The South African commuter rail service is set to be restructured. Government, in the National Transport Policy, has adopted concessioning as a tool to improve efficiencies in the commuter rail business and to bring in private sector capital and expertise. Commuter rail is responsible for over two million passenger journeys daily.
SARCC's mandate is to ensure that, at the request of the National Department of Transport or any local government body designated as a transport authority, rail commuter services are provided in the public interest. These services are currently provided under contract by Metrorail Services in terms of an operating agreement.
The SARCC owns commuter rail assets including land and property in and around stations. Intersite Property Management Services, the Corporation's wholly owned subsidiary, develops and manages this property portfolio.
The SARCC's 1999/2000 business plan is built around four areas of focus, namely Positioning, Sustainability, Asset Base and Information. These focus areas provide SARCC's strategic direction in support of the Corporation's Mission and the Moving South Africa vision.
As a government agency responsible for commuter rail services countrywide, the SARCC has been charged with the implementation of concessioning in South Africa, and it has begun this restructuring process.
The SARCC is the recognised champion in ensuring the provision of world-class commuter rail services for all transport authorities.
The South African Rail Commuter Corporation is the preferred agent of government and other transport authorities. The Corporation is committed to ensuring the provision of effective, efficient and sustainable rail commuter services in support of public transport through:
SARCC will, by entering into an exclusive concession contract with Metrorail during 1999, assume the role of concessioner. The Corporation will position itself in line with its new role as follows:
SARCC aims to provide and develop commuter rail services in South Africa by:
SARCC's assets (including railway lines, signals, rolling stock, property and land) will be managed efficiently and effectively in order to:
SARCC's operation and management functions rely on various types of information and information systems to assist in performing daily tasks and to support decision-making. The Corporation will undertake the following tasks:
SARCC will conclude a negotiated agreement with Metrorail which will give Metrorail an exclusive concession to provide services for a maximum period of five years. After this, the entire commuter rail network will be opened to competitive tendering. Metrorail's exclusive concession agreement is scheduled to come into effect on 1st April 1999.
A demonstration project will see about 10% of the existing commuter rail network offered to a private operator on a competitive basis. This project will put the concessioning concept into practice. The SARCC, in consultation with labour unions and other stakeholders, will identify a demonstration area and select the concessionaire in order to kick-start this project in the year 2000.
SARCC has begun a drive to improve the condition of its rolling stock. The ageing and unreliable rolling stock fleet has been identified as one of the main causes negatively affecting the efficiency and safety of the service. An in-depth study by international experts has revealed that in order to sustain the commuter rail business in this country, we have to embark on a massive recapitalisation exercise. The Corporation has thus embarked on a programme to upgrade the existing rolling stock fleet and to purchase new coaches. Tenders to provide the first 60 new trailer and motor coaches were issued in 1998, and the Corporation will appoint a contractor by June 1999. Delivery of the first trains is expected in the year 2001.
The plan is to continually buy new coaches while upgrading old ones, eventually achieving a scenario in which, in about 40 year's time, the SARCC will have replaced all of its 4 500 suburban coaches. This includes the refurbishing of about half of the existing coaches, thereby extending their lives by 15 to 20 years at a cost of about 20 percent of that of a new coach.
Intersite aims to realise both the latent and patent value in the SARCC's property portfolio so as to increase long term recurring income for the Corporation. It will use these property assets to support government's socio-economic policies and transformation processes.
Intersite will facilitate and maximise private sector participation in the property portfolio. It will promote the principle of integrated land use and transportation planning to ensure greater inter-modality and corridor densification, thus contributing to the objectives of Moving South Africa.
Commuter rail property assets play a significant role in concessioning and Intersite will ensure the smooth and co-operative implementation of the property management aspect of concessioning.
In preparing a financial plan for the following 3 years, a few important assumptions have been made:
Metrorail expenditure will increase at a rate of 7% p.a., while savings to the amount of R200m will be effected during 1999/2000, with further savings of R100m during 2000/2001. These savings will result in a decrease in Metrorail expenditure over the following 2 years in actual terms.
The above figures reflect only the financing effects of additional borrowings to fund capital expenditure, but not the additional loans required. The Corporation, in co-operation with government, will have to urgently seek creative solutions to the current tension between annual capital expenditure needs and the inherited burden of borrowings.
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