Transnet Rail Infrastructure Management (TRIM) Delivers Update During Media Briefing

Thembi Lekanyane, the Rail Reform and Program Manager at Transnet Rail Infrastructure Management (TRIM), recently outlined the significant strides Transnet is making towards rail reform in South Africa during the 26 April 2024, media briefing. These reforms are part of a broader initiative under the National Rail Policy and the Freight Logistics Roadmap, aimed at Transforming rail transport by introducing third-party access and enhancing operational independence.

Transnet Rail Infrastructure Management (TRIM) Delivers Update During Media Briefing
Thembi Lekanyane, the Rail Reform and Program Manager at Transnet Rail Infrastructure Management (TRIM)

In October 2023, Transnet established the Interim Infrastructure Manager (IM) office. This entity is dedicated to preparing for third-party access and facilitating discussions with the Interim Rail Economic Regulator Capacity (IREC) Office. A major milestone was reached in March 2024 when Transnet published a draft network statement, marking the beginning of a journey towards open network access. This document serves to inform the public about the proposed access regime and has been put forth for public consultation.

The IREC has been proactive in this consultative process, publishing a call for public commentary in a government gazette on March 19, 2024, and setting a deadline for submissions by May 20, 2024. These consultations are crucial as they include presentations from various stakeholders, including Transnet, and aim to gather a wide range of viewpoints on the proposed access.

To demonstrate the onset of operational independence, Transnet has been tasked with developing a code of conduct to establish ‘Chinese Walls’ between its infrastructure management and operations. This code is part of a broader effort to delineate the roles within Transnet, ensuring unbiased and fair access to its rail infrastructure.

IREC plans to hold information gathering sessions in major cities including Durban, Johannesburg, and Cape Town, to collate feedback and further refine the proposals. This feedback will play a critical role in updating the network statement and tariff methodology proposed by Transnet. The final tariffs, pending approval by the ministers of transport and the Department of Public Enterprise, will determine when and how third-party access will be implemented on underutilised or available parts of the network.

Thembi also highlighted the ongoing discussions regarding the “B Network”, or low-density network, which involves creating a separate prospectus later this year in collaboration with various government bodies. This part of the network continues to accept proposals, maintaining a continuity with past practices prior to the introduction of the National Rail Policy.

The tariff setting process is a focal point of public interest and is primarily the regulator’s responsibility. Transnet’s role in this process is to propose a methodology based on local and global benchmarks, which has been validated by independent consulting advisors and tested against other railway systems. There are ongoing discussions with key stakeholders like the National Treasury and IREC to refine this tariff, particularly addressing issues like backlog maintenance and current debt.

As this reformative journey continues, Transnet remains engaged with government stakeholders to navigate the complexities of rail reform. The goal is to achieve a consensus on the tariff and ultimately, update and publish the final network statement that will govern the future of rail transport in South Africa.

Thembi also discussed the crucial topic of tariffs, an area of keen public and regulatory interest. Transnet’s approach to tariff setting involves proposing methodologies that have been extensively benchmarked both locally and internationally.

The proposed tariff methodology, which has been made public for review and consultation, is a well-established model widely used across global railways. This model has been refined with inputs from independent consulting advisors and validated through comparative analysis with other rail systems. Transnet’s role is to propose, while the ultimate responsibility for setting tariffs lies with the regulator.

This open process allows for adjustments and refinements based on public and stakeholder feedback. There are opportunities to revise the tariff, particularly to address issues like maintenance backlogs and existing debt, which are included in the current tariff considerations. Ongoing discussions with key stakeholders, including the National Treasury, the Department of Transport (DOT), and IREC, are critical as they navigate potential changes to the financial structures impacting the rail network.

As the IREC consultation process continues, Transnet is engaging in a detailed dialogue to explore all options for a fair and effective tariff system. The outcome of these discussions will significantly influence the final tariff approval, which is crucial for opening up access to underutilised parts of the network and for future network statements that Transnet will publish.

Looking ahead, once IREC completes its review and a consensus is reached, the next steps will involve a series of negotiations and approvals to finalise the tariff. This iterative process ensures that all perspectives are considered, leading to a well-rounded and equitable tariff strategy that supports the broader goals of South Africa’s rail reform efforts.

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