Department of

Transport

REVIVAL OF RAIL BRANCH LINES

&

ACCESS TO MARKETS FOR SECOND ECONOMY PRODUCERS

DEPARTMENT OF TRANSPORT

13 JULY 2006

CONTENTS

BACKGROUNDOBJECTIVESHOW RAIL LINES CHOSENSTATUS QUOLINKAGES TO NFLS

Department of

Transport

BACKGROUND

STARTED PROCESS WITH KZN FREIGHT DATABANKPILOTED PORT SHEPSTONEP-HARDING LINE

IDENTIFIED FOLLOWING LINES:NKWALINIBELMONT-DOUGLASEASTERN FREE STATE MAIZE CLUSTERUMTATA-AMABELEKZN MIDLANDS TIMBER CLUSTERDE-AAR-NAKOPNATAL SOUTH COASTKRUGERSDORP-RAMATLHABAMA

SOURCED FUNDING FROM DEATSPOORNET IMPLEMENTING AGENT

Department of

Transport

OBJECTIVES

SHIFT OF RAIL FRIENDLY CARGO BACK TO RAILBBBEE/SMME DEVELOPMENTENHANCE LOCAL ECONOMIC DEVELOPMENTJOB CREATIONSKILLS DEVELOPMENTESTABLISH RAIL INFRASTRUCTURE UTILITYDEVELOP BRANCH LINE STRATEGY

Department of

Transport

HOW LINES WERE CHOSEN

LINES CHOSEN ON FOLLOWING CRITERIA:TECHNICAL ANALYSIS

IS LINE OPENHOW LONG IS LINEWHAT IS CONDITION OF LINEWHAT IS CLIENT BASEWHAT COMMODITIES MOVE ON LINEPOTENTIAL TRAFFIC TO BE CARRIED ON LINE

Department of

Transport

HOW LINES WERE CHOSEN (CONT)

SOCIAL ANALYSISLOCATION OF LINELEDJOB CREATION POTENTIALLINK TO IDZs & SDIsSPIN-OFFS

ECONOMIC ANALYSISREGIONAL CONTRIBUTION ON LINE (SADC NETWORK)CONTRIBUTION TO EXPORTSCONTRIBUTION TO DOMESTIC MARKETSJOB CREATIONINVESTMENT REQUIREMENTSFINANCIAL SUSTAINABILITY

Department of

Transport

STATUS QUO

STARTED POCESS IN FOLLOWING LINES:NKWALINI (KZN)BELMONT-DOUGLAS (NC)KEIL RAIL (EC)

NKWALINISUGARCANE & POTENTIAL CITRUSBUDGET ALLOCATED IS R10 MILLIONAPPOINTED SAFLOG & GIDISAM AS BEE COMPANIES EMPLOYED 120 PEOPLE IN AREA

BELMONT-DOUGLASMAIZE & WHEATBUDGET ALLOCATED IS R 39 MILLION EMPLOYED 946 PEOPLE IN AREA

KEI RAILPROJECT COMPLETED & OPERATOR NEEDED

Department of

Transport

Department of

Transport

LINKAGES TO NFLS

VISIONDepartment of

Transport

•Integrated functional regulators reporting to the Minister(Economic, Safety, Security, Environmental with independent regulatory oversight mechanism reporting to the Minister)•Non-commercial Infrastructure Utilities own/operate networks•Operators(public and private) run on network•Regulators manage across cargo cycle•Public and private funding of infrastructure•More direct role for Government

NFLS: CURRENT SITUATION

LIMITED SPACE FOR BEE & SMMELOW CONCENTRATION ON CARGO NEEDS OF 2ND ECONOMYINAPPROPRIATE REGULATORY FRAMEWORK & INSTITUTIONAL STRUCTURE

