Banele Ginidza
Minister of Transport Barbara Creecy has announced the country’s ratification of the Luxembourg Rail Protocol in a move poised to transform the railway landscape in South Africa.
Officially enforced from May, this protocol is set to unlock international financing avenues for new market entrants, enabling cheaper financing options for railway rolling stock.
Addressing the 25th Africa Rail Conference and Exhibition on Tuesday, Creecy emphasised the significant economic and environmental advantages of shifting freight and passenger transport from road to rail.
Creecy said South Africa’s ratification of the protocol would support the development of international financing in the railway sector and was an important step in facilitating financing in the rail industry, which is a key element for social development and economic growth in the SADC region and whole continent.
“As a country, we therefore encourage our countries in the region and continent to consider this important instrument to enable rail investment with favourable terms and will foster interoperability in our railways,” she said.
Creecy told the delegates that work was currently underway to publish the Network Statement and Rail Access Tariffs for 2025/26 for the rail industry, which was issued by the department last year.
“Open access to the rail network will allow train operating companies to increase the volume of goods transported by rail, while our network infrastructure remains State-owned,” Creecy said.
“This will ensure that South African minerals, vehicles and agricultural produce reach international markets, securing jobs and earning much needed revenue for our fiscus.”
Creecy said that the Department of Transport has established the new Transnet Rail Infrastructure Manager (TRIM) as part of its rail reform programme. This focused entity will manage rail infrastructure, allowing Transnet Freight Rail (TFR) to concentrate on transporting commodities through its rolling stock.
Another pivotal development mentioned by Creecy was the Cabinet’s approval in December for the rail Private Sector Participation (PSP) Framework. This framework is designed to facilitate private sector engagement in the railway industry.
The department has since been tasked with forming a PSP Unit dedicated to enhancing state capacity and assisting Transnet and the Passenger Rail Agency of South Africa with the procurement of potential PSP projects.
As part of this endeavour, the Department has signed a Memorandum of Understanding with the Development Bank of Southern Africa, which will act as the hosting agent for the PSP Unit. The initial phase of PSP projects has been identified and is set to be presented to the market for both passenger and freight rail, alongside port sectors.
The PSP Unit and Transnet have developed Requests for Information (RFI) on five priority rail and port corridors.
“The purpose of the RFI is to develop a commonly agreed Framing Problem Statement (FPS) for PSP in the rail freight and port components, which will assist the PSP Unit with the design of the bid packages to be issued later this year. The second batch of RFIs to be issued shortly will focus on passenger rail services,” she said.
Creecy said the White Paper on National Rail Policy, 2022 centralises strategic rail planning at national level and directs the development of a National Rail Master Plan (NRMP).
“The Rail Master Plan will be a comprehensive, evidence-based framework that outlines the future development of rail in our country,” she said.
“All of these policies are aligned with the 7th Administration’s apex priority of sustainable and inclusive economic growth, and will contribute to the sector-specific target of moving 250 million tons of freight on South Africa’s rail network annually by 2030.”
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