Back on the Rails

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South Africa's rail network has come under fire from regulators for poor safety standards, a high level of accidents and a lack of capital investment, all contributing to weakening one of the economy's main arteries.



South Africa has the 10th largest rail network in the world, with more than 30,000 km of track. However, while the high-profile $3.3bn Gautrain Rapid Rail Link project, which will connect Pretoria and Johannesburg, has been the main focus of the industry's attention, the rest of the network has been shunted onto the sidelines for a long time.



On August 21, the Railway Safety Regulator (RSR) released its report on the network's safety standards. The report revealed there were 2950 collisions or derailments in the 2005-2006 financial year, with two state-owned companies, Transnet Freight Rail and commuter rail operator Metrorail, accounting for 80% of all rail accidents.



The RSR report said one third of all accidents were caused by human error, with another 22% being the direct result of failing infrastructure, and the remaining 45% caused by a combination of both factors.



The immediate financial burden of these accidents for the two state operators amounts to more than $88m, according to Mosenngwa Mofi, RSR's chief executive officer, not taking into account the cost to the economy caused by delays and damage to goods.



The fact that poor infrastructure played a part in more than 67% of all accidents on South Africa's rail system prompted Mofi to call for immediate action.



Transnet Freight Rail (TFR), the largest rail operator in South Africa, is expected to spend $4.7bn over five years, with the state injecting an additional $2.1bn over three years to improve passenger services.



As a first step, TFR placed an order early this year for 400 new engines, and is considering adding another 100 to the order. It is also planning to upgrade the company's stock of freight cars and to step up both maintenance and infrastructure further down the track. However, with the average age of TFR's locomotives being more than 20 years and that of its rolling stock 32, there is a lot of catching up to do.



Currently, TFR carries 10% of South Africa's overland freight cargoes, with road transport having dramatically eaten into its market share over the past 20 years, a period roughly coinciding with its failure to invest and upgrade infrastructure. The company has set the ambitious target of capturing between 30% and 35% of the cargo market by 2012, setting in place a strategy that will focus on growth areas in the South African economy, such as the agriculture and the automotive components sectors.



Siyabonga Gama, TFR's chief executive, said he was confident the company could build on a recent improvement in its turnover, which grew by 12% this financial year.



"We have arrested the decline and are beginning to see growth," he told the local press on July 31. "Transnet has been able to conquer its demons from the inside, and is now ready to come out and realise continued growth. It will not be an overnight success, but by 2012 we believe that South Africa will have a world-class freight railway."

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