were the ‘end of the design’ lifespan for the entire railway system including infrastructure, technology, operating systems and staffing numbers. The deterioration of current rail technology was noted as were poor levels of reliability and the high costs of maintaining infrastructure. These factors led to a failure to contribute to an efficient transport system and to support economic development. This also caused limited access to socio-economic opportunities for the rural and urban poor. The current system required a major transformation and modernisation and could not continue in its present form. Recent remarks by President Zuma were echoed – that the poor state of the commuter rail system resulted in the inability to support economic development.

The growth of the mini-bus taxi industry and transfer of freight from rail to road transport had further negatively affected the sustainability of the rail system. Railways in Europe and China were given as examples of well-functioning rail systems tailor-made to transport massive numbers of people and freight over specific transport corridors. Spain was noted as a country which had invested large amounts of capital into modernising and improving rail infrastructure and given as a possible model for South Africa. Mr Montana emphasised that 40 years of neglect had finally caught up with South African rail and there was a dire need for reform. No new coaches had been purchased for over 16 years except for the Gautrain and the majority of trains needed to be scrapped in haste as they presented a real security threat to passengers.

Current Metrorail trains failed to stand up to international standards apart from heating. Trains were said to be five times heavier than trains in other countries which reduced energy efficiency and effectiveness. During morning and evening rush hour, trains were overcrowded and made irregular stops which increased the potential for passenger death or a major rail accident.

PRASA Strategy 2012-15
From 2005/06 urgent measures were demanded by government to arrest the decline and prevent the eventual collapse of Metrorail. Since then, R5 billion had been spent to stabilise the service and it became the backbone of the transport sector prior to the 2010 World Cup. In Cape Town in particular, Metrorail was able to transport thousands of people to stadiums which was a solid example of the arrested decline in service provision. The next challenge was to move away from stabilisation to a situation where the system could deliver world class services to passengers. Although PRASA would continue to be subsidised by government, it needed to be transformed into a commercially viable organisation. In Berlin, 30% of station income was derived from non-riders, simply people coming into the station for services such as food, and this was something that needed to become a focus in South Africa as well.

Key interventions were given as strengthening the financial position of PRASA through restructuring and recapitalisation schemes. A 90-day Action Plan to address serious issues which included preventative maintenance and a compliance with statutory requirements while instilling a culture of good corporate practices, was also discussed.

Within operational effectiveness there was a dire need to recognise the underlying causes. There was a huge problem with safety five years ago but this situation was currently improving gradually. The level of crime was reduced on trains after the introduction of railway police in 2006 had helped to reduce crime by 40%.

The most important issue for riders was getting to work on time. In the early 80s and 90s there was over 90% predictable train service performance; however now the numbers were closer to 75%. Almost 50% of the train fleet had been non-operational but since then R8 billion was pumped into refurbishing trains and improvements. As part of the stabilisation programme, orders for refurbishment were placed for over 700 coaches per year up from only 200 a few years ago. This year 530 coaches would be refurbished at a cost of R2 billion. About 15% of train sets had been refurbished so far at a cost of roughly R7million per coach.
Mr Montana stressed that the procurement of new rolling stock needed to involve local companies. The Cabinet had instructed Metrorail to boost services in certain high-priority corridors. As well there was a need to improve the quality of maintenance. Propulsion systems were noted to be ineffective due to aging parts.

Passengers could now receive SMSs to alert them of any problems on their specific route and allow them to make alternate arrangements if need be.

Strategies around train reliability were also presented. Major train accidents like those in Soweto and Pretoria several years ago, could have been prevented had new monitoring systems been fitted on these trains. Responsibility for first line maintenance had been returned to train drivers. Likewise due to the centralisation of staging yards, the costs of picking up trains and then moving them out to local stations were massive to the system. In response instead of making empty trips and possibly breaking down, trains would now be staged in a decentralised manner to improve efficiency and decrease costs.

While train accidents were few, the number of passengers injured was very high. The main cause of accidents was not technical, such as signal failure, but rather human error or negligence which was noted as being surprising given the age of the train sets and systems. Derailments were down from a high of over 40 per year in 2003/04 to under 30 at present while collisions had remained stable at roughly 10 per year in 2011/12.

