Spoornet initiatives send a positive message

Groundwork laid to reclaim longhaul business JOY ORLEK RECENT INITIATIVES by Spoornet have laid the foundation for the increased use of rail as a sustainable alternative to road transport. That’s the view of RailRoad Association of South Africa CEO John Thompson who told delegates at last week’s Freight Logistics Conference in Midrand that he was optimistic that Spoornet was on the right track. An outline of comparative logistics costs drives home the urgent need for Spoornet's revival. In South Africa the figure bandied about for the cost of logistics as a percentage of GDP is 14.3% compared to the European and North American average of 7.5% and 8%. But Thompson believes that this figure is way below the true mark. A new study by the Centre for Scientific and Industrial Research (CSIR) reveals that freight costs rose 11% last year and road stole a greater share of the country’s transport, ‘compounding the structural inefficiency in our economy’. This probably puts the cost of logistics in excess of 15% and closer to 16% in Thompson’s view. No-one would disagree that a lot could be achieved by moving bulk onto rail over longhaul routes if rail could handle it efficiently and predictably. But has any progress been made to achieve this? In Thompson’s view, ‘yes’. “The Road Freight Association is actively engaging with Spoornet to explore means of working together to reduce the total cost to South Africa of moving freight,” says Thompson, which is a step in the right direction. In addition government is committed to funding the transformation of Transnet and Capex and upgrading plans for Spoornet have been made public. “Spoornet’s spending profile also indicates a focus on corridor traffic – bearing in mind that rail becomes cost-efficient over longhaul routes. A recent CSIR report indicates that Spoornet’s share of the total tonne kilometres of freight movement amounts to 37.5% compared to a 65% share by Canada rail.” Another positive development is the planned transfer of Spoornet infrastructure to Transnet and then to a National infrastructure agency within 18 months. “This means that government will be responsible for the costs of maintaining infrastructure and costs will be covered by access charges determined by a yet-to-be-appointed economic regulator. This will put rail on an equal footing with road on a user pays principle,” he said. Branch lines could be offered to third parties, a concept that has been successfully implemented in North America, for example, where these lines are generally run by profitable and efficient entrepreneurs. Spoornet’s plans over the next four or five years will see CoalLink capacity moving up from 64mt to 84mt, Orex from 27 mt to 38mt with a target of 60mt, and General Freight Business (GFB) from 84mt to 110mt with a target of 160mt. “By the end of 2008 the transport industry will see a positive, radical, legislated policy direction change,” said Thompson.