Railways Africa^TM

Welcome to issue 1:2019, the first issue for the year and five more to go! Don’t forget that we publish weekly online – we have a freemium (free version) and we also offer the Premium (paid version) platform.

I flew down to Cape Town recently, landed at 8am. With no luggage I was out the door and ready to be transported to the 1st African Rail Digital Summit... Two hours later, I finally arrived.

So, as all disgruntled people do, I took to my social media channel… "Sitting in traffic, now running late... it really is time the City of Cape Town built a version of Gautrain! I am sure it would be viable. What are your views? #publictransportation #highspeedrail #rail."

I have had some interesting feedback.

Charles Nel - Mankovect (Pty) Ltd. Owner and Engineering Manager, mechanical. Independent Contractor, suggested:

Possibly a more versatile light rail system with road rail capability? Thinking about it and all the new technology it would be the perfect opportunity for Virgin Mobile (train and telecom) to be part of. Alternately an Elon Musk hyperloop. The immediate option is to enter a PPP with a 30 year concession.

Daphney Vunguvungu - AfriGIS. Freelance GIS Technician. Mapper. Spatial Data Analyst, asked:

Will it not run into the same financial woes Gautrain is currently facing? Struggle to attract new customers after a short number of years? It sounds like a much-needed solution to a long overdue problem, but is it sustainable?

Boetie Zandberg - Senior Railway construction/operational/maintenance manager, noted:

Everything is possible Phillippa. If other countries can have such trains why not us. I think we got all it takes. From engineering people right down to execution staff and resources. It's just a matter of what the vision is for our country. Deteriorate further or uplift.

Sherief Khan - Director at WC Perway

Been saying that for ages. Traffic is a nightmare nowadays no matter what time you leave. Possible suspended rail line in the middle of the N1 towards cape town. Imagine all that traffic off the road. Another line from the south M5 into Cape Town and another 1 from the west coast marine drive.

However, it was Daphney Vunguvungu's question that had me thinking.

Sustainability comes down to reliability and safety. The key issues, I believe that impact that reliability and safety portion is as follows: First and last mile – remain an issue, for example – you can drive yourself, but the parking is full. You can catch a bus, if the stop is within walking distance, but, only if the buses are operational (the industrial action really impacted Gautrain here). Or, you can Uber and or meter taxi there – and this is the biggest crunch! Catching an Uber at a station is no longer considered safe, and having had first-hand experience of being hauled out of an Uber, at a station, with Gautrain guards looking on, it was unpleasant to say the least!

However, in the planning phase for this system many years ago, there was no Uber, so development around safe drop and collection zones was not included in the plan.

Going forward, I am sure that the Gautrain Management Agency team will be taking this into consideration – unlike shopping centres who continue to overlook customers who arrive and leave in this way.

Reliability and or predictability in service means that users need confidence in the system, that it will be working. I believe, after the industrial action where, the train was not operational for an extended period of time, people returned to their cars. I get really nervous about using the airport link because, I have heard all about being stuck on the line – thankfully, I have never experienced that! We have a way of telling the stories, and it is in the amplification of these stories that one thinks it happens all the time, when in reality, it does not. Gautrain's statistics are testament to this.

There are so many outside factors that impact, such as - theft, or power issues and industrial action – not all of this is within the operator’s control. So, this requires the "will" of all stakeholders to address these issues and minimise the risk, in so far as possible – to regain as well as maintain user trust.

Capacity is also an issue – specifically at peak times. Which is understandable – South Africa never had a system like this and therefore, who would have been able to predict the uptake? The challenge is around how this is being addressed, it is not a simple case of going to the shops and buying it off the shelf... And, considering we are already two years behind on the current procurement of additional cars having to restart the process again, will cause further pressure and less demand.

But, back to Cape Town, I am sure that if they took the lessons from Gautrain and took the next 40 months to build and not talk, it will change Cape Town for the better.

But it is easy to talk about this, it is easy to say "build it they will come!" Without really understanding all the factors involved, money aside! CEO of the Gautrain Management Agency, Jack van der Merwe, in a recent Coffee with the Editor, took the time to explain the cost implications and facts to consider for Cape Town and Durban. He also touched on Gautrain 2 and outlined their thinking around the next steps, for the much needed additional rolling stock. Enjoy!

There are cities all over the world where public transport (trams, light rail, monorail, sky rail, high speed as well as busses) is the preferred transport method, with trains that are mind-blowingly beautiful never mind fast! We as a continent need to get there.

Local Participation

So, I have a question, but first let me give context and perhaps it is more than one question.

The Namibian TIIP – Transport Infrastructure Improvement Project, which obtained funding from the African Development Bank and went out for international competitive bidding last year, for the upgrading of the 210km Walvis Bay-Kransberg railway section, as well as, for rail replacement and turnouts.

The Metal and Allied Namibian Workers Union (MANWU) have petitioned the ministry for the immediate halt or stop of these projects and for the process to be restarted, as there are sufficient local contracts who can execute the required work. In other words, the work can and should be done by local businesses employing local people. Sounds similar to what the South African industry has been saying. But – I'm wondering if our thinking in terms of funding and projects should be looked at differently from conception?

Each country regardless of continent, knows what needs to be done. Surely, as projects are tabled there is a need to understand the in-country capacity first, as part of the planning phase?

