With South Africa at the head of investment, the southern cone of Africa has managed to give a strong push to its investments to reactivare rail transport in both passenger and cargo sectores, one of the most profitable and quick ways to reach the porta and export commodities.
African governments consider the establishment and improvement of existing rail corridors for the transport of goods to major ports in the region and the implementation of mass transit systems for passengers is a priority right now. The majority of consignments dedicated to infrastructure investments are being devoted to rail. South Africa, Namibia, Zambia, Zimbabwe, Botswana, Angola and Mozambique are the main countries with an active railway improvement plan.
It has a third of all railway lines in Africa, positioning it not only as the country with the most extensive network, but makes the South African region the most interconnected by this mean of communication, allowing an integrated development.
South Africa currently has 22,300 km of railways, the largest rail network in Africa. This network provides connections to neighbouring countries, which allows a good export of its raw materials. At present, 40% of international trade in the other member countries of the Southern Africa Development Community (SADC) use transport infrastructure in South Africa in order to export their materials. This has caused the need for a good rail transport Infrastructure, especially freight, since approximately 15% of cargo is transported through rail, being especially important for mining, industrial, agriculture and automotive sectors.
Passenger transport, however, is still far from being the first choice for citizens when travelling.
South Africa has experienced a break of rail investment that has left both its tracks as totally obsolete and neglected rolling stock. The urgency and necessity of having an efficient railway communication led the government to approve the investment plan for 2012-2030. The year 2013 became a turning point for transport in South Africa as it was at that time when the investments to take place were decided. After 30 years of neglection, the government finally announced plans to revitalize the railway system in the country and support major investment programs to improve infrastructure and acquisition of new equipment. Transnet Freight Rail (TFR), the state rail operator announced that more than 300-BNR (€20,000 M) should be invested in improving infrastructure, while Prasa, the operator of state-owned passenger services operator, affirmed the allocation should be of 150 MR (€10M) in rail passenger services. In addition, “investments mainly focus on acquiring rolling stock for more than 40,000 million euros, as well as remarkable works regarding signaling and infrastructure. To achieve the goal of improving trade between South Africa and international markets, transport infrastructure will be modernized, rail and port “, according to the Commercial Office of the Embassy of Spain in South Africa.
The modernization of the fleet of locomotives and wagons is necessary and is expected to increase in the next 5 years the number of locomotives to 3,300 and wagons to 85,000. Currently the plan is in its phase of “consolidation and selective expansion 2010-2015” which is carrying out “a greater focus on asset management, increasing the use of existing, and expanding commuter rail transit services to the public. Transportation planning, led by the central government, aims to formulate credible long-term plans, synchronizing with spatial planning and aligning investment activities in infrastructure from both provincial and local governments “, comments the Commercial Office.
For excellent rail capacity, main and priority improvements include:
◗ Fleet renewal of trains.
◗ Expand the capacity of mineral exports.
◗ Intensive application of information technology to transport systems through which flow is increased through new railway signaling systems and control of road traffic.
Transport of goods
Transnet is the public company that controls freight rail transport, pipelines and major ports. Among its various divisions there are two which are dedicated exclusively to the railway subsector:
◗ Transnet Freight Rail: dedicated to freight management and rail freight terminals.
◗ Transnet Rail Engineering: dedicated to the repair and maintenance of the fleet and their improvements.
The railway sector has lost importance in recent years in favor of road transport due to lack of investment in modernization of its lines.Furthermore, with regard to freight, also it raised expanding lines to transport ore: coal and iron are also projected. The company has announced plans to open 7,300 kilometers of lines of its subsidiary, offering grant private concessions to operate lines over a long term period.
The South African government plans to invest more than €1,450 M in the development of Integrated Rapid Public Transport Networks (IRPTNs), improving coordination between Prasa and Transnet operators, and the creation of multimodal transport systems (passenger: + bus and rail freight : road + rail).
In South Africa, the share of rail services under the general haulage is predicted to increase from 79% to 92% around 2019. According to studies made by the company Transnet, rail is around 75% cheaper than road transport in South Africa..
The comprehensive railway development projects in South Africa led by Transnet will achieve a position as the key logistics center in sub-Saharan Africa, through several expansion projects, including a major commercial rail corridor connecting the areas of Gauteng, Limpopo and Mpumalanga, South Africa, the capital of Mozambique, Maputo.
The project also includes a rail link to Swaziland, which would mean the emergence of an integrated regional rail system, promoting the further development of various industries within that corridor. The line of 146 kilometres between the two countries, along with the improvement of adjacent networks, will be vital in commercial terms.
In the short term, a rail link between Botswana and South Africa of 105 km will take place. There is also a project for the construction of the Limpopo-Durban line (north-south), which accounts for 60% of freight traffic, connecting the main econo mic center of the country (region Gauteng- Johannesburg) to the port of Durban. AIn long term, the following actions are likely to happen:
◗ Coastal line rail link between the Western Cape and KwaZulu-Natal through Eastern Cape.
◗ Sishen line connecting the railway network in Gauteng iron ore, Botswana and the Waterberg mine through the line between West Rand and Mahikeng.
◗ Trans-Kalahari Railway, rail link outputs the Botswana coal through the port of Walvis Bay in Namibia.
