M Mpofu on behalf of J Radebe: Africa Rail Conference

26 June 2007

Programme Director
Honourable Minister of Railways, Ports and Harbour of Ghana
Professor Christopher Ameyaw-Akumfi
President of the African Union (AU) of Railways Mr Siyabonga Gama
President of the Southern African Railways Association (SARA)
Chief Executives of the various railway companies in Africa and around the
world
Distinguished guests
Ladies and gentlemen
All protocol observed

Allow me to welcome such a distinguished group of international and local
specialists in all aspects of rail to our country. It is truly an honour.

It is not my intention this morning to pre-empt any of the conclusions that
any of the conference papers will present. My objective is to locate rail
within our current transport policy and to identify a number of rail challenges
for the continent and the rail industry as whole. If this leads to debate and
discussion later on my task will have been achieved.

Our rail system needs to be located within a broader context of pressures
arising from increased economic activities and development of our continent.
This context is inevitably driven by a strong economic drive for the
optimisation of rail transportation, increased investment and funding for
sustainable growth of rail sector as well as effective corridor utilisation for
profitable inter-modal transportation. But most importantly an effective rail
safety regime that cuts to the heart of this strong economic drive.

I'll try to expand on some of these aspects keeping in mind your discussions
later on.

Distinguished delegates, a deeper analysis of our African rail
transportation reveals a range of complexities such as costs and specifically
our ageing rail networks infrastructure and a decreased volume of freight it
carries. This underscores the urgent need for greater investment and
optimisation of rail transportation, which investment is the critical component
for accelerating growth.

South Africa is a classical example of economic development that shows
enormous growth in key sectors. Our country continues to be characterised by
high growth in high value sectors such as the automotive manufacturing, mining
and agricultural sectors. This kind of growth and development depends primarily
on the continent's ability to move goods and deliver services to their
destinations in an efficient, effective and reliable way without failure of our
rail infrastructure and the fear of goods safety.

It is precisely for this reason that the optimisation of rail transport
capabilities and its sustainable growth is fundamental and is the single most
important challenge facing the freight logistics sector not only in South
Africa, but in the continent as a whole. Our rail transportation has a
significant role to play in our attempts to improve the freight logistics
system but also in ensuring the improvement of our public transport system and
the efficient movement of both goods and people.

In South Africa rail has for a long time carried less tonnes of total
surface transport volumes, compared to road volumes. As a result, we have begun
a process of reversing the shift from road to rail particularly of cargoes that
should ideally be transported by rail. We are currently implementing the
National Freight Logistics Strategy that seeks amongst other things to
integrate first and second economies as well as supporting the integration of
marginalised local economies with the main logistics corridors.

The key objective of our strategy is to reduce the costs of doing business
and removing inefficiencies and reducing the impediments that the logistics
system has placed on businesses and their long term sustainability.

Our view is that the growth of the road freight sector has primarily been
for two reasons, namely the current inability of our rail operations to respond
to new production methodologies and techniques, operate predictable and
efficient services and the fact that some of the rail customers are prepared to
pay for a reliable and fast door to door service provided by road freight,
which has provided a viable alternative.

The question we've tried to answer is how can we improve the efficiency of
our corridors and rail capacity for an improved performance of our
economies.

Through our Freight Logistics Strategy, we have begun to ensure a
significant increased in traffic, volumes and changes in the nature of rail
freight cargo particularly with huge improvements to the rail infrastructure
and rolling stock emanating from huge investments by government and State
enterprises.

Through our strategy we have made the inroads in ensuring the reduction of
the destructive competition among the modes and emphasising the need for
co-existence of modes and their role in the movement of goods, services and
people across the length and breadth of our country.

Through these interventions we are also attempting to improve the living
conditions for those isolated by geographic locations from the mainstream
economies. We have embarked on an initiative to revitalise the branch lines
across the country, which are the "livewires" of the economies of small and
rural towns and as such have played a major role in unlocking economic
potential within the framework of Local Economic Development (LED). Such
interventions have to a large extent rejuvenated small towns, thus enabling the
diversification of economies and the opening up of access to economic
opportunities to remote communities.

