Call for ‘Rail Act’ to contain rate hikes

South Africa must look to institute a rail act, similar to the National Port Act, to make rail transport more independent and competitive, Peter Inman, project director at Coega Development Corporation, told FTW recently. “The port act engenders competition, but do we have a rail act? If we do, we can start competition,” he said. “We understand the cost sensitivity of manganese exports. If it’s too expensive to export, it’s a waste of time.” Transnet Freight Rail (TFR) has a policy of not increasing tariffs much above Consumer Price Index (CPI), but FTW understands that the company recently increased tariffs on the manganese line between Hotazel in the Northern Cape and the Port of Port Elizabeth in the Eastern Cape by more than triple the CPI. The rate was R280 per tonne. This has now been upped to R310 per tonne, and before the year is out, the tariff is set to increase closer to R400 per tonne, FTW understands. “If this is correct, then the Transnet tariff increase is more than triple the CPI,” a consultant, who declined to be named, said. However, this is still way below the road tariff of R780 per tonne, the consultant said. “So even at these whopping increases, Transnet is still cheaper than the trucks.” Government is currently reviewing a green paper on a national rail act, which would more clearly define public participation in new structures, as well as private initiatives. “I see a major shift on the Transnet side, with more of an inclination to have public-private partnerships,” Iain Geldart, managing director at Bulk Connections, told FTW. “There seems to be some realisation that Transnet cannot achieve what it needs to on its own. I say the time is absolutely right for publicprivate initiatives,” Geldart said. Bulk Connections is part of the Bidvest group, and operates a wide range of specialist material handling facilities in SA. In Durban it manages the two bulk berths and its terminal specialises in the soft handling of all bulk commodities, particularly the loading of manganese, coal and anthracite and the offloading of coke. This is in line with the view of transport economist Andrew Marsay, who presented the case for a privately run rail route between Gauteng and Durban in last week’s FTW special feature on Gauteng. Transnet’s aim is to invest R300 billion in the national rail network in a drive to move cargo from the road onto rail. The company said its aim was to do so as part of a seven-year plan. “We will do our best to make sure everyone comes on board with the right cost,” Cleopatra Shiceka, general manager at the office of the CEO, Transnet, said. She indicated that Transnet was indeed seeking partnerships with private companies, especially where Transnet aimed to create pick-up hubs for bulk commodities like manganese ore and ferro-alloys. “Some mining companies have smaller parcels, others have bigger ones,” she said. “We will be looking at consolidation of the parcels. We are discussing that and working on a model.” Not every mine has its own siding. Therefore consolidation hubs make good sense in a bid to reduce costs and streamline logisitics for the same commodity, she said.