Major projects under way to address and prevent bottlenecks

Government is not disputing the “knight in shining armour” status of road – but the economic benefit of boosting rail cannot be denied. Neelesh Amaidas, a project manager with the Department of Public Enterprise, told FTW that the economic costs of rail under-performance in many areas considered to be rail friendly were a cause for grave concern. “Logistics costs as a percentage of GDP are significant compared to other countries while transportation costs are reliably pegged at more than 50% of total logistics costs,” said Amaidas. “Externality costs such as congestion, damage, safety and gas emissions are estimated to cost the economy about R34 billion per annum.” He said even more compelling and specifically applicable to the road sector was the currency volatility and fuel costs that had become more prohibitive in recent times. “It is certainly praiseworthy that many road freight service providers have reduced costs through efficiency gains and improved asset utilisation. Notwithstanding there is still much we can do.” He said government had embarked on a massive infrastructure programme to expand and maintain logistics infrastructure including road, rail, air and seaports as well as pipeline infrastructure. “Over the past five years Transnet alone has invested approximately R88 billion. While capacity constraints are still painfully evident, major projects to address as well as prevent bottlenecks have commenced.” These included the Ngqura Container Terminal, the Cape Town Container Terminal, the reengineering of the Durban Container Terminal, the major export lines, the coal and iron ore as well as the new multi product pipeline. “Over and above Transnet has committed to increasing its rolling five-year Capital Expenditure Plan from R93.4 billion to R110.6 billion by the year 2015.” Amaidas said without taking anything away from the important role road had played in the transport of freight in the country, from a rail perspective there was a large untapped market for long-distance freight over dense corridors. “According to the CSIR a 50% shift of feasible intermodal freight from road to rail over long distances can save the economy R4.4 billion per annum. Rail volume growth on the key corridors is therefore paramount to our economy.”