Prasa receives ‘unaffordable’ proposals for mainline passenger services

The Passenger Rail Agency of South Africa (Prasa) is experiencing a major headache in reviving its mainline passenger service, with proposals received through a request for information (RFI) process being unaffordable and more costly than air travel.

Transport Minister Barbara Creecy confirmed on Monday that Prasa is currently not running any mainline long-distance passenger service.

Speaking on the sidelines of the Southern African Transport Conference, Creecy said the Department of Transport (DoT) issued an RFI in August last year to re-establish passenger services on three lines – Gauteng to Musina, Gauteng to Durban, and Gauteng to Mbombela.

Affordability hurdle

Creecy said Prasa is still assessing the information received, but the key issue is “how to make this affordable and competitive with air because currently it’s not”.

She said the existing rail lines are owned by Transnet and the DoT is looking at a range of options, including cross-subsidising passenger services with freight – adding that all the proposals submitted are dependent on a state subsidy.

“The state does subsidise urban passenger rail but doesn’t at the moment have the money in the fiscus to subsidise long-distance passenger rail.”

“We are trying to look at an affordability model, and I suppose the question is whether you run trains with different carriages. That is what I mean by cross-subsidising with freight,” she said.

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Creecy said the DoT is carrying out economic modelling on this issue.

She said the department will be submitting another request to National Treasury for R35 billion through the Budget Facility for Infrastructure (BFI) to upgrade rail lines and signalling.

Financial constraints

Prasa’s biggest challenge, said Creecy, is its financial constraints and the need to reach break-even.

“The break-even number is 300 million passenger journeys [a year].

“I have got a team of experts from the UK in there at the moment looking at whether we can run trains more frequently, even with the existing infrastructure and signalling.”

She said the deadline to fix all of these lines is the current term of government (the next general election is by mid-2029), adding that it has limited finances in the current financial year and is doing work on the network, but not as fast as it would like.

“If we can get the passenger numbers up, then the economies of scale look better. That is why we are looking to see if we can run a train every 15 minutes, instead of every hour, with the existing infrastructure,” she said.

Passenger rail recovery gathers pace

In her address to the conference, Creecy said she was proud to announce that, over the past two years, Prasa has been able to recover 35 of the 40 priority rail lines, with a section recently recovered on the Midway-Lenz route.

She said this recovery has entailed the re-signalling of lines, as well as the upgrading and refurbishment of stations and perway.

“In the 2020/21 financial year, in the immediate aftermath of the Covid pandemic and widespread vandalism and destruction of rail infrastructure, Prasa recorded 10 million passenger trips.

“By the end of the 2025/26 financial year, 101 million passenger trips were recorded. The aim is to reach 600 million passenger trips by 2030/31, in line with pre-pandemic passenger figures.

“In our current economic climate, the provision of passenger rail to working class South Africans is a socio-economic imperative,” she said.

Turning to freight and logistics, Creecy said the DoT has been able to observe the impact of the reforms that are being undertaken to ensure that South Africa’s transport and logistics sector acts as an enabler and catalyst for sustained and inclusive economic growth, and not as a constraint.

She said years of underinvestment in logistics infrastructure, coupled with the post-pandemic decline in rail and port performance, have intensified competition from neighbouring countries seeking to capitalise on SA’s logistics challenges.

Creecy reiterated that rail and port reform are at the centre of government’s transport agenda, with ambitious reforms seeking to re-establish rail as the backbone of the country’s freight logistics system.

Creecy said the rail reform programme is informed by the White Paper on the National Rail Policy of 2022 and the 2023 National Freight Logistics Roadmap, with several significant developments in the past year aimed at turning policy into tangible outcomes.

Private operators enter rail network

She referred to the DoT in March this year approving 11 private train operating companies (TOCs) to access the national rail network.

These TOCs will bring their expertise and capital to rail operations, while the network will remain state-owned and belong to the people of South Africa.

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Creecy said operations are due to commence in April 2027 and these operators will play a key role in government’s target of moving 250 million tonnes of freight on the Transnet rail network by 2030.

She said the Transnet Rail Infrastructure Manager (Trim) last Thursday published its second Network Statement that aims to ensure these newly appointed TOCs can raise the capital they need to equip themselves with rolling stock and workers to begin operations.

Freight rail targets

Creecy added that the Draft National Rail Master Plan, which aims to address the gap between current annual freight volumes of 165 million tonnes and the market demand of 280 million tonnes, was approved for public comment earlier this year.

“As a sign of healthy demand for third-party access to the rail network, private sector participation projects situated at the Ngqura Manganese Export Corridor, [the] Richards Bay Dry Bulk Terminal, and the Container Terminal will all go to market during the course of this financial year.”

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Speaking on the sidelines of the conference, Creecy said the current unaudited volume is about 169 million tonnes, but the important figure is the break-even target of 180 million tonnes.

She said achieving that target is a realistic objective for the current financial year, and once that figure is reached it means there is more to invest in the lines.

She added that funding from the BFI has been secured for the coal and iron ore corridors, which are currently the most profitable lines for Transnet, and upgrading these lines will obviously allow Transnet to increase capacity.

“We do think that 220 million tonnes is doable, but there is still a lot of work that has to be done in terms of upgrades.”