Big hike in train ticket prices

Cape Town - South African passenger train ticket prices will increase 15% to 20% from April 1 next year.

This could hardly hit consumers at a more inconvenient time, because Eskom's first planned tariff increase also comes into in effect on that date.

But Lucky Montana, chief executive of the Passenger Rail Agency of South Africa (Prasa), says there is no alternative.

The company will not be able to operate sustainably if prices do not improve.

The hike should in fact have been implemented at the beginning of April this year, and Prasa can no longer put it off.

Montana points out that prices have remained unchanged for the past five years while costs, particularly of electricity, have risen significantly. Metrorail is a major consumer of electricity.

Eskom's last 31.3% tariff increase pushed Metrorail's electricity bill up by R100m. The latest application for 35% means that Metrorail needs an additional R300m from ticket sales to continue delivering its services.

Montana says Prasa's board has already approved an increase, but what it will be is still to be determined.

In its 2008/09 financial year Prasa produced a loss of R1.05bn.

Jan-Dawid de Villiers, acting deputy director-general for Public Transport, points out that Prasa recoups only about 15% of its costs from tariffs. The remainder comes from government subsidies.

- Sake24.com

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