Random checks and supervision of staff had been increased to review drivers. Simulators from Germany had been introduced to enhance drivers’ situational awareness and judgement. Medical checks to monitor driver’s eyesight had also been brought in. Assurances were given that drivers were well trained in route knowledge and driving dynamics with a minimum of 18-months of job training.

PRASA had commenced a safety and cleaning campaign at stations. Seven contractors involved in cleaning at Park Station, the country’s largest, had been fired after it was found in an unsightly state. However, overall the maintenance of facilities had improved. Stations with gaps between trains and platforms were undergoing platform corrections to prevent passenger accidents. In all, 98 station improvement projects were under way including the introduction of new signage and general refurbishment. Cape Town station in particular was lauded for its enhancements over the past five years after an investment of R500 million.

Medium Term Strategies were modernising stations, new rolling stock, and up to date technology which must be implemented to create world class infrastructure on demonstration corridors which included Pretoria to Johannesburg and Cape Town to Khayelitsha. A modern speed gate system at a value of R1.9 billion was also currently being implemented at various stations across the country. This would lead to a standardised system of ticketing or a single transport card for trains and buses as a part of an ongoing modernisation drive.

An accelerated stock drive was in the offing since a majority of trains were circa 1956 and were now completely obsolete. PRASA was also investing R1.2 billion in a Bridge City Link in KwaZulu-Natal, which will give commuters greater access to Durban and about 80% of the project was already complete.

A R400 million project to double the length of track in Greenview and add three new stations would be completed next year. PRASA was also buying new trains and a feasibility study was conducted which had shown that 7 224 new coaches were needed over 20 years. This was subdivided into three components; 5 256 vehicles to satisfy existing rail passenger demand until 2020 with a further 456 coaches to facilitate expected growth figure to 2030. A further 1 512 vehicles would be acquired to satisfy long-term rolling stock needs on new railway lines as a part of possible future expansion plans.

On April 19 a proposal was made to various companies and a preferred bidder would be announced in November.  South Africa had to use this investment to revitalise local industry with at least 65% of components being produced in country. The first new train was expected to be tested in 2015 with the hope that 65 000 new jobs would be created out of this programme.

COSATU had criticised the slow start of this programme – but it was generally agreed that two years for this programme to be launched and brought to fruition was exceptional. While the programme was about delivering new trains so that passengers could travel comfortably, it would also boost skills in South Africa and encourage training of more engineers and artisans.

He strongly noted a huge stake for a broad based involvement from Black Economic Empowerment (BEE) with up to 40% of investment anticipated as coming out of the black business sector with participation in manufacturing of parts and provision of services. However, ultimately the entire country must benefit from this transformative process not only a few profiteers.

PRASA had commenced with the implementation of the National Signalling Upgrade Programme, which would see the delivery of a modern, state-of-the-art signalling system for South Africa in key priority rail corridors. This signal technology upgrade started with the appointment of Siemens SA in December 2010, on a contract valued at R1 billion for the re-signalling of key commuter rail corridors and the construction of a single Central Nerve Centre (CNC) for the Gauteng commuter rail network. Construction was already underway in the Lenz-Midway area as part of the first phase. The introduction of a new electronic interlocking signalling system was key to any modern railway operation. The total cost of the signalling for the entire commuter network would be R17 billion over the next 10 years. To this end, PRASA would later this year invite interested parties to bid for two additional packages for the introduction of the electronic interlocking signalling technology for its strategic commuter rail corridors in both Kwa-Zulu Natal and Western Cape Provinces.

There was no doubt that PRASA would extend rail lines and a number of new projects would be developed including a high speed rail link from Johannesburg to Durban to reduce travel time to between the cities to three hours. High speed rail was indicated as reaching speeds above 220km per hour and was something South Africa would require roughly 15 years in the future.  Other projects included the Johannesburg-Queenstown-Mthatha rail project at a cost of R450 million with eight new stations envisioned over the next three years.

Rail links to Cape Town and Shaka International Airports and the rehabilitation of existing rail lines to Hammanskraal were also under consideration. When airports such as Cape Town exceeded 7 million travelers per year with numbers predicted to grow to as many as 12 million travelers over the next several years, a rail solution was needed to facilitate further growth.

