Thursday, September 2, 2010

Durban - Johannesburg High Speed Train: Vested interests should be guarded against

I am excited that a project that I was part of , first while at Namela Projects (now called Namela Consultants) and secondly while here at Ingerop South Africa is about to be implemented - The National Transport Master Plan (NATMAP) 2050 project commissioned by the National Department of Transport. The first thing that was announced which was part of the NATMAP 2050 is the high speed rail line between Johannesburg and Durban (which I think is unnecessary). Secondly, it was announced yesterday that passenger rail lines will be refurbished in the next 20 years.

Besides the Moloto Rail Line which has been moving in a slow pace, what seems to be an urgent project to the Department is the Joburg - Durban high speed train;

The "concept framework" for the Johannesburg-Durban speed rail would be completed by the end of the current financial year, March 2011.

Besides the project being unnecessary, I ask the merit of starting with the project when we still don't have a complete rail policy and an independent rail regulator. Are we not putting the cart before the horse? Shouldn't we first know how we want our rail system to be like before we build high speed rails which may become white elephants because of vested interests? And what about the National Planning Commission's input, seeing that they have to plan for the country? Such a commission can be a good guardian against vested interests as we saw with the Gautrain, especially when it is independent.

And what about Mr. Setuma's statement when he said;

“The biggest cost of the Gautrain was property reclamation. That does not apply to this project,”

The Mail and Guardian quotes him well;

Situma claimed the largest costs of building the Gautrain were land acquisition and tunnelling. Neither would be a factor in developing the rail service

This is contrast to what the President of the South African Road Freight Federation (SARF), Mutshutshu Nxumalo who said the folllowing;

"Although high-speed rail links have proven effective in other parts of the world, they have all been prone to intensive teething problems, and in most cases, considerable cost overruns.

"In addition, planners on the Johannesburg-Durban link will be faced with logistical challenges which are bound to add to the cost of the project," he said.

Not least of these was the fact that a high-speed rail link ran on a wider 1435mm rail gauge as opposed to South Africa's traditional narrow 1067mm gauge.

This meant that not only would new rolling stock have to be purchased, but it would have to be dedicated exclusively to the rail link.

"Secondly, there is the considerable difference in altitude between the two cities to consider."

Now, you may ask yourself who is talking the truth but we can only know once the feasibilities studies are done. But for now, the news coming from the conference is that many people are against the project.


Sinudeity said...

Thanks for the info. With regards to Durban v Gauteng (comparing to Gautrain), alot of people were against the development initially.

What are the current feelings on the Gautrain?

Here in CT, we have a business class express train. You get your morning paper and coffee onboard. But its at least 3 times the price of a normal train ticket (I could be wrong, only drove it once to give it a test drive). But then again, CT has an existing infrastructure, which I think is a big problem for Joburg and Durban.

Keep on keepin' on.

Googling said...

You welcome Sinudeity. The same business express you are talking about is available between PTA - Jo'burg and between Jo'burg and Soweto offering all those extras though people travelling on it are experiencing some problems with their services (e.g. no more paper available)

What are current the feelings on the Gautrain? Hard to say as no one has done any survey but to those who are using it are complaining about long queues, parking and some train doors not opening.

There are also complaints about the operation hours especially those who travel late at night coming from the airport (Gautrans is investigating if they can extend hours).

Anonymous said...

Your point on ested interests is well made.

I am extremely concerned about the financial implications of a project like this. The current cost floating around seems to be $30 Billion (R215 Bn). And this is before we start with escalations and overruns (remember that the Gautrain started its press releases witha R1.2 Bn budget back in 2000...)

With that kind of capital cost, maintenance, operations, interest and capital recovery must exceed 10% per year, so the project would need to bring in R20 Bn in revenues per annum just to break even.

I have seen projections of 40,000 passengers per day, which I am sure are wildly optimistic given that there are only 20,000 air passengers per week between the two cities.

So let's stick with the optimistic side and say that maybe the train can carry 100,000 passengers per week (that would be a lot of rolling stock...). Even at these numbers, passengers would have to be charged R2,000 one-way for the system to break-even - so either the ticket price or the volumes would be non-viable (probably both).

PRASA's CEO says that the project is feasible, but the train also needs to carry freight else the costs are prohibitive. No doubt! However, I doubt high-speed rail is the right solution for freight from an economic and practical perspective.

So here we have a project that should be dismissed out of hand on a simple desktop study, quickly becoming a feeding ground for an army of consultants and distracting the department of transport from where its primary duty and attention should lie. That's one concern. My greater worry is the life that these type of projects tend to take on once real money starts flowing around. When the vested interests get heavily vested, unviable and economically disastrous decisions get pushed through regardless of the reality.

Gautrain is often used as an example of a successful project. Yes, it is world-class and an engineering marvel. However, it was pushed through regardless of the consequences, despite massive cost escalations (R1.2Bn to R7Bn to R15Bn to R27Bn to ??) and it will be lucky to even be able to recover its operating costs. The capital cost will not be recovered. Job creation is also a poor argument - if you want to create jobs effectively, there are much better and cheaper ways to do it.

My blood goes cold when I consider a white elephant on this scale, with the potential to consume 1/3rd of our total annual budget. R200 Bn is a lot of schools, hospitals, houses, teachers etc and it is only the government and taxpayer that would ultimately pick up the tab on the excess between the project cost and it's income.

Googling said...

I could not agree more with you Anonymous. Its unfortunate that there is likelihood that the government will be going ahead with this project. I will post the relevant story

Anonymous said...

Contrary to what has been posted, the Gautrain (Sandton - OR Tambo) was completed within budget and ahead of schedule. From experience, it works perfectly. It's clean, safe and efficient. I've travelled the London - Paris fast train and it was awesome. So much better than a plane, and you arrive in the heart of the city. I, for one, look forward to the Jhb - Durban fast train and would definately use it. T