Rail investment programme & train revitalisation: Passenger Rail Authority of SA briefing

NCOP Public Services

30 July 2013
Chairperson: Ms M Themba (ANC Mpumalanga)
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Meeting Summary

The Passenger Rail Agency of South Africa (PRASA) gave a full and detailed presentation on its rail investment programme and strategies for train and service revitalisation. The mandate of PRASA was to work in the three areas of rail, investment and bus transport, and it currently employed over 16 000 people. PRASA generated its income from the properties that it owned. It was known that although rail had not received sufficient focus, attention or funding for many years, railways were vital not only to ensure that the population had access to areas for employment and work, but also because the railways themselves provided huge opportunities for employment, promoting skills, and providing links between urban and rural area. The lack of investment over the last 35 years meant that the current systems were in dire need of refurbishment and replacement, and this was why the investment programme was so important. It was stressed that, with the proper amount of investment and controls, rail was the safest and most environmentally-friendly method of transport, and was also more efficient in terms of numbers that could be transported.

PRASA pointed out that the increasing urbanisation was increasing pressure on metrorail, and that the pressure would continue to build in the immediate future. The passenger Metrorail service had now stabilised, and the time was right to expand it to greater commercial viability. The Capital Investment Plan accepted that, given the poor state of the current rolling stock, much had to be spent on refurbishing and repairing (in the shorter term) the outdated fleet, but aiming to replace it entirely in time. Along with the new fleet, a modern signaling system was needed to ensure that the trains functioned properly, thereby improving safety and commuter confidence. The investment would be done over a 20-year period of two ten-year phases, with the first contract for R51 billion having been negotiated, but yet to be approved by the Board. This investment should be a catalyst for substantial direct and indirect job creation, because a new production plant was planned for Gauteng, which should, over time, provide PRASA with the capacity and skills to build its own stock, and even products for export. There was a contingency to purchase new locomotives from outside, should they be needed before the plant was fully operative.  The signaling plans were also outlined, in Gauteng, Western Cape and thereafter to the rest of the country. Some of the key expansion products, expanding lines, numbers of stations and services, were explained. New depots would be needed for the new stock. Metrorail would also be expanded to areas that had formerly lacked rail travel, most importantly the Moloto Corridor, where numerous road accidents were claiming lives, although in some areas PRASA experienced resistance from those currently operating long-distance buses. Lack of safety and compliance was noted as a key problem with many of the existing road services.

Several Members commented that they were disappointed that there was so much focus on the larger, more wealthier provinces, with far too little focus placed on extending services to those in the poorer and rural provinces, who were paying taxes yet not receiving comparable services. They felt that rural communities were not seen as a prime focal point. Concern was also raised on the location of the production plant in Gauteng, not a smaller town or rural area, and Members asked why more attempts to decentralise were not being made. They asked why no new purchases had been made since 1994, questioned the spending to date that had ignored rural areas, asked why lines had been closed, and believed that a master plan was needed for the whole country. Members commented that several of these issues had been debated for years, without anything positive being done, and this Parliament had only months left and no time to ensure that the projects were implemented. They asked exactly how PRASA would be contributing to moving people from road to rail. They believed that cable theft had to be addressed, and asked if research had been done into alternative fuel sources, asked about recruitment to the new plants and what PRASA was doing to promote rail engineering as a career. They asked for further elaboration on the tenders and who had benefited from PRASA’s efforts in the past. PRASA responded that it fully agreed with the need to prioritise rural areas, but pointed out that unless policy and funding were put in place by government, as well as the necessary legislative changes, there was little that the officials could do, other than push for changes. It asked for active Parliamentary support and active promotion of the policy changes needed, as well as sufficient funding. It was agreed that further discussions were needed to which all stakeholders, should be invited, and that PRASA increase its communication with the Committee.

Meeting report

It was noted that Ms M Themba (ANC Mpumalanga) would be acting as Chair, given the fact that the Chairperson Mr M Sibande (ANC, Mpumalanga) was out of the country.