Department of

Transport

29

Implementation Transitional Blueprint exampleRail

Current State

•Vertically Integrated•Commercial network and operations

Transnet3 Year Strategy

•Vertically Separated•Commercial network and operations

Vision

•Vertically separated•Single Rail Network utility •Multiple public and private commercial operators

Nuanced Transitional

3 year Strategy

•Vertically Separated•Commercial Main network•Developmental Secondary network (public infrastructure utility)•Open access secondary network•Mandatory access on main network

FREIGHT TRANSPORT 2003

8

T h e s t r u c t u r e o f t h e s u r f a c e f r e ig h t t r a n s p o r t m a r k e t -S o u t h A f r i c a ’ s s u r f a c e f r e i g h t t r a n s p o r t m a r k e t ( m i l l io n t o n s )

T o t a l s u r f a c e t r a n s p o r t9 0 0 m t ( 3 1 0 ) = 2 8 0 b n t o n k m

R o a d7 2 0 ( 2 5 0 ) = 1 8 0 b n t o n k m

R a i l1 8 0 ( 5 5 0 ) = 1 0 0 b n t o n k m

C u r r e n t r o u g h e s t im a t e s b a s e d o n 1 9 9 9 b a s e c a s eN o t e : F ig u r e in b r a c k e t d e n o t e s a v e r a g e t r a n s p o r t d i s t a n c e

I n - h o u s e5 6 0 ( 2 2 5 ) = 1 2 6 b n t o n k m

F o r r e w a r d1 6 0 ( 3 4 0 ) = 5 4 b n t o n k m

H ig h v a lu e c o m m o d it ie s

4 0 ( 4 0 0 ) = 1 6 b n t o n k m

E x p o r t m a c h in e s9 0 ( 6 5 0 ) =

6 0 b n t o n k m

B u lk c o m m o d it ie s

5 0 ( 5 0 0 ) = 2 5 b n t o n k m

R e s t3 0 ( 5 2 0 )

G a u t e n g -D u r b a n

1 6 ( 6 0 0 )

G a u t e n g -C a p e T o w n

1 4 ( 1 4 0 0 )

L o n g d is t a n c e ,h ig h v o lu m e ,

n e x t t o r a i l6 0 ( 7 5 0 ) =

4 5 b n t o n k m

S h o r t e r d is t a n c e s ,lo w e r v o lu m e s ,

S h o r t a g e o f r a i l in f r a1 0 0 ( 9 0 ) = 9 b n t o n k m

C o a l6 5 ( 6 0 0 )

I r o n o r e2 5 ( 8 0 0 )

Department of

Transport

16

Tonnage1105mt (270)

Road920mt (200)

Rail185mt (600)

Corridor140mt (680)

Metropolitan580mt (75)

Rural200mt (200)

Corridor45mt (680)

Metropolitan10mt (150)

Rural30mt (475)

Sishen & Rbay100mt (670)

Figure in brackets denotes average transport distance

Tonkm300bn

Road190bn

Rail110bn

Corridor95bn

Metropolitan45bn

Rural40bn

Corridor30bn

Metropolitan1bn

Rural15bn

Sishen & Rbay65bn

IncomeR120bn

RoadR105bn

RailR15bn

CorridorR50bn

MetropolitanR30bn

RuralR25bn

CorridorR6bn

MetropolitanR1bn

RuralR2bn

Sishen & RbayR5bn

Freight Transport 2004

CSIR 2005

Department of

Transport

Inaccessible/ deep rural areaswith relatively high populations

and poverty levels

Inaccessible/ deep rural areaswith relatively high populations

and poverty levels

Rail network

National road network

Deep rural areas

Spatial disparities between Transport Infrastructure and 2nd Economy Environments

Department of

Transport

SCHEMATICDepartment of

Transport

National

Core Node Core NodeCore network

Provincial

Primary Feeder Network

Primary FeederNode

LocalSecondary Feeder Network

SecondaryFeederNode

Tertiary FeederNode

Tertiary feederNetwork

Department of

Transport

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