Moreover, Transnet has proposed itself to improve the reliability and efficiency of the South African railway networks, and in 2014 it won a contract for the construction of 1,064 locomotives; 599 electric locomotives constructed by the companies CSR ZhuZhou Electric Locomotive and Bombardier Transportation South Africa and 465 diesel locomotives will be delivered by GE South Africa Technologies and CNR Rolling Stock South Africa. The contract for €3,600 M is the largest investment in rolling stock performed by Transnet. This latent renewal of the South African fleet need is evident, according to certified transport ministry sources, to ensure that 51% of it is totally obsolete. “But improvements should also result in signaling the railway line, in the management and ticketing systems and the quality and services of existing stations”, according to the South African Commercial Office.
Prasa is the public company responsible for managing this sector. In recent years Prasa has presented several plans to address the major rail projects that South Africa urgently needs. Prasa plans, according to the Commercial Office of the Embassy of Spain in South Africa, to implement a new system of railway signaling technology in its network of commuter to replace the old system. The company reports that nearly 80% of their existing signaling facilities have become outdated and the rest is not able to respond to modern, safe railway operations.
As for specific projects, include the expansion of the South African High Speed line as well as the projects of urban mass transit systems in large cities.
Recently, the process of renewal of rolling stock of the intercity service Metrorail has begun, which operates in the provinces of Gauteng, Western Cape, KwaZulu-Natal and Eastern Cape. The success of the railway transport system is significant in Western Cape, which absorbs 30% of the volume of passengers. However, this percentage is considerably lower in the rest of the country where barely 15% of total urban passenger is achieved. For passenger transport the most important High Speed work focuses on the section Johannesburg- Durban, where a private participation in the form of PPP projects is desired.
In July 2014, the consortium Prasa and Gibela, led by Alstom concluded the financial closing of the contract signed on October 14th 2013 for the supply of 600 Mega X’Ttrapolis trains (3,600 cars) for the next 10 years. The contract includes the construction of a local manufacturing plant in Dunnottar, 50 km east of Johannesburg. In addition, the consortium Gibela will provide technical support and the supply of spare parts over a period of 18 years. The total value of this contract amounts to €4,000 M. The model trains traveling at 120 km/h, is the X’Trapolis Mega, the new X’Trapolis train developed by Alstom to fit the track width of 1,067 mm in South Africa. The first 20 trains will be manufactured at Alstom’s plant in Brazil, while the remaining 580 will be manufactured in South Africa in the new plant of Dunnottar. This project, with a local content higher than 65%, will create more than 1,500 direct jobs at the local factory and 33,000 indirect jobs over the next 10 years.
Another major contract is the one signed by Vossloh Spain with Swifambo Rail Leasing to supply 70 engines for use in transporting passengers in 2013. Swifambo will provide Prasa locomotives. The contract includes the supply of 20 diesel-electric locomotives, some already delivered and in service, and 50 dual locomotives with deliveries to begin in 2016. For the year 2014/2015 and 2015/2016 have been allocated 4,000 million (€286 million) and 5.300 billion rand (€379 million) respectively to continue the program and invest in new rolling stock.
Business opportunities for Spanish companies
Currently the Spanish railway industry is interested in planned investments in rolling stock, particularly locomotives, since a general renewal of all the South African fleet is being carried out.
South Africa not only requires improving the railways but also an investment in rolling stock. Also, the modernization of the fleet of locomotives and wagons seems necessary, because it is more efficient to provide a different type of rolling stock for each type of goods transported.
The high degree of specialization of Spanish companies in the subsectors that include infrastructure and transport equipment could be an advantage to access this market.
The main conditions to be met by private companies to be beneficiaries of supply contracts are mainly four:
◗ Creation of direct and indirect employment with the location of production in the country, 65% of the component must be local or manufactured locally.
◗ Compliance of BBBEE guidelines (Broad Based Black Economic Empowerment)
◗ Creation of programs that promote the formation of South African young professionals in the railway sector.
◗ Use of rail technology compatible with the current South African network.
Urban transport projects
Prasa’s modernization plan for urban transport plans an investment of 123 bn R (€8,000 M) and AIMS to make a strong emphasis on the replacement of rolling stock, integration of ticketing systems and integrated telecommunications networks. Furthermore the following extensions are foreseen:
◗ Baralink Rail Corridor. Provide better rail access to Soweto and older Baralink areas:
Baralink: ± 10 km, 3-4 stations
North-South link: ± 5 km, 2 stations
Link Lenasia: ± 19 km, 8 stations
◗ Daveyton – eTwatwa Rail. Extend the line and existing services to the east of the terminus in Daveyton in the areas of Chris Hani, eTwatwa and Knoppiesfotnein. With an area of 10 km, 4-5 new stations. Phase 2 will add 18 kilometres, and 6-8 seasons
◗ Moloto Rail Corridor. Phase 1: Construction of the rail corridor between Tshwane and Siyabuswa. It will have 120 kilometres and 8-10 seasons. The cost of the investment will be 14bnR excluding the costs of the purchase of rolling stock.
◗ Motherwell Rail Loop. Construction of the railway line of 7.5 km with 4 stations to provide rail access to Motherwell communities.
Construction began in 2013 and is expected to be operational in 2016.