Report Coverage
This report focuses on freight and passenger rail transport and the manufacture of railway locomotives and rolling stock and includes information on the size and state of the industry, revenues, volumes, transport costs, investment and expansion and turnaround plans. There are profiles of 27 companies including major state-owned players such as PRASA and Transnet, whose businesses include Transnet Freight Rail and Transnet Engineering, Gautrain operator Bombela and locomotives and rolling stock manufacturers such as Alstom and Gibela.
Introduction
• The rail industry has been plagued by ageing infrastructure and governance issues.\r\n
• Companies continue to shift the transport of goods to road as the rail system becomes increasingly unreliable. \r\n
• The plan to open the rail network to private participation has failed to gain traction, with only one successful bidder to date. \r\n
• Theft and vandalism of rail infrastructure remains rampant and locomotive availability is a major issue.\r\n
• The state-owned Passenger Rail Agency of South Africa (PRASA) and Transnet Freight Rail (TFR) are lossmaking and have been involved in procurement irregularities and irregular, fruitless and wasteful expenditure and poor governance.
Strengths
• Financial and policy support from government in the form of the PRASA rolling stock renewal and support programmes, Gautrain network expansion project and Transnet capital planned expenditure.
• High levels of investment in the sector.
• Local and international manufacturers of all sizes active in the domestic market.
• Lower environmental impact compared to road transport.
• Rail is on average 33% cheaper than road transport, especially for distances greater than 500km.
• The establishment of manufacturing facilities to fulfil Transnet and PRASA acquisition contracts.
Weaknesses
• Original equipment manufacturers’ challenges associated with meeting the localisation requirements of the acquisition programmes.
• Critical skills shortages at all levels resulting in inefficiencies, increased accident rates and poor service delivery.
• Declining performance of the manufacturing and mining sectors.
• Management instability and governance and supply chain issues at PRASA and TFR.
• Old and outdated infrastructure and inability to combat theft and vandalism.
• Split responsibility for freight rail under the Department of Public Enterprises and passenger rail under the Department of Transport.
• Underdeveloped rolling stock value chain.
Opportunities
• Partnerships to explore alternative ownership and financial models for wagons, sidings and branch lines.
• Additional back-of-port rail facilities to improve use of terminal facilities.
• Development of collaborative intermodal transport systems and collaboration with customers and industries to implement supply chain solutions.
• Infrastructure and capital expansion projects will create demand for transportation of imported machinery and equipment.
• Infrastructure programmes could increase capacity leading to increased passenger and freight volumes.
• Integration of local rolling stock suppliers into global original equipment manufacturer value chains and empowerment partnerships as a result of the capital expansion projects.
• Investment in rail network and infrastructure projects on the African continent will increase the demand for locomotives and rolling stock.
• Localisation requirements and focus on supplier development should create a sustainable chain of manufacturers and suppliers.
• Mining companies purchasing or leasing rolling stock.
• Open access to the rail network for private sector investment should enhance competitiveness and promote efficiency.
• Proposed transport economic regulator will set prices, provide regulated third-party access to rail network, improve competition and lower costs to business.
• Rolling stock overhauls and upgrades in Africa.
• Strengthen operational relationships with neighbouring countries to increase volumes and facilitate regional integration.
• The devolution of metropolitan passenger services to local authorities.
• The maintenance of newly procured rolling stock and locomotives will provide opportunities once warranties expire.
• Weak rand increases value of exported commodities thereby increasing volumes.
Threats
• A decrease in rail freight and passenger volumes and revenues due to operational inefficiencies and deteriorating infrastructure.
• Actions of competitors in public transport when rail services recover and market grows.
• Alleged procurement irregularities and corruption.
• Extensive rail and port infrastructure projects on the African continent could divert freight away from South Africa.
• High unemployment reduces the number of passengers travelling to and from work.
• Inability to manufacture stock within the lead times.
• Increasing competition from road freight and passenger transport.
• Increasing electricity and steel costs, high inflation and wage increases.
• Political unrest.
• Rising labour, diesel and electricity costs and implementation of carbon tax.