Rail Investment Programme: Passenger Rail Agency of South Africa
Mr Lucky Montana, Group Chief Executive Officer, Passenger Rail Agency of South Africa, set out the mandate for the Agency (PRASA), which was to provide urban rail-commuter services, long-haul passenger services, as well as long-haul bus services, in the public interest. As a secondary objective PRASA was to generate income through its assets such as the development of land in its ownership. PRASA specialised in rail, bus, and investment. Some of the key assets of PRASA included the 22 300 kilometer rail network, over 1 000 coaches and 124 locomotives, and 458 buses.

Mr Montana then noted that the metrorail did 625 million trips per year and the bus service provided services to 3.1 million passengers, while the Shosholoza Meyl (SMYEL) long distance trains provided services to 3 million passengers per year. It was also noted that PRASA directly owned 370 stations, but operated over 500 and employed over 16 000 people. These assets had a value of R 23 billion and PRASA generates income from the properties they own.

Mr Montana continued by reflecting on the role railways could play in bettering South Africa, and noted that PRASA was a huge asset that should be used to benefit the country. PRASA was in the process of moving from a plan of stabilisation to a plan of improvement for rail travel. These improvements would lead to economic development because it would ease the movement of people and goods around the country, providing much needed links between rural and urban areas. Mr Montana noted that China had greatly improved its rail system and it had led to decentralised production and a more connected urban and rural population. Such improvements would allow people to safely travel from rural areas into urban areas for work, and safety would be improved through proper investment and maintenance. With upcoming plans for expansion and new manufacturing plants being established there would be an increase in direct and indirect jobs created, which would boost the South African economy. Because of the technical nature of working in rail, developments would lead to an increase in the employment of skilled labourers and more people would be inclined to obtain these skills. Mr Montana also stated that railway systems emitted less greenhouse gases per kilometer then air and road travel.

He outlined the challenges that South Africa's railways faced. The largest issue was that no major investments were made in railways for 35 years, so the trains were outdated and railways could not support some important functions. Some trains were over 40 years old and the last new train sets were purchased in the mid 1980s. This meant that the cost of upgrading current trains and general maintenance was very high. The cost of running the outdated trains was R1 billion. The current rail infrastructure and technology had reached the end of its life span and great changes must be brought about to stay relevant.

He tabled a chart demonstrating how outdated the metrorail trains were compared to the trains of other modern trains (such as those found in Europe) in terms of modern standards and features, only being comparable in heating. These issues could not be resolved by retaining the old fleet.

PRASA offered its condolences to the victims of the train derailment in Spain the week before.

PRASA Strategy 2012-2015 : Modernising passenger rail for quality public transport in South Africa
Mr Montana indicated that one of the drivers of the need to modernize metrorail was urbanisation. A United Nations Report stated that one-half of the world's population was living in urban areas, and this figure would expand to 60% in 2030, when over two billion more people would be living in cities. These numbers would put a great pressure on urban infrastructure and it would be essential to have a good transport system. The sustainability of cities would be compromised if they ignored these changes and did not adjust to current systems to meet new needs.

The effects of urbanisation would be felt the most strongly in Gauteng and Western Cape which was where the population was growing fastest. It was indicated that the people moving from rural to more urban areas, for work purposes, would put a great strain on the local and long distance train systems, because of both the daily commute as well as the increased amount of people traveling back to their home provinces.

The three critical pillars of the PRASA strategy were:
- Improve quality and reliability of Rail Services.
- Invest in new capacity in new, modern trains, signaling and telecommunications, train control and operating systems, speed gates, and expanding the network to address imbalances inherited from the past.
- Unlocking the value of assets to ensure that PRASA would be financially sustainable.

Capital Investment Programme
Mr Montana reiterated that PRASA was spending a great deal in revitalising ageing trains, but as the production of new trains commenced the spending would shift. He said that he would briefly summarise the investment plan, which would be presented in more detail at another time.

The largest expense of the investment figures was to be spent on rolling out new trains to replace the outdated trains. Mr Montana stated that having new and safe trains would create confidence and loyalty amongst commuters. A new modern signaling system would be necessary, to coincide with the new rolling stock. Between 2010-2015 PRASA intended to spend R 32 billion on South African railways, as part of its strategy to move away from stabilisation to rejuvenation. Spending on station upgrades was also one of the more important aspects of its plan, along with the new stock programme.

