South Africa has no choice but to turn to the private sector for port and rail infrastructure investments, as Transnet does not have the capability at present to deliver it on its own. According to James Holley, CEO of Traxion, the country needs at least R200 billion to fix approximately 12 000km of the current rail network to ensure efficient rail delivery. The bottom line is that infrastructure has to be refurbished if we want to see any form of logistics improvement in the movement of minerals. The capital required can be in the form of a government bailout or the private sector. Government has said it will not give Transnet a bailout. That leaves the private sector. Holley said international experience showed that rail reform and performance improvements were achievable, but only through efficiency-driven investment and modernisation. Pointing to major rail operators in the United States, he said their success was rooted in the basic principle that railways were a high fixed-cost business where operators must do more with less. He said these operators had achieved scale and strong performance by investing in technology and leveraging modern communication and computing to drive efficiency. As an example, Holley pointed to a simulation Traxion had conducted when the Durban Johannesburg corridor was considered for concession in 2023. He said the study had assessed the impact of replacing legacy wayside signalling, designed in the 1970s and implemented in the 1980s, with modern signalling enabled by real-time communication, where signalling sits in the cab of the locomotive and trains talk to each other. According to Holley, this could reduce transit time from City Deep to Bayhead from 18 hours to nine hours and 52 minutes, while also doubling capacity. Instead of trains running every 20 minutes, they can run at 10 minutes, he said, adding that this could increase capacity from 72 trains in each direction per day to 2 016 trains across both directions per week. With current transit taking two to three days on the Durban corridor, the revenue potential of each train movement was being diluted. At nine hours and 52 minutes, you theoretically invoice them 60 times, he said. Six times revenue growth from the same transit by simply following the golden rule and doing more with less. LV
View the discussion thread.
