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Joint statement Transnet and Traxtion Sheltam

by | Oct 23, 2023 | In The Media

Transnet Freight Rail (TFR) and Traxtion Sheltam (Pty) Ltd (Traxtion Sheltam) have both agreed to the cancellation of the conditional award of slots between Kroonstad and East London on the Cape Corridor.

As part of the process leading to the implementation of the National Rail Policy (NRP), TFR initiated a project to sell slots on its rail network where excess capacity was available under Phase 1 of the initiatives to open access to third parties. On 1 April 2022, TFR advertised slots on the Container and Cape Corridors through a competitive open market process.

On 25 November 2022, TFR announced the conditional award of slots to Traxtion Sheltam subject to the completion of the application process, including the fulfillment of all condition’s precedent before the planned start date of 1 April 2023.

The Phase 1 slots sale process was to explicitly serve the purpose of gathering insights and learnings that would inform the future implementation of third-party open access regime on TFR’s rail network in line with the NRP and other regulatory reform initiatives.

The negotiation phase was protracted due to the inherent complexity of the contract negotiations, design of the required service, interface with municipal owned rail network on the chosen customer access route, unpacking the impact of the Employers Association / Bargaining Council, as well as the commercial reality of the service offering to the eventual customer/s.

Given the above scenario and the reform work that the Department of Transport (DOT), and the Interim Rail Economic Regulator Capacity (IRERC) have embarked on and which informs Phase 2 of third-party open access regime, TFR and Traxtion Sheltam have jointly agreed to terminate the current slots awarded under Phase 1.

TFR and Traxtion Sheltam jointly recognise the increased speed of the Government’s Rail Reform agenda and acknowledge that the Government’s Rail Reform process will establish the Infrastructure Owners, Infrastructure Managers and Operators’ rights and obligations within an independent legislated framework, and it would be beneficial to align as soon as possible with those principles, requirements, and objectives. The 2-year pilot project, for example, had certain investment limitations that may have hampered rail development along the East London railway corridor and will be addressed in Phase 2 of the third-party open access regime.

TFR and Traxtion Sheltam gained great learnings through engagements on this initial Phase 1 slots sale process which both parties will use in the roll out of third-party access. Traxtion Sheltam is looking forward to participating in Phase 2 of the implementation of the third-party access and the realization of rail reform in South Africa.

Transnet is continuing to engage with all relevant stakeholders on third-party access where appropriate, aligning with the work that the DOT continues to undertake towards the implementation of the NRP.

Issued jointly on behalf of Transnet Freight Rail and Traxtion Sheltam.