Key Investment Plans
Mr Montana reiterated that the buying of new trains was the most important part of PRASA’s investment plan, both to enhance safety and efficiency, but also as a means to provide jobs and economic livelihoods. PRASA had committed R 123.5 billion to the Rolling Stock Fleet Renewal Plan for new trains and systems. The project had a lifespan of 20 years, divided into two ten-year contracts. The intention was to build 7 224 coaches over 20 years, half of which would be built under the first ten year contract. The first ten year contract of R51 billion was to be awarded to the Gibela Consortium, key negotiations were completed, and the Board had to formally approve and announce this.

The production plant would be built in Gauteng, where there was a great deal of engineering capacity. This plant would be staffed by South Africans, as it was in the interests of PRASA to help stimulate the economy and the progression of South African made products. The production plant would employ over 8 800 people and the supply side would create a further 22 000 jobs, and, in total, the numbers of direct and indirect jobs should total around 65 000.  The production plant could also be used in the future to build trains for export as well, further developing the economy of South Africa.

Slide 26 demonstrated the intended rollout programme of the new fleet and the fact that by 2034 all the old fleet would have been replaced (see attached presentation for details). The projected timeframe for the opening of the production plant was June 2016. Mr Montana then presented a picture of the new train, noting its modern look in comparison to the dilapidated state of the current fleet.

Until the new production plant was completed, in 2016, there would still be a need for some new trains because of forced retirement of the current fleet. These would be sourced internationally, and it was calculated that in order to avoid a system collapse, PRASA might need 20 trains; although it had not taken action on these yet, this was a precautionary strategy.

PRASA also planned to spend R 2.3 billion buying new trains for intercity travel, as its current model was proving unsuccessful and would need to be revamped in order to survive. One of the major current deterrents for long distance intercity train travel was the time, since train travel from Johannesburg to Durban was eleven hours, compared to six by road. Modern trains would take only seven hours and be far more competitive. The increased road traffic for inter-city traffic was due to the perception that trains were too unreliable and slow, which emphasised the need for re-vamping this form of transport.

Economic development was another factor that Mr Montana outlined. R797 million was to be spent on broad based black economic empowerment (BBBEE) and skills development, in the form of apprenticeships, on-the-job training, bursaries, training at Original Equipment Manufacturer (OEM) plants and learnerships. He reiterated that this project would create numerous jobs and that PRASA had a commitment to creating the means of production in South Africa in order to create a lasting industry. It would spark many socio-economic developments, including more localised objectives. More train lines to rural areas would allow the population to attain better employment and new opportunities.

Signaling upgrades
Mr Montana then moved on to describe the other major investment, which was the installation of a new signaling programme. This programme was deemed essential to the functioning of the new trains and a necessary upgrade from the current system. Siemens was awarded the contract for the headquarters, which would act as the nerve centre, located in Gauteng. After Gauteng, the project would focus on the Western Cape. It was estimated that it would take five years to rebuild the entire signaling system. The first element would have to be completed by 2015 in order to implement new trains. The contract for the new signaling programme in Durban was awarded to Bombardier. The new signaling systems would reduce the number of signaling failures, leading to fewer train delays and cancellations.

Rolling stock programme
The Accelerated Rolling Stock programme was aimed at accelerating the rate of coach overhauls and upgrading in the short term.  This was designed to improve the availability and reliability of the current stock while new stock was being built. This programme would run parallel with the introduction of new stock over 20 years, with the intention of retiring the last of the old stock in 2033.

Other projects
Mr Montana then spoke on some of the other projects PRASA had been working on. This included the Bridge City Development, which was a project designed to connect Bridge City to the Durban metrorail system and encourage travel. This project included the construction of a railway station as well as 3.2 km of rail line servicing the Bridge City shopping centre and surrounding areas. This project was very close to completion and would be opened by the Minister in October.

