Rail regulator on the cards

The South African government is
contemplating an economic rail
regulator, as it believes this will
ensure transparency and clarity of
operations.
Jeremy Cronin, deputy minister
of transport, said that while the
government had realised the value of
a single state owned enterprise like
Transnet and had moved away from
its initial “slice and dice” policy of
the early nineties for its parastatals, it
was important to have a regulator to
ensure it knew what was “happening
in the country”.
Speaking at the AfricaRail 2011
conference in Johannesburg last
week, Cronin said a single stateowned
enterprise allowed for the
development of a strategic plan in an
integrated way that was especially
important in a country where the
economic and industrial heartland
was far from its ports and its global
markets.
“We need to create a balanced
freight logistics system that is
sustainable in South Africa. Transnet
has been able to use the fact that it
is in both ports and rail to crosssubsidise
freight rail through its ports
levies. And while we know it is not
popular in the shipping industry,
we understand the necessity of it
and government is not against it,”
he said, “but we do need it to be a
more transparent process. We are
steaming ahead with a rail regulator
in the country to ensure that we
know what is happening and we
don’t have a situation where there is
one player who is also the referee as
that will have a distorted impact on
our region.”
Cronin said while it was necessary
to have a rail regulator it was also
important to know why one needed
it. “If one takes the movement of
coal from Mpumalanga to the Port
of Maputo by Transnet Freight Rail
as an example, it becomes clear
why regulation is not necessarily
bad,” he said. “They are improving
turnaround times on the coal haulage
drastically but are using a port that
is not in our country. This in itself
is not a problem, but we must be
careful because if Transnet is using
the levies from South African ports
to subsidise its rail network and then
favouring a port out of the country it
can result in a problematic situation.”