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'Rail sector needs private funding'

Oct 18 2010 15:30 Sapa

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Johannesburg - SA's rail network will need private investment to run smoothly, Transport Minister Sibusiso Ndebele said on Monday, following recent disruptions in the Passenger Rail Agency of South Africa's long-distance services.

"There is indeed a role for the private sector in the rail sector," Ndebele said in reply to a parliamentary question.

"It is important though to find the appropriate role and balance between the private sector and the state in funding rail passenger transport," he added.

"In fact, rail passenger transport will always require public funding in order to ensure affordability, due to the high cost of rail infrastructure, which the passenger will be unable to afford without some form of government support."

The minister said "key policy interventions" such as effective regulation and upgrading of the rail system would be necessary to make the sector an attractive prospect for private investors.

The minister was responding to a question by the Democratic Alliance on a statement by Shosholoza Meyl, a division of Prasa that operates long-distance services, that it needed R1.4bn per year to run its business effectively, but received only R450m from Prasa.

Ndebele said the funding shortfall was "not a new revelation" and Prasa was seeking to make Shosholoza Meyl's operations more efficient and cost-effective.

Long-distance passengers were left stranded in August when Shosholoza Meyl suspended services as a result of a dispute with Transnet over maintenance work and costs.

Talks between Transnet and Prasa to resolve the dispute are ongoing.

Ndebele said Transnet's claim that the rail operator owes it some R1.3bn was "far from conclusive" and "raises a serious concern" as it had taken months to substantiate its charges.

DA transport spokesperson Manny de Freitas welcomed Ndebele's recognition of the need for private investment in the rail system. He said his party would press for Parliament to draw up "legislation that would detail the partial privatisation of Prasa".

De Freitas urged the government to sell off Shosholoza Meyl and Metrorail.

He said Prasa should, however, retain ownership of the physical components of the rail network and be responsible for maintenance costs, safety and funding capital investment.

transnet  |  prasa  |  sibusiso ndebele  |  transport



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