Another project was the Greenview-Pienaarsport rail extension, to provide a new station in Greenview, upgraded stations at Plienaarsport and Mamelodi, and the doubling of the line from Eerste Fabriek to Greenview. These changes at Greenview would shorten wait times from 27 minutes to six minutes, which would lead to increased patronage.

Along with those projects ran the modernisation of 134 stations, prioritised in line with passenger demand. Modernisation would improve revenue collection, station operations, and provide passengers with enhanced station surroundings such as shops and other commuter requirements. The changes would focus upon three locations:
-Umlazi-Durban-Kwa Mashu- Bridge City
-Khayelitsha/Kapteinsklip-Cape Town

The projected cost of modernisation was R 5.4 billion. In these three regions there would also be an increased investment in management systems such as technology installation to manage fare invasion, new ticketing systems, managing access, retrofit with CCTV, railcom, help points and display boards. These advancements would reduce fatalities caused by trespassing, increase revenues, reduce vandalism and sabotage, and create safe and secure assets. The project was 86.47% complete.

Depot programme
Mr Montana then continued by presenting the plan for a new depot programme. This programme would be necessary due to the quantity of new technology and trains being introduced in the future. These depots would cater to increased fleet maintenance required due to full fleet deployment. The locations where these depots would be built or refurbished would be:
-Gauteng South – Braamfontein Depot
-Gauteng North – Wolmerton Depot
-Western Cape – Salt River Depot
-eThekwini – Durban Staging Yard
-eThekwini – Springfield Depot

Construction was set to begin in April 2014, and the expected capital cost was R 5 billion.

Planned Rail Extensions
Mr Montana outlined the plan for railway extensions throughout the country, on the basis that now that Metrorail had been stabilised, the network must be opened up.

On the Moloto rail corridor, it was noted that the lack of rail transport in the past between Mpumalanga and Gauteng had caused deterioration in the roads, which had led to more accidents and loss of life. Many buses ran between Mpumalanga and Gauteng, along the Moloto road, which were not government approved, and were considered unsafe. A rail line it would allow for greater travel between places and spur development in the area.

The Bara Link would begin at Nasrec Station and continue through Eldorado Park and Lenasia to link with Vereeniging-New Canada rail line in the vicinity of Lenz Station. This extension would enable a full through-service for residents of the south-west section and would transport approximately 40 000 commuters daily. The Bara Link would have a cost of R 2 billion.

An extension was also planned for Eastern Cape. The link between Motherwell and Nelson Mandela Bay would be the first step in the planned full Motherwell Loop. This link responded to the increase in population in the area and would carry 1 500 to 20 000 passengers daily, in the short term, with an expected increase to 35 000 by 2020.

A Cape Town International Airport Rail Link was also planned. Because Cape Town was an international destination, people should be able to travel to the city by train, with trains departing every 15 minutes. This link would also provide transportation to the local people who worked in the area. The current myCiti bus was a temporary solution, but the rail link would soon recover the costs.

The King Shaka and Northern Links rail corridor was also noted, where a feasibility study was in its early stages, to determine the viability of the proposed rail connection from the new airport and south to Durban, as well as continuing north to Ballito. This connection could facilitate connectivity and integration at a regional level.

The Daveyton-Etwatwa extension would extend the existing line from Daveyton to the Chris Hani, Etwatwa and Knoppiesfontein areas. This would involve roughly 30 km of rail divided into two stages and ten to thirteen new stations, also divided into two stages. This project would have high community support, as the current service was done by minibus taxis.

Mr Montana also addressed the issue of a possible service between Kimberley, Northern Cape, and Bloemfontein Free State, which would increase movement from Free State to Johannesburg, but noted that in the past, bus companies had taken PRASA to court, fearing that they would be put out of business.

PRASA then presented some photos to demonstrate the modernisation of stations and improvement of safety, including gaps, special needs access, and the need for change.

Mr Montana concluded by outlining some PRASA highlights in the 2012/2013 financial year. The procurement process was concluded for the Rolling Stock Fleet Renewal Programme. PRASA had awarded over 500 bursaries as part of its skills development contribution, as well as learnerships. Mr Montana extended an invitation to the Committee to spend time with PRASA to see its progress.

Ms L Mabija (ANC Limpopo) thanked PRASA for its confident presentation. However, she was not happy t see so little said about the rural provinces. PRASA focused solely on the bigger provinces, such as Gauteng and Western Cape, which were already managing quite well. She thought that the poorer provinces were not treated fairly, as their residents paid taxes but the services were implemented elsewhere. She questioned how PRASA could claim to offer services overall when it was favouring only certain provinces.

Ms Mabija asked for clarification why the last train was purchased in the 1980s, questioning why nothing had been done since 1994, when this should have been prioritised. Billions had been spent, but she questioned why this money was not spent on trains and station improvements, especially in rural areas.

Mr M Jacobs (ANC, Free State) believed that improving South Africa's rail systems was a positive development. However, he reiterated Ms Mabija's concern about the focus of the projects on the larger provinces and asked how the poorer provinces were benefiting; they seemed to be treated only as an after-thought. He noted that the plant being built in Gauteng would cause people to flood to industrial areas, when production should be decentralised. Mr Jacobs expressed frustration by stating that there should be a master plan for the entire country, and that PRASA was focusing on developing the developed. It was also noted that PRASA's presentation noted billions of rands being spent and invested, but Mr Jacobs suspected that not much was actually going into the hands of South Africans, which was disappointing.

Mr Z Mlenzana (COPE Eastern Cape) said that he had, on receiving the documentation, immediately scanned through to see whether the issues that had been under discussion for years were specifically addressed, and pointed out that the Fourth Parliament effectively only had three months to deal with all those issues. He too was disappointed to note that the primary focus of the presentation was on three provinces. When PRASA spoke of work in KwaZulu-Natal, it was in fact saying that the work would be created in the urban areas and not the western portion. He noted that PRASA had cut its services to some lines in rural areas, and wanted to know exactly how it would be contributing to moving people from road to rail.

Mr O De Beer (COPE Western Cape) said that he thought that changes would have to be made to the presentation if the strategy was to be deemed acceptable and workable by the Board on the following day. He asked if PRASA had done any research into good practices. He was concerned, for instance, that unless the cable theft causing trains to be delayed and cancelled was addressed, the Board would not accept the presentation. He also asked if any research had been done into alternative fuel sources. He questioned the recruitment process for production plants, saying many new skills would have to be learned. Finally, he commented that the focus on rail development in the Western Cape was solely on metrorail.

The Chairperson noted that many Members of the Committee represented rural areas, and they had been under the impression that more emphasis would be placed on the work in these areas, and reiterated that this was an issue that had been under discussion since 2009. She agreed that she too was concerned that so little time was left for this Parliament to deal with the matter, and feared that the issues would drag on. She asked for elaboration on the PRASA contracts entered into so far, asking if rural companies had been informed of tenders so that they could participate, and thought smaller provinces and women should also be taken into consideration actively, and not just in passing. She asked how best to engage with students to urge them to consider this route in an engineering career. She asked how people from rural areas will be empowered to work at the production plants

Mr Montana was appreciative of the frank approach of the Committee, which was why he believed these engagements were so valuable. He clarified that some of the issues raised were not specific to PRASA’s mandate, but fell within overall government outcomes. He assured the Committee that PRASA took provincial issues very seriously.

He noted that since PRASA had been formed only in 2009, he could not comment on lines closed prior to that. Since its formation PRASA had not closed any lines. He clarified that the expansion of metrorail did not apply to rural areas as this was specific to urban centres. However, he fully agreed that PRASA should be taking an active role in making positive changes in the lives of all South Africans and it believed that any closed rail lines should be re-opened.

Mr Montana said, in answer to the question why the fleet was being replaced now, that it had taken him a full eight years to convince government that the current fleet of trains was bordering on obsolete and needed to be replaced. Indeed, the same train that he had traveled on as a young man was being refurbished today. He pointed out that in some matters his hands were tied, pending changes in government policy, and this was often linked to matters enacted by Parliament. PRASA was given funding, with specific directives, and one of those had been to revitalise metrorail. If rural areas were to be helped, then government must establish the empowering provisions and funding for PRASA to carry it out. He was as fully in support of broad empowerment as the Members, but government had to allocate funding according to demand, and if there was not the funding to address or prioritise certain issues above others, it could not happen. He noted the example of China, which, initially, had placed its policy focus on areas other than rail travel. However, once it had taken the policy decision, and was taking the necessary steps to achieve this, rural areas were being connected to rail, and that would lead to empowerment and decentralization. Again, he urged that South Africa change policy to achieve this example.

Mr Montana expressed the hope that PRASA would be tasked by government and provided with specific funding to get the youth of urban centres involved in rebuilding the railways.

It was stated that PRASA had an investment plan that not only dealt with metrorail but also with rail throughout the entire country, and this would be implemented, with government giving guidance on the parts of the country where it should be implemented.

In response to questions about location of the factory in Gauteng, he noted that in this province there were factories currently sitting idle, so siting the production plants there would spur new business and get people in those areas back to work. However, it agreed on the necessity to formulate plans for rural production. PRASA would deal with decentralisation, but it was necessary to ensure that the right infrastructure was in place to transport goods that might be made in rural areas.

Mr Montana made the distinction that PRASA dealt with passengers and Transnet dealt with freight, and whilst he could not speak for Transnet, he would be happy to discuss policies of road to rail, and question why there was more freight being carried on the road than by rail. The government, in the 1970s and 1980s, decentralised and transported by road instead of rail, and these policies had not been reversed post-1994. Mr Montana said that he was not calling for total elimination of all road transport, but a better balance between road and rail. It was more practicable to move some things by road, and others by rail. This issue lay with the Minister of Transport, and legislative amendment was needed to move forward.

Regulation of taxis was another matter that PRASA had raised. More taxis, and more long-distance independently-run bus lines were making long distance trips from city to city. Much of this transport was dangerous to passengers because it was not roadworthy. Again, he reiterated the need for changes to policy and legislation. Mr Montana said that PRASA was developing further plans for long distance trains and asked to meet again with the Committee in two months to present its plan in more detail.

With regard to skills development, Mr Montana assured Members that he would provide them with a list of all beneficiaries of the programmes. PRASA trade shows had been traveling to schools across the country, including rural areas, to demonstrate the career possibilities available in rail.

On the issue of stolen cables, Mr Montana said that technology was changing, and cables being put underground, and this would close the theft possibilities. In addition, the small amounts that had been set for bail had been raised as an issue, and more arrests had been made, following legislative changes and more charges laid against companies found selling stolen goods.

He called for assistance from the Committee in pushing for rural transport; he had noted their passion for the subject and would like to see this translated into positive action in Parliament. The Members’ desire to open up rural areas was shared by PRASA, and he reiterated that lines formerly closed should be re-opened, and more put in place. Again, he stressed that it was necessary to have a specific policy in place. PRASA lost R800 million on long-distance travel last year, and it had been intimated that this branch should close, but PRASA maintained that it would rather operate at a loss than lose that vital link between rural and urban areas.

He also noted the Women and Rail Project, on which PRASA spent R1 billion, to mobilise a female workforce in the rail system. PRASA had received over 2 000 applications.

Ms Mabija thanked Mr Montana for his response, but corrected him that the Members did not need to speak to the Portfolio Committee.

Mr Jacobs stated that the problem was that the Department of Transport “worked in silence”, and there was no synergy between the Standing and the Portfolio Committees on Transport. Members of the NCOP would certainly have no problem in raising the matters with the appropriate entity, the Department.

Mr Montana said that he appreciated this, but that the move to draft legislation needed to be pursued in the relevant House. He challenged the legislature to take the necessary steps to effect the changes they wanted. The current policy was not doing enough.

The Chairperson suggested that all relevant parties be called in together. She asked, in future, for better communication between PRASA and the NCOP, especially on policy, because it was essential that Members, in order to do oversight, must understand the projects, and ensure that people from every part of South Africa benefited.

The meeting was adjourned.


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