Devolution of Commuter Rail in South Africa – AECOM Adds To The Conversation

Devolution Background to the Status Quo

The Legal Succession to the South African Transport Services Act, 1989 transformed the South African Transport Services (SATS) from a government department into a public company. This was intended to streamline management and decision-making processes. From a commuter rail perspective, the South African Rail Commuter Corporation Limited (SARCC) was established with the primary mandate to provide commuter rail services to the public with an emphasis on reliable, safe and efficient rail services for commuters. SARCC was responsible for long-term planning and received funding and resources to invest in upgrading rail infrastructure, stations and rolling stock.

Whereas SARCC owned the commuter rail-related assets, Metrorail was the operator of the commuter rail services. The initial intention was for SARCC to act as the concessioning entity for the provision of commuter rail services and to have an arms-lengths relationships with the operator. In 2006 the ownership of Metrorail was transferred to SARCC, unifying the responsibility for commuter rail into one entity and SARCC was renamed the Passenger Rail Agency of South Africa (PRASA). Metrorail became an operating division of PRASA, which resulted that the referee and player essentially were located within the same entity. It could be argued that this arrangement was not optimal for the promotion of efficient provision of commuter rail services. Over the years, Metrorail faced challenges related to aging infrastructure, service reliability, passenger safety concerns and declining patronage numbers. The COVID Pandemic further had a devastating impact on commuter rail system due to the plundering of the rail infrastructure, stations and other assets. However, PRASA has since made significant progress in rebuilding and partial operationalisation of some of the existing commuter lines.

Commuter Rail and the White Paper on National Rail Policy, 2022

The National Department of Transport (DoT) started with analysis and research on how to improve the rail sector in 2014. Discussion and green papers were drafted over a period of eight years, culminating in the White Paper on National Rail Policy, adopted by Cabinet in 2022. The Policy’s thrust is to revitalise the country’s railway sector, where rail offers the most economically, environmentally, financially and socially viable logistics and or mobility solution and seeks to allow third party access and introduce competition for services rendered by PRASA.

The Policy recognises the importance of commuter rail as an integral part of the public transport system and envisions that by 2050, rail will provide the backbone for the passenger mobility system in urban areas. Substantial investment in the rail is emphasised to establish a high performing sector. The policy supports the introduction of private sector participation through concessioning of passenger rail lines where PRASA or state-owned entities cannot effectively run commuter services.

The policy further requires the development of a Devolution Strategy for Commuter Rail to guide the assignment of the commuter rail function to the municipal level, which is aligned with the National Land Transport Act, 2009 that allows municipalities to plan passenger rail services on a corridor basis.

DoT has to develop a devolution strategy in alignment with the Integrated Urban Development Framework. Thereafter it will capacitate municipalities as necessary and devolve operational subsidies for urban commuter rail to them to be managed as part of the development of their Comprehensive Integrated Transport Plans (CITPs).

From a passenger rail perspective, it is envisaged that by 2024 inter alia a National Rail Bill will be enacted, as well as a National Rail Master Plan and Devolution of Commuter Rail Strategy would be completed. Work on all of these is progressing at present. It is further envisioned that by 2030 local authorities will have completed planning of additional urban guided transit corridors and the implementation of the National Rail Master Plan priority corridors will have commenced. By 2050 the implementation of approved priority corridor projects for passenger rail will have been completed.

The Devolution Discussion

The City of Cape Town has against the policy background outlined above, taken the liberty to do a feasibility study with the aim to assess the viability of transferring the management of the commuter rail services in the City from PRASA to the Metro. The exact scope of the management responsibility is not common knowledge and in the public domain. This is as to whether it includes management of infrastructure, rolling stock, operations and maintenance, as well as transfer of ownership of assets. From the feasibility study, taking over of the management function is deemed feasible and would be to the benefit of its commuting inhabitants. The benefits and outcomes of the study indicate that lower income households are expected to save up to R932 million annually with an efficient passenger rail service, attract more than 600 000 daily commuters to rail, sustain 52 000 jobs and contribute R11 billion annually to the local economy.

As illustrate by the outcomes of the Cape Town feasibility study, the benefits of having an efficient commuter system operational in urban areas are significant. The question is whether the devolution of the commuter rail function or parts thereof to the municipal level will result in more efficient services being delivered in general.

In favour of devolution is that integrated planning is happening at a municipal level, whereby integrated public transport networks (IPTN) are planned in terms of Integrated Transport Plans (ITPs) and commuter rail corridors forms a key components of IPTNs, if not the backbone. Further and in support of the policy direction that government is taking with respect to public transport subsidies, namely allocation of subsidies based on an integrated public transport network basis, devolution makes sense. Institutional arrangements whereby municipalities become contracting authorities and concession out the provision of commuter rail services to operators, support the principle of separation of roles and responsibilities, one being the “referee” and the other “the player”, as well as open the door for participation of new players and investment. PRASA Rail may in many instances still be the contracted operator. Local government taking accountability for delivery of key service, of which transport is one, is also very important.

The risks, however, is that managing, operating and maintaining a commuter rail system is complex, capital intensive and the skills to do this is not necessarily abundant. Duplication of capacity at various municipalities may also be more costly and less efficient. Another consideration will be whether vertical integrated or separated models are pursued and if some components of the system are separated out, which those should be. A specific consideration for Gauteng is that commuter rail services run across metropolitan and municipal boundaries, so devolution to the province or one of its entities may make more sense than allocating it to individual municipalities.

Given the capacity building that that will be required at municipal level, devolution may have to be a step wise and gradual process, with a first step being devolution of the planning function. It may also be wise to run one or more pilots covering the different aspects of the devolution of the rail function and to be able to gain knowledge from lessons learnt.

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