Transnet’s rail network is at a crucial juncture as the utility has indicated that it needs over R70 billion to address significant deterioration caused by financial underinvestment and rampant theft and vandalism.

This stark revelation was made by Transnet chairman Andile Sangqu, who detailed the challenges facing the State-Owned Company and its newly established unit, the Transnet Rail Infrastructure Manager (TRIM), which is tasked with overseeing rail infrastructure and operations.

Sangqu on Monday confirmed that the year-to-date figures, week 37 showed that 522 kilometres of cable has been lost by the utility and cost Transnet about R4bn in lost revenue.

“As TRIM, we envisage that a minimum of R70bn is required to fix it in the immediate future. We will utilise a range of funding mechanisms at this point,” Sangqu said.

“TRIM will look at access fees for train operating companies, continue with infrastructure grant funding applications, and aggressively pursue collaborative private sector partnerships to fund specific maintenance projects on the rail network.”

The unit has seen to the publishing of the draft Network Statement, which contains rules, time limits, timelines, procedures, services, charging principles, and terms and conditions governing the use of the railway infrastructure by Train Operating Companies (TOCs).

It also contains information regarding Transnet’s operational corridors which make up the network; and Service Level Agreements to be entered into between the Infrastructure Manager and the TOCs.

Sangqu, without revealing figures on Monday, said that cash reserves Transnet had allocated for the rail rehabilitation were inadequate, hence the need to seek other avenues with TRIM at the helm.

“We have done a technical assessment, we know where the challenges are and we are now busy with plan to raise funding for the replenishment and refurbishment of the track that will certainly help with stability,” he said.

“Signalling is antiquated equipment that is holding us back in terms of our recovery plan. We are busy with processes of procuring new signalling equipment and also working on our overhead transmission.”

Transnet also confirmed, post Sangqu’s remarks, that following the impasse with China’s CRRC e-loco over the disputed R54bn train procurement tender, Transnet Freight Rail (TFR) had approached the open market to source a “Step-In” Original Equipment Manufacturer (OEM) to collaborate on the sourcing of spare parts and repairing the CRRC fleet in 2023.

“TFR is happy to announce that after an intensive assessment process it has concluded on the appointment of a “Step-In” OEM, Alstom Ubunye (Pty) Ltd as the preferred bidder for phase one. Phase one is the “quick win” locomotives, a total of 48 locomotives will be repaired and released back into service within 17 months,” Transnet said.

It said Alstom had demonstrated capability of doing similar projects globally.

“The locomotives will be repaired in Transnet facilities in collaboration with Transnet teams. Phase 1 entails the repair and or replacement of parts comprising the same or similar specification to the current parts on the CRRC locomotives. The repaired locomotives will be deployed on key volume flows,” it said.

Transnet has to take delivery of new 23E Locomotives within 17 months, the remaining 110 locomotives of the 240 locomotives ordered will be delivered, in batches of 47 locomotives in the 2024/2025 financial year, 47 locomotives in the 2025/2026 financial year and 16 locomotives in 2026/2027 financial year.

The CRRC locomotives directly impact three major Corridors (North, Northeast and Cape Corridors) that account for roughly 50% of Transnet Freight Rail’s revenue, and support three primary mining sector segments, namely export coal, chrome, and manganese.

China’s CRRC Corp and Transnet engaged in legal battles after the utility halted the supply of 1 064 locomotives from four OEMs, including CRRC, saying that the 2014 contracts worth R54.4bn had been unlawfully awarded by the previous board and management.

BUSINESS REPORT