These projects take years to develop, so it is therefore possible to develop skills in conjunction with a country’s development plan, or am I wrong?

By the time the government has approved the project for implementation, in order to seek funding, the procuring entity/ministry and or government state-owned company – already has a clear understanding of what is available in order to negotiate the terms with the funding agency, in respect of procurement and participation at that time and not retrospectively.

I am aware that all funding agencies have their own requirements, especially in terms of benefiting the origin of where the funding has come from. I learnt this through both Eskom and Transnet in the early days of local content. It was the regular excuse used in terms of not supporting local - "we cannot do that because the money comes from the World Bank and therefore we have to comply to those rules and not our public procurement rules." Despite desperately trying to stimulate the manufacturing sector and create employment.

I am curious on two fronts. First, all funding agencies like to develop these spectacular graphs of how their money has improved the lives of people in the countries where they have provided funding. Hard to believe when the local industry is locked out, in-so-far-as project participation and employment. It would be interesting to align, imports and unemployment figures and debt numbers for pre, during and post project funding reporting.

Two, surely a bank like the African Development Bank, the key word being African, would have an interest in promoting those on the continent and matching the gap with foreign participation? Surely, their goal is to see the prosperity of the continent, or am I missing something?

Okay moving on to other interesting things:

The Rand Merchant Bank (RMB) recently released a "Where to invest in Africa" report. Specifically, we only look at the areas that involve and or impact rail. However, you can download the full report from the link provided at the end.

The report notes that nearly a third of African countries are landlocked, which results in the demand or need for robust, efficient and high-capacity transport corridors. However, due to poor infrastructure the cost of transportation is around 50-175% higher than other parts of the world.

It also notes that for the transport sector – annual costs are USDBN (preliminary figure) at between 35-47 – where 80% by 2025 will be spent on preservation and 20% on development.

Extracts From The Report:

The Importance Of Ports

Most of Africa’s trade is seaborne. Ports are therefore critical to Africa’s trade make-up. Generally speaking, sub-Saharan Africa’s (SSA) port infrastructure has limited capacity when it comes to terminal storage, operation and maintenance – some countries without even the ability to handle large vessels. The lack of adequate investment, inefficient land-based logistics and stringent government policies and regulations are the key challenges facing African ports.

The World Economic Forum’s (WEF) analysis on infrastructure development shows that a 25% improvement in ports’ performances could reduce the price of imported goods in SSA by as much as US$3.2bn annually. And that as much as US$2.6bn could be added to the value of exports. It could also add 2% to the region’s GDP. Further to this, PwC estimates that a massive US$2.2bn in logistics costs could be saved annually if the average quantity of goods coming in and going out of ports doubled. The top ten African ports, per the report:

• Durban
• Cape Town
• Ngqura
• Abidjan
• Mombasa
• Djibouti
• Lagos-Apapa
• Tema
• Dar es Salam
• Dakar

Roads And Railways

According to The Programme for Infrastructure Development in Africa’s (PIDA) Priority Action Plan, US$75bn is needed for transport projects between 2012 and 2020: US$16.5bn is to be spent on rail projects and US$11bn on roads, highlighting the deficiency in road and rail links.

Roads: The Main Route For Trade

Eighty to ninety percent of passenger and freight traffic in Africa is by road. The World Bank estimates that US$200bn of trade in Africa is carried by road networks. But, regardless of its importance, the road network density is much lower in Africa than that of other regions. The infamous Trans-African Highway (TAH) might be rejuvenated if initiatives like the Continental Free Trade Area (CFTA) are introduced. The TAH is the largest road network connecting major African cities. The project was launched in 1971, and the African Union (AU), the AfDB and the United Nations Economic Commission for Africa (UNECA) are the major donors to the 60,000km road network project.

Railways

Only 84% of Africa’s 82,000km (some report suggest that Africa has 90,000km) rail network is operational. And most of the rail lines are low-speed, small-scale and undercapitalised networks that carry minimal volumes.

The biggest challenge to the development of the railway industry is that some firms struggle to transform themselves from subsidy-dependent legacy companies into more efficient commercial undertakings. Poor economic, technological and institutional conditions have further aggravated the situation in Africa. These have ensured that railway infrastructure is at the bottom of the infrastructure-financing list.

Interest in investing in railways has, however, re-emerged, underpinned by the sector’s capacity to move large volumes of freight or passengers in an energy efficient way. Railways could also help curb congestion costs: the rapid pace of urbanisation on a continent without effective mass-transit systems (such as railways), means significant congestion costs.

As was mentioned in a recent Coffee with the Editor session during the 1st African Rail Digital Summit in Cape Town, hosted by the International Union of Rail (UIC), Nepad and the African Union – with the investment in Rail will come a greater demand for power generation and energy projects to meet the needs of the transport sector.

Recent Railway Developments

The report notes - One exciting development is the introduction of Africa’s first cross-border and longest electrified railway service, which connects Ethiopia and Djibouti. Commercial operations began in 2018, with each train able to carry a load equivalent to 200 trucks – and able to cover the 750km route in 12 hours, compared to three days by road. Freight capacity is expected to reach 24,9m tonnes by 2025.

Another big project is the...

The full version is in the magazine.