Discussion
Mr Z Mlenzana (COPE) said that in 2008 he was a member of the provincial legislature in Eastern Cape and wished to know if certain coaches in Eastern Cape were refurbished or new. He asked if trains were still running in Umtata and the condition of operations including rail turn-around time. No mention had been made of accommodation for rail workers? How did municipal transport companies interact with PRASA and what was the nature of these relationships? Finally, with the acquisition plan for new trains what were the timelines involved?

Mr H Groenewald (DA) said that rural areas were largely ignored and local people were suffering as they could not get their crops to market. He wished to know what the future plans were for addressing these issues in rural areas. Since 1994 there was a rail budget in place but what happened to this money and how had it been used? Last week there had been a large train accident where trucks collided with a train and speculation was aroused as to whether train drivers were in a position to help injured passengers with first aid. In relation to CEO Montana’s comments on BEE, he noted BEE must have access to projects but it must appoint people based on merit with the requisite skills.

Mr M Jacobs (ANC) asked for indicators of success within the new strategy plan. In his view little improvement to overcrowding had been made since the 1970s. He asked how the implementation would be monitored and brought online successfully. He noted the advances of bullet trains in Japan and China and said this was a path that South Africa needed to follow. He also said that he was concerned about maintaining infrastructure after the initial build. He felt that PRASA should be a self-sustaining organisation.

Chairperson M Sibande (ANC) said that a major concern was the theft of copper cables and wondered if there was a system in place to monitor theft and then the emergence of potential faults caused in the signalling system. He believed unannounced visits must be made to stations to monitor progress on these issues. He said in rural areas people were lifting up tracks and selling them which also had to be dealt with. Expansion of rail over the long term needed to involve more focus for townships and rural areas and PRASA was not visible in some of the provinces. No statistics were provided in terms of allocation of funds from Treasury and this was an obvious problem. Numbers were also absent for local infrastructure. He suggested that data should be made available to Members for clarification. Tenders were issued at the end of 2011 and in one case a lot of bridges had been built but which remained incomplete at a high cost. These projects needed to be accounted for. Roads could be completed in a period of months and alternative strategies to resolve transport issues should be looked into.

Mr Montana, CEO PRASA, asked that the Committee consider developing a programme to deal with institutional arrangements. He noted that this presentation dealt with passenger rail not issues of freight or accommodation. He found that it was necessary for the country to accept that railways had to be built on a new foundation in order to be successful. Acknowledging Mr Jacobs, he said that the system was the same as in the 1970s and that one of the main challenges was modernisation. China had at one time been in a situation similar to South Africa but it had been very bold in its implementation of new programmes which had led to so much of its successes.

The costs of running an antiquated system were very high and new solutions were needed. PRASA had asked how Eastern Cape can use rail to stimulate access and develop better policies to come up with a model to deal with both passengers and freight. He emphasised a need for sustainability and asked why 10 years ago, previous administrations had allowed unprofitable yet essential branch lines to close. This was seen as a mistake made by Transnet but as it was a sister company of PRASA, no blame would be laid but this must be rectified. Railway lines built specifically to support farmers were extremely important for regional development and the current blanket approach of closing branch lines was a mistake and had prevented small scale growers from accessing the market.

In answer to Mr Mlenzana, railway houses belonged to Transnet and PRASA had taken a decision that railway workers must be given the right to own their own homes as some houses were no longer necessary given staff restructuring. Unless linked to operations, homes would be sold off to workers.

Mr Montana pointed out that PRASA was said to work quite well with cities as there existed rail standing committees working with PRASA to develop policy and deliver services. Western Cape was in disagreement over future strategies and therefore an MOU was under consideration between Cape Town and PRASA.

A lack of modern coaches was noted and it was detailed that at peak times longer trains of 12 cars were used in other countries these were later uncoupled and shortened so that a more efficient service was effected between peak and off peak hours. With the current state of technology in South Africa, this was very difficult and time consuming and demonstrated the advantages of modern technology which increased efficiency and improved cost effectiveness.

The current plan was not a new turn-around strategy but the end of the first phase began in 2006. Metrorail was strictly a suburban system and the introduction of new services on smaller branch lines with the reintroduction of older lines closed in the 1980s was envisioned. The Umtata-Queenstown line in KZN was targeting rural areas. Rural strategies were further developed with two provinces including Limpopo. There was more demand in rural areas over urban areas for better rail services. An example was given of a bus company in Free State which sued PRASA over the reopening of a branch line which would have destroyed its business. This was a limitation to implementing reforms for rural areas. There had been no significant investment in rail until 2006/07 but since then, investment had grown by 14% per year.

In response to Mr Groenewald he noted that not all drivers were trained on first aid but was something that would be looked at. However in an accident, drivers usually were also injured or impacted upon psychologically so other methods of intervention would be considered. In terms of BEE, he agreed with Mr Groeneweld that appointments must be merit based.

In response to Mr Jacobs, the project was currently in the middle of implementation and PRASA was not embarking on a new plan. He noted the success of rail in 1970s as it had not experienced capacity constraints. The system had been used to bring cheap black labour from the townships into the cities. The huge improvements over the past few years were noted.

The railway police were part of SAPS not PRASA and over 3 000 railway police had been trained and introduced into the system which had led to a 40% decrease in crime numbers based on the number of incidents reported and arrests made. While police served as a deterrent, there was still a strong need to enhance this involvement. 24 police facilities had been built within train stations and railway police were said to be operating from within the railway environment as opposed to external involvement. COSATU had also acknowledged that a shift system was in place for railway workers and this was seen as a victory for PRASA.

As a matter of clarity, trains being purchased were commuter trains not long distance trains. These were not trains that would be high speed as commuter trains never run above 80,100 to 120 km per hour with stations placed every 2 km. 220km per hour plus was a speed attained only over long distances. High-speed trains would come in the second phase of product delivery.

On improving the quality of maintenance, the key thing was cleaning and preventative maintenance. Could the provinces afford to introduce systems like the Gautrain? Without government subsidies, the answer was clearly ‘no’ as was made clear in the case of Gauteng, which was now receiving funding from Treasury to pay for it due to the excessive cost of the project.

Copper cable theft was committed by very well organized criminal organisations and was not only a problem for PRASA but also for telecoms and other major companies. There was a movement by the Department of Justice to make cable theft a major crime with stricter penalties. Again in other countries, copper cables were no longer used and this was given as a possible future solution to this problem. One of the major issues around theft was that the South African railway system was an open system which meant it could be accessed by people. There was a need to increase fencing and possibly create a closed or at least less open system. The involvement of military in this matter was being considered to enhance security arrangements.

In response to the Chairperson asking for better statistics, the feasibility study shows sector by sector jobs creation to a total sum of 65 000 and the study could be provided to Members in the future. The first phase of PRASA’s strategic plan was about commuter rail not long distance trains.

Mr Saki Zamxaka, CEO: PRASA Technical, on issue of theft said PRASA faced major challenges in their operations. They had started in Cape Town by installing vandal proof technology and this intervention was working well. The level of emphasis in just securing the system was a huge cost to them. Theft and vandalism was a societal problem, not only a problem for PRASA. It was a problem that required organised coordination across various departments and levels of government. The mushrooming of settlements into rail areas was a major problem that impacted on operations. Railway tracks are sometimes used for dumping. They had groups working with the City of Cape Town to highlight this situation. If one looked at the level of incidents where people were struck by trains this was a massive issue and needed to be dealt with quickly

Mr
Mosenngwa Mofi, CEO: PRASA Rail, answered the questions on maintenance, saying that the divide was two-fold with an internal PRASA managed component and a manufacturing component looked after by the private sector. Major upgrades to staging facilities would be made with R1 billion allocated to the project. In terms of more in depth information, the feasibility study even went into local production of components and Members could access this data in future.

A representative from the Department of Transport said they were busy with the process of developing rail policy to take the transformation forward. When the Department issued a Green Paper on this process, engagement from a variety of actors was necessary to further growth in the rail industry. Monitoring and measuring the performance of PRASA were conducted via a shareholder’s compact.

Chairman Sibande suggested holding another meeting at a later date with PRASA and Transnet to discuss how to build the rural and urban economy. There was a clear need to move away from past strategies of focus on cities and the NCOP’s saw a need to spread resources across the country. At the next meeting a time programme for public participation was encouraged as a possible remedy to solving the theft of copper cables through teaching people that cable theft was wrong and had severely negative impacts on the economy. Encouraging whistleblowers on criminal activity was suggested. Lastly, there was a need to get away from outsourcing tenders and focus on skilled people already existing within the system.

The meeting was adjourned.


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