We believe that bringing in new capacity in branch lines will help add new
capacity and begin to attract rail friendly cargo that currently is on our road
network. I challenge delegates to deliberate on how these initiatives can be
applied elsewhere in the continent.

Our discussions on development issues must also include not only the
economics of the freight logistics sector and its direct and indirect impact on
other sectors of the economy. They also must include our perspective for the
revitalisation of rail within the public transport and mass transit system.

Last year, South Africa begun a process of consolidation of the various
entities currently engaged in the long distance and local commuter rail
services such as Metrorail, Shosholoza Meyl and the South Africa Rail Commuter
Corporation (SARCC) and this runs parallel to the rationalisation of bus, taxi
and rail routes and subsidies operating mainly in metropolitan areas. This is
part of our Public Transport Strategy and Plan.

We have also begun with the implementation of our National Rail Passenger
Plan which charts the way for the future of the passenger rail services in
South Africa.

The focus is on the:

* full recovery, where we would restore the whole rail network
* limited system, where we would close all but efficient lines/routes
* priority rail corridors, where we would balance the socio-economic planning
objectives on rail existing strengths.

The SARCC/Metrorail Five Year Capital Requirement Plan and 2010 requirements
will need a total of R23 billion. These developments will boost our rail plans
into quality public and private sector investment in rail infrastructure,
effective co-ordination between spheres of government and effective management
of the national passenger rail entity and enhancing regional growth.

South Africa expects to see increased numbers of trains, services and
passengers taking advantage of a world class rail based public transport
system. Some of these initiatives are associated with preparations for the 2010
FIFA World Cup. Others are already part of the local government integrated
transport plans. We are also injecting huge amounts in our transport
infrastructure projects:

* R8,5 billion for Passenger Rail Infrastructure
* R8,2 billion for Public Transport Infrastructure excluding rail
* R5,5 billion for National Roads Infrastructure
* R9,2 billion for the 2010 Public Transport Infrastructure Development
* R19,5 billion for the airports infrastructure over a period of five
years.

Our Rail Safety Regulator (RSR) is already playing a major role in ensuring
that we have a sound railway safety regime. The regulator has already put in
place appropriate safety regulations and standards, ensuring that operators
develop sound safety management systems, conducting safety audits and
inspections, conducting occurrence and incidence investigations as well as
reporting on the state of safety in the railway sector.

My Department is also working closely with the SARCC, Metrorail, SAPS and
the RSR to ensure that security is uplifted within our rail system. In this
regard more than 5 000 SAPS rail personnel are being deployed in our passenger
rail system leading up to 2008.

However, the continued increased number of level crossing occurrences and
unacceptable high number of people struck by trains on running lines continues
to be our major cause for concern. I have no doubt that your discussions will
interrogate ways of reducing such incidents but a strong emphasis should be
placed on our safety record as a continent. We need to intensify our work for
the harmonisation of the implementation of safety standards and better
integration between safety permit and inspection systems. We need to
interrogate ways of ensuring integrated systems of inspection to ensure
uniformity across the continent. The control of hazardous cargo shipments for
instance needs to be better managed.

I am confident that we will continue to develop and grow and that the safety
regime for rail will remain a cornerstone and even a strong driver of economic
growth into the future. I am sure that the deliberations of this conference
will go a long way to helping us along that route.

I therefore trust that as we continue with our deliberations, we will
sufficiently address the key growth impediments and challenges identified by
the African Transport Ministers in Brazzaville such as the:

* elimination of missing rail infrastructure links
* development of policies and instruments to bring private sector participation
in the railways
* identify main African level infrastructure integration projects to achieve
the objectives of the Millennium Development Goals (MDGs) and the Almaty
Programme of Action
* a clear articulation of the role of state in driving factors that contribute
to the current state of the African rail network.

I thank you for your attention!

Issued by: Department of Transport
26 June 2007
Source: SAPA