On Monday, 9 May 2022, Minister Fikile Mbalula launched the National Railway Policy White Paper in Pretoria, South Africa. The South African Minister of Transport highlighted the importance of efficient implementation of the priority structural reforms in the economy to enhance the progress of economic recovery. The National Rail Policy is one of the measures that will be implemented as an aid toward economic recovery efforts.
“The key policy position on the introduction of third-party access on the rail network is one of the key thrusts to drive efficiencies and improve competitiveness,” he said.
“The National Rail Policy will guide the building of the local industry capacity thereby boosting the manufacturing capacity and localisation. The government will ensure that industrialisation and the local production of steel and other inputs, rail lines and supplies, and rolling stock is promoted through policies that will require state and private operators to procure all supplies from South African-based manufacturers,” said Minister Mbalula.
The policy will not only enhance local infrastructure and industrialization, however, it also provides a greater platform for young and black industry females to enter as local manufacturers as well as manufacturing joint ventures.
A joint committee will be developed by the department working with the Department of Trade, Industry, and Competition (DTIC) to work on a strategy that will be utilized to engage with the private sector on matters relating to investment plans to unleash opportunities within the sector.
Rolling stock is one of the key deliverables needed for the success of this approach. The South African Transport Minister said, “Government supports the provision of own rolling stock by freight and passenger train operators as an additional funding source in kind, to close the gap between existing funding sources and overall funding requirements, as well as the provision of extra capacity by private sector rolling stock leasing companies,”
“Train operators and State-Owned Enterprises (SOEs) can lease their rolling stock to any other party and encourage new entrants in the market. Pertaining the role of Private Sector Participation (PSP) in railways, the department will spearhead the development of a Private Sector Participation Framework for the rail industry,” he continued.
The objective of the PSP Framework is to guide the collaboration between the large SOEs as well as companies within the private sector for the delivery of new economic infrastructure.
“The pursuit of PSP should, however, not be construed as the privatisation of the South African Railways, as there is no such policy on the table. Central to the passenger rail reforms is the introduction of High-Speed Rail into the service mix,” Mbalula said. A High-Speed Rail Framework will be developed by the government as encouragement for the prioritisation of high-speed rail corridors in South Africa.
Over 3 years, the short-term policy reforms will include accounting separation of Transnet Freight Rail’s Infrastructure Manager and Train Operator, the introduction of the National Rail Bill; Introduction of the third-party access; Concession of branch lines; Finalisation of the National Rail Master Plan and; Finalisation of the Commuter Rail Devolution Strategy.
“Our long-term vision of an institution of higher learning specialising in rail engineering and operations will be built on the foundation of interventions such as the Centres of Excellence model the Department has developed in partnership with universities in the country and the Transnet Freight Rail’s School of Rail.
“This will go a long way in ensuring that there is adequate capacity to respond to the current challenges and giving the implementation of the National Rail Policy the necessary encouragement,” the Minister said as he was elaborating on the policy reforms that will place the industry on a sustainable growth path.