The news that Transnet Freight Rail and Traxtion Sheltam have jointly cancelled the Cape Corridor resuscitation contract is, in equal parts, bewildering and dismaying.
It was an initiative that held great promise; the coming together of two entities whose union could spell only good things for our logistics economy by breathing new life into South Africa’s ailing rail network.
It was a vision that spoke of modernisation, economic growth and a brighter future for our country.
So, what went wrong?
Transnet Freight Rail, whose once-celebrated standing as a pillar of South African society has been almost entirely eclipsed by its unrelenting tendency to disgrace itself, opened its atrophying arms, inviting a private sector suitor, in possession of a good fortune, to revitalise the rail network, thereby restoring the SOE’s respectability and relevance.
Traxtion Sheltam, a strapping and most eligible railway enterprise with successful operations throughout Africa, looked beyond the vista of red flags and swiped right. Some of the most heartwarming stories of successful courtship feature a degree of intrepid good faith. Depressingly, this was not destined to be one of them.
Despite the expertise of the private company, and the national government’s purported commitment to fixing the country’s collapsed logistics sector through a more visionary approach, the contract itself was soon revealed as a poisoned chalice, and the project was stifled before it could see the light of day.
Several preposterously unrealistic conditions, ranging from a two-year timeframe for capital investment projects that often require 10 years for meaningful change, to Traxtion needing to make use of 75% of Transnet Freight Rail’s rail slots while this infrastructure is inherently dysfunctional, when taken together, make one wonder whether the entire exercise was sabotaged from the start.
Without having access to the internal desires or intentions of those who drew up the tender specs, it’s impossible to definitively conclude it was deliberately designed to fail. Whether this was a result of oversight, bureaucratic inefficiency or other motives remains a matter of speculation.
What is clear, however, is that the tender’s design was riddled with flaws so significant as to create an environment that is actively hostile to any business prospects.
Conventional wisdom recommends that when confronted with something mind-bendingly confounding, one need only “follow the money” to find the explanation. Except in this case, the money was actively chased away; ridden out of town on a rail, at a speed exceeding anything Transnet Freight Rail has leveraged elsewhere in recent years.
The contract cancellation announcement last week was followed by muttered assurances that this was merely a pilot venture to test market appetite, and that our national government has a master plan to fix all the logistical systems that they’ve broken.
Traxtion was one of two bidders for the contract in 2022, so it could be argued that, at this stage, the question of the market’s appetite has been definitively, categorically answered.
Nevertheless, we will have to wait and see whether this dalliance in the marketplace will lead to a more considered second attempt by Transnet Freight Rail to haul itself into viability, to fulfil the critical role it is supposed to.
If not, the country’s roads will continue to deteriorate under the weight of cargo-bearing trucks, while the cost of living increases with the rising price of diesel, and our landscapes and mobility remain blighted by the stubborn stain of congestion.
Aside from the economic handicap, road deterioration and traffic, road freight is five times more emissions-intensive than rail freight. The road transport sector contributes approximately 91.2% of total transport greenhouse gas emissions, and a modal shift in freight from road to rail would meaningfully reduce transport-related pollution. There is something for everyone in the argument for functional rail services.
It is encouraging to know that sustainable public-private partnerships in South Africa are very much possible, even within sectors characterised by unpredictability.
The City of Cape Town’s Urban Mobility Directorate has, since 2013, been running the MyCiTi bus service in partnership with vehicle operating companies comprising membership of individual minibus-taxi associations, namely Kidrogen (Blaauwberg/Atlantis, Dunoon, Maitland, United and Ysterplaat taxi associations) and Transpeninsula Investments (Central Unity, Peninsula and Vredehoek Devils Peak taxi associations).
In addition to these, we work with Sibanye and Golden Arrow Bus Services in running the Table Bay Rapid Transit service. We have an interim vehicle operating contract for the operation of the N2 Express service, with the N2 Express Company made up of Codeta (Cape Organisation for the Democratic Taxi Association), Route 6 Taxi Association and Golden Arrow.
Beyond these, we have achieved positive results with non-contractual pursuits through a pilot transport operating company initiative with the 7th Avenue Taxi Association and our ongoing negotiations with the South African National Taxi Council in the minibus-taxi task team.
To be fair, reinvigorating a logistics network that has been neglected and its administration mismanaged for roughly two decades is by no means a straightforward task, especially when the resources to do so are perilously constrained.
The City of Cape Town sits with fiscal challenges similar to the rest of the country, and ventures to partner with private industry have included extensive research and conservative planning, underscored by an appreciation that these have to be mutually beneficial in terms of commercial viability for industry, fulfilment of the service delivery mandate for local government, and sustainability for all involved, including residents.
It is the antithesis of whimsical spontaneity, which is exactly what we need from government. DM