In the loop

Transnet looks to Swazi­land

Finweek English Edition - - INSIGHT - JAMES-BRENT STYAN

TRANSNET WILL COM­PLETE a new rail­way line within the next two to three years that will cross Swazi­land. The line – about 70km long – will be­come a “side track” to loop all gen­eral freight through Swazi­land and free the line from Ermelo in Mpumalanga to move coal on the ex­ist­ing coal ex­port rail­way line to Richards Bay. Transnet CEO Brian Molefe says the plan might well make it pos­si­ble for the pub­lic util­ity to in­crease ca­pac­ity on its coal ex­port cor­ri­dor to around 95m tonnes/year.

The cur­rent ca­pac­ity of ex­ports at the Richard Bay Coal Ter­mi­nal (RBCT) is 91m tonnes/year but Transnet is only de­liv­er­ing around 62m tonnes/year, due to a num­ber of dif­fer­ent chal­lenges – the chief ones be­ing age­ing in­fra­struc­ture, over­head power cable theft and out­dated tech­nol­ogy. Transnet Freight Rail’s (TFR) age­ing and mainly un­re­li­able lo­co­mo­tive fleet is an­other prob­lem. Over the next five years Transnet will spend R23bn on new lo­co­mo­tives, which in­cludes 110 Class 19E dual-volt­age lo­co­mo­tives to be used mainly on the coal ex­port line.

With re­gard to the pro­posed plan, Molefe says re­cently reap­pointed TFR head Siyabonga Gama is al­ready work­ing with Swazi­land’s rail­way authorities to de­ter­mine the best way for­ward to de­velop the new loop line. Gama says Swazi­rail has told him it may be pos­si­ble to fi­nance the pro­posed pro­ject with funds sourced from de­vel­op­ment bank­ing in­sti­tu­tions based in Wash­ing­ton, such as the World Bank and the In­ter­na­tional Mon­e­tary Fund.

The pro­posed loop is likely to run from Ermelo into Swazi­land to­wards Mba­bane and then to Mthatha, be­fore end­ing at Richards Bay. Molefe says the plan is to send all gen­eral freight via the pro­posed Swazi­land route. “That will then free up the equiv­a­lent space on the Richards Bay line for just coal.”

Transnet plans to move 70m tonnes of coal along the ex­ist­ing rail net­work in its cur­rent fi­nan­cial year. An in­crease in coal rail ca­pac­ity to lev­els of 95m tonnes/year will be well re­ceived by SA’s coal min­ing in­dus­try and could prompt new in­vest­ment in such mines.

Gama says more in­vest­ment is crit­i­cal, es­pe­cially with re­gard to in­creas­ing ca­pac­ity from the coal-rich Water­berg, north of Pre­to­ria – SA’s largest un­tapped coal re­source. A num­ber of min­ing groups – in­clud­ing An­glo Amer­i­can – are al­ready in­volved in de­vel­op­ments in the area. Gama says the con­straints down the line need to be fixed first.

“With the bot­tle­neck hit­ting Transnet at Ermelo to Richards Bay, it wouldn’t make sense to in­vest in new ca­pac­ity in the Water­berg be­fore we sort out the con­straints on the cor­ri­dor from Ermelo.” Gama says Transnet aims to start adding ad­di­tional rail ca­pac­ity in the Water­berg re­gion around five years from now.

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