PRASA rail rehabilitation & modernisation in 10 priority corridors

NCOP Transport, Public Service and Administration, Public Works and Infrastructure

22 June 2022
Chairperson: Mr M Mmoeimang (ANC, Northern Cape)
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Meeting Summary


In a virtual meeting, the Committee was briefed by the Passenger Rail Agency of South Africa (PRASA) on the modernisation and rehabilitation of the passenger rail network. The modernisation programme had three pillars: rolling stock general overhaul, rolling stock fleet renewal programme, and signalling and communications. The total cost of refurbishing rolling stock would amount to about R7.5bn over five years. Five contractors had been appointed to do this work, and it had the potential to create 2000 jobs. 96 new trains had been provisionally accepted, some of which had already been delivered to Gauteng, Kwazulu-Natal and the Western Cape. The automation of the signalling network was 99% complete in Gauteng, 92% complete in the Western Cape (where human settlements in the rail reserve had caused delays), and 73% complete in Kwazulu-Natal (where the need to appoint a new contractor and recent flooding had also caused delays).

Ongoing challenges to rehabilitation of the network included lack of scarce skills, security, tender hijacking (work being obstructed by people demanding to be involved), effects of climate change (flooding in KZN and the Cape Flats) and sourcing of material. Security was a fundamental requirement, without which all PRASA rebuilding efforts might be undermined. It would cost PRASA R1bn over the next three years, but it should not be regarded as a PRASA problem alone but as a national problem. PRASA was requesting permission to transfer R6.9bn from its capital expenditure budget to operational expenditure to address its current operational challenges.

The Committee was broadly appreciative of PRASA’s plans and progress. Members asked for information about the prospects for re-opening particular lines in Gauteng, called for regular engagements with PRASA going forward, and asked about the status of various contracts and tenders (including maintenance contracts, tenders placed on hold and a depot upgrade contract that had been declared irregular by the High Court). The Committee discussed security in depth, asking about the employment of security guards, walling of rail boundaries, security drones and cable theft. Members asked about policy on public-private partnerships and devolution of commuter rail responsibilities to provinces, job creation, and inter-departmental collaboration to solve the problem of human settlements on the Central Line in Cape Town. Members also observed that PRASA seemed to be overlooking the Eastern Cape when it came to modernisation and rehabilitation.

Meeting report

The Chairperson accepted apologies from the Minister and Deputy Minister of Transport.

Passenger Rail Agency of South Africa (PRASA) presentation
Mr Leonard Ramatlakane, PRASA board chairperson, observed that it was in the nature of the rail sector that development was slow, but assured the Committee that PRASA was making progress. He reported that the Mabopane Corridor was operational, the Central Line in Cape Town would be running as far as Nyanga by July 2022, and as far as Khayelitsha by the end of the year.

Mr David Mphelo, PRASA Acting Group CEO, outlined the PRASA modernisation programme for rolling stock general overhaul, rolling stock fleet renewal programme, and signalling and communications.

Rolling stock general overhaul
The total cost of refurbishing rolling stock would be about R7.5bn over five years, and individual coaches required general maintenance every nine or ten years. Five contractors had been appointed to do this work, of which four were new entrants that would require development. There was potential to create 2000 jobs. Each contractor would be required to train 20 youths each year.

Rolling stock fleet renewal programme
96 new trains had been provisionally accepted, the majority of which were in storage at the Wolmerton yard. Some of the new trains had already been delivered to Gauteng, Kwazulu-Natal and the Western Cape, but the majority of the rail network in the Eastern Cape used a slightly different electrical system because it was run by Transnet, so the trains would need to be customised for use in that province. The economic impact of the programme was huge.

Signalling and communications
The automation of the signalling network would increase the efficiency and safety of rail transport. Automation was 99% complete in Gauteng, 92% complete in the Western Cape, where human settlements in the rail reserve had caused delays, and 73% complete in KZN, where the need to appoint a new contractor and recent flooding had also caused delays.

Mr Mphelo gave an overview of the rehabilitation of the rail network. Eighteen of the 40 PRASA lines had been running since reopening after the COVID-19 lockdown, most using diesel traction. PRASA was working with other departments and entities to resettle people who had built settlements in the rail reserve on the Cape Town Central Line. There was also significant damage to the infrastructure that would require repair or replacement, including 10km of track that had been stolen. PRASA’s expertise was in running trains, but rebuilding its business would require developing its business culture to include a personal commitment to change, disciplined execution and a problem-solving orientation.

Mr Mphelo gave an update on the recovery of PRASA’s ten priority lines, drawing attention to the fact that some important sections had been closed to allow signalling to be upgraded, and that security measures had ensured that there had been no incidents on the Mabopane Corridor while the upgrade was underway. Ongoing challenges to rehabilitation include lack of scarce skills, security, tender hijacking (work being obstructed by people demanding to be involved), effects of climate change (flooding in KZN and the Cape Flats) and sourcing of material. He emphasised that security was a fundamental requirement, without which all of PRASA’s rebuilding efforts might be undermined. Security would cost PRASA R1bn over the next three years, but it should also not be regarded as PRASA’s problem alone but as a national problem. The operational subsidy formula also needed to be reconsidered because it did not currently incentivise efficiency. PRASA was requesting permission to transfer R6.9bn from its capital expenditure budget to operational expenditure to address its current operational problems.

Mr M Dangor (ANC, Gauteng) said that the Naledi-Johannesburg, Kliptown-Johannesburg and Randfontein-Springs lines in Gauteng were relied on by more than 2.5m people. When exactly would they be operational again?

Mr Mphelo agreed that there were many lines that needed to be brought back into operation. PRASA was prioritising lines according to their ridership. It was looking into contracting a service provider to run the line from Johannesburg to Vereeniging via Midway and it expected that this line would be running before the end of 2022. PRASA was also considering contracting the running of the Nigel, Randfontein and Daveyton lines to service providers.

Mr T Brauteseth (DA, KZN) welcomed the presentation. The reality was that rail was the cheapest form of transport and the unavailability of services was cutting off a vast number of people from economic activity. He called for quarterly engagements with PRASA going forward.

Mr Ramatlakane assured the Committee that PRASA shared its views on the importance of passenger rail transport. It was the cheapest mode of transport and the backbone of the transport network as a whole.

Mr M Rayi (ANC, Eastern Cape) noted the progress made by PRASA. He agreed with Mr Brauteseth that the Committee should focus on PRASA going forward. Perhaps oversight visits in Cape Town, Gauteng and Durban could go ahead as planned before COVID-19?

Mr Mphelo said he would welcome the opportunity of oversight visits or quarterly engagements with the Committee to demonstrate the challenges PRASA faced, the impact of its interventions and the progress it had made.

Mr Brauteseth was concerned that as many as four of the five contractors appointed to do rolling stock refurbishment were new entrants. He worried that they would not have the required skills and money would be lost. It was nonsensical to award tenders to companies that didn’t have the required skills.

Mr Rayi shared this concern. Who would be responsible for developing the new entrants?

Mr Mphelo explained that new entrants were companies that had not contracted for PRASA before. They might have done work in the rail space for Transnet, the mining industry or Gautrain. They were not necessarily new entrants into the rail space as a whole.

Mr Brauteseth fully supported the training requirement for contractors. Every tender awarded by the state should include a training requirement. However, there was a danger that it could become a “tickbox” exercise. PRASA must ensure that the trainees got certificates recognised by the South African Qualifications Authority (SAQA). Similarly, the skills development being provided through the Gibela programme must also result in the awarding of recognised certificates.

Mr Rayi shared these concerns and added that the placement of trained workers was also an issue that PRASA should look into.

Mr Mphelo asked to be allowed to provide details on training and placement in writing.

Mr Brauteseth asked why several tenders for signalling were on hold, given the urgency of this.

Mr Mphelo replied that the reason was the "dispute" between National Treasury and the Constitutional Court on public procurement guidelines. This "dispute" had now been resolved and all of the tenders listed as ‘on hold’ were now being evaluated.

The Chairperson noted that security remained a serious concern. He recalled that PRASA had earlier reported the deployment of 596 security marshals. He asked about the nature of the relationship between PRASA and the South African Police Service (SAPS). He recalled that there had been close collaboration between the two on the security tender.

Mr Mphelo replied that PRASA had made significant strides in security. This would require another dedicated briefing to cover security fully. For example, there had not been a single incident in the Mabopane Corridor since it had reopened. The number of incidents in the country across all categories had gone down. The marshals had been part of the People’s Responsibility to Protect (PR2P) programme, which PRASA was looking to revamp in the form of cooperatives, and it would address the governance issues that had arisen when the programme had launched initially. He offered to do a detailed presentation on security during the Committee’s oversight visit.

Mr Brauteseth noted the walling of rail boundaries was described as a ‘long-term’ goal. This was unnecessarily vague. A more precise timeframe was needed so the Committee could hold PRASA to account.

Mr Mphelo replied that an initial estimate of R7.2bn to wall the Mabopane Corridor and the Central Line had been made. PRASA had decided to focus on problematic areas throughout the network, rather than concentrating capital spending on just two corridors. It was long-term because capital expenditure also had to be allocated to modernisation and corridor recovery.

Mr Brauteseth asked if PRASA had looked into using drones to secure the rail network, given that it was impossible to have a guard at every point on the network. Drones could be used to patrol the lines, identify intruders and dispatch security teams.

Mr Rayi noted that Mr Brauteseth had raised the possibility of using security drones numerous times before but had not received an answer.

Mr Mphelo replied that security drones were already being used by private sector contractors in the Mabopane Corridor. PRASA was looking at building its own drone capacity as part of the second phase of its integrated security plan. It would not have made sense to invest in technology such as drones and cameras before the capacity to respond on the ground had been built. PRASA was also in the process of deploying armed guards, and the walls that were being built in hot-spots incorporated sensors and high-resolution cameras. R1bn would be spent on fencing depots at Paarden Eiland, Salt River, Springfield, Durban, Braamfontein, East London and Wolmerton.

Mr Rayi recalled that PRASA had claimed that 3100 security guards would be deployed. How many had been deployed so far?

Mr Mphelo replied that all 3100 guards had been employed, and the current insourced security capacity was 4922 personnel. PRASA was now looking at bringing in the private sector to fill the remaining gaps.

Mr Brauteseth asked if public-private partnerships (PPPs) and devolution of passenger rail services to provinces were being considered as solutions to PRASA’s funding problems.

Mr Mphelo replied that these possibilities were provided for by the White Paper on National Rail Policy.

Mr Ramatlakane confirmed that the White Paper provided clarity on collaboration with the private sector in the rail sector and on the devolution of services to the provinces.

Mr Brauteseth reported that aluminium conductors had been stolen along kilometres of rail in KZN. What progress had been made toward addressing this?

Mr Mphelo noted that the theft of metal components was driven by the value of the metal on the scrap market. Kenya had responded to this problem by banning scrap metal trading, and the Department of Trade, Industry and Competition (DTIC) was looking into similar measures. Copper was a particularly sought-after material. There were also cases where cables were cut but not removed, which suggested a different motive, namely sabotage.

Mr T Apleni (EFF, Eastern Cape) was concerned that the Eastern Cape was being overlooked in PRASA’s planning. The province was struggling with public transport. The lack of rail transport was having a knock-on effect on road conditions by forcing freight onto road. He called for PRASA to share time-frames for when it would start addressing the problems in the Eastern Cape.

Mr Rayi shared Mr Apleni’s concern, adding that it had been raised before. When would services from East London to Berlin be restored? Smaller provinces were being treated like second-class citizens.

Mr Mphelo replied that PRASA’s debt to Transnet had gotten so high that Transnet had taken the locomotives that PRASA had been using in the Eastern Cape. Since then, PRASA had brought in locomotives from elsewhere, and the plan was to re-launch diesel traction services in East London and Gqeberha the next day. The longer-term problem was that the electrical network in the Eastern Cape belonged to Transnet and ran at 25kV, different from the 3kV used on PRASA’s own network in the other provinces. This meant that deploying the new rolling stock in the Eastern Cape was more complicated. He assured Members that it was not PRASA’s intention to exclude the province from the rolling stock fleet renewal programme.

Mr Rayi was surprised that the rail reserve human settlement problems at Langa had not yet been resolved. This concern had been raised as far back as October 2021. The targeted resolution of December 2022 was dependent on resettlement, and called on PRASA to meet with the Department of Transport (DoT), Department of Human Settlements (DHS), City of Cape Town (CoCT) and the Housing Development Agency (HDA) to address resettlement. Meetings between the Ministers of Transport and Public Enterprises should also be arranged to address the unnecessary problems between PRASA and Transnet.

Mr Mphelo reported that there had been a significant improvement in the relationship between PRASA and Transnet of late. The Minister of Transport had coordinated a number of meetings between the DoT, Department of Public Works and Infrastructure (DPWI), and the Western Cape Provincial Government to address the resettlement issue. There had also been two engagements with the communities themselves in the last six weeks. HDA was leading the actual implementation of the resettlement, DHS had taken responsibility for acquiring the land, and CoCT had taken on the preparation of the land.

Mr Rayi asked if the 2000 jobs potentially created through rolling stock refurbishment contracts were included in the R7.5bn estimate or in addition to it. Could PRASA provide more detail on how this R7.5bn would be spent? How much would be spent per year and what was the cost of refurbishing a single coach?

Mr Mphelo replied that it worked out to about R1.5bn per year. The cost per coach varied depending on its condition but it was expected to be between R3m and R4m per coach. The jobs would primarily be indirect. In other words, they would be created by the service providers. PRASA was currently reassessing if the five contractors it had appointed would be able to carry out the work. It was possible that a supplementary market approach would be undertaken to increase capacity, which could potentially result in an even greater number of jobs created.

The Chairperson recalled that PRASA had indicated that it would challenge the Johannesburg High Court’s finding that the award of upgrading contracts for its Salt River and Springfield depots to GladAfrica had been irregular. How far was this process?

Mr Mphelo replied that new information about this process would be available soon. He asked for permission to report on the status of the challenge once legal processes had advanced.

The Chairperson said that the decline in passenger numbers indicated that the intended beneficiaries of this public transport service were no longer receiving it. It should be addressed as a matter of urgency.

Mr Mphelo shared the Chairperson’s concern about ridership numbers. Low ridership impacted PRASA’s ability to fund its operations. PRASA was prioritising the recovery of those parts of its network with the highest ridership. As the predictability and reliability of train services increased, passengers would be encouraged to make use of them. This is why PRASA was making such a large investment in signalling. Recovery of the corridors involved the rails themselves, electrical infrastructure and the stations.

The Chairperson appreciated the information provided and the commitments made by PRASA and the meeting was adjourned.

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