18 November 2012

South Africa: Can the ANC Government Keep Our Trains Rolling?

press release

The R40 billion funding commitment and affordability limit for a new fleet of trains for the Passenger Rail Agency of South Africa (PRASA) is far too little to provide for the number of trains which must be manufactured.

The cost of the 7 226 units of rolling stock needed for the recapitalisation of PRASA's new fleet is R123 billion, to be rolled out over the next 18 years. Thus far, seven bids have been submitted and received by PRASA from companies wishing to manufacture the infrastructure.

However, PRASA CEO Lucky Montana told the Transport Portfolio Committee in October that Treasury has capped bids for the first 10 years of the roll-out programme at R40 billion, amounting to only R4 billion per annum.

Finance Minister Pravin Gordhan had apparently set the R40 billion limit in February 2012, but this fact was only recently revealed in PRASA's report to the Transport Portfolio Committee.

These figures just don't add up. R40 billion over 10 years still leaves R83 billion for the remaining eight years. It will be impossible to deliver the bulk of the contract in such a short period of time.

Treasury's decision seems to mean one of two things: there will either be fewer trains or the delivery time (and thus the wait for commuters to use these services) - will be longer. Either way it is not good news for commuters, especially in Cape Town where more than 60% of the city's residents rely on train services for their daily transportation needs.

This constraint imposed by Treasury shows that the policy approach of state-owned lines and state-owned rolling stock must be reviewed urgently. The ANC seems to be making commitments that government cannot afford and this is a clear example.

Treasury needs to fund massive infrastructure investments such as these by getting the private sector on board; otherwise we simply cannot afford the ANC government's state-led infrastructure drive.

I will be posing parliamentary questions to Ministers Ben Martins and Pravin Gordhan in this regard.

South Africa's commuters should not have to bear the brunt of the omnishambles government has made of the economy.

Ian Ollis, DA Spokesperson on Transport.

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