• Severely constrained global supply chains that impact rolling stock renewal, re-signalling programmes, and procurement of equipment and commodities.
• Theft and vandalism of infrastructure and illegal encroachment onto rail land and reserves.
• Weak economic growth, leading to lower production, less freight to transport, lower investment in expansion, and reduced demand for additional rolling stock for freight.
• Worsening economy and rand will increase imported rolling stock and components costs while high interest rates will affect the cost of borrowing.
Outlook
• Theft and vandalism of rail infrastructure has left many commuters stranded. \r\n
• Passenger numbers are under pressure although there is slight growth on lines operated with new train sets. \r\n
• PRASA is revitalising stations and lines and developed a short-term plan to improve the limited service, a medium-term plan that focuses on the rebuilding of infrastructure, and a long-term plan focused on modernisation.\r\n
• The plan to include private sector players has largely failed to materialise and is severely impacting government’s plan to migrate road freight to rail. \r\n
• The plan recognises that TFR is operationally and financially broken, there has been widespread corruption and wasteful and irregular expenditure and it neglected the maintenance of its rail infrastructure because of state capture and widespread theft and vandalism. \r\n
• Trains often face delays in moving goods. \r\n
• TFR has a capital investment shortfall of R80bn over the next five years to restore its operations, as it is in a crisis of falling volumes and revenue and does not have the capital to invest in its network and capital equipment.
Full Report
R 9 500.00(ZAR) estimated $538.72 (USD)*
Industry Landscape
R 6 650.00(ZAR) estimated $ 377.10 (USD)*
Historical Reports
Railway Transport and Manufacture of Locomotives and Rolling Stock Industry in South Africa 2021-03-12
R 1 900.00(ZAR) estimated $107.74 (USD)*
View Report Add to CartRailway Transport and Manufacture of Locomotives and Rolling Stock Industry in South Africa 2019-08-22
R 1 900.00(ZAR) estimated $107.74 (USD)*
View Report Add to CartRailway Transport and Manufacture of Locomotives and Rolling Stock Industry in South Africa 2017-07-28
R 1 900.00(ZAR) estimated $107.74 (USD)*
View Report Add to CartRailway Transport and Manufacture of Locomotives and Rolling Stock Industry in South Africa 2017-02-23
R 1 900.00(ZAR) estimated $107.74 (USD)*
View Report Add to CartRailway Transport and Manufacture of Locomotives and Rolling Stock Industry in South Africa 2015-10-27
R 1 900.00(ZAR) estimated $107.74 (USD)*
View Report Add to CartRailway Transport and Manufacture of Locomotives and Rolling Stock Industry in South Africa 2014-10-08
R 1 900.00(ZAR) estimated $107.74 (USD)*
View Report Add to CartTable of Contents
[ Close ]PAGE | ||
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1. | INTRODUCTION | 1 |
2. | DESCRIPTION OF THE INDUSTRY | 1 |
2.1. | Industry Value Chain | 11 |
2.2. | Geographic Position | 15 |
2.3. | Size of the Industry | 16 |
3. | LOCAL | 28 |
3.1. | State of the Industry | 28 |
3.2. | Key Trends | 40 |
3.3. | Key Issues | 40 |
3.4. | Notable Players | 41 |
3.5. | Corporate Actions | 44 |
3.6. | Regulations | 45 |
3.7. | Enterprise Development and Social Development | 50 |
4. | AFRICA | 51 |
5. | INTERNATIONAL | 58 |
6. | INFLUENCING FACTORS | 64 |
6.1. | Unforeseen Events | 64 |
6.2. | Economic Environment | 65 |
6.3. | Environmental Issues | 68 |
6.4. | Technology, R&D, Innovation | 70 |
6.5. | Government Support | 72 |
6.6. | Operating and Input Costs | 73 |
6.7. | Safety and Security | 74 |
6.8. | Investment in Rolling Stock and Rail Infrastructure | 77 |
6.9. | Localisation and Supplier Development Programmes | 82 |
6.10. | Private Sector Open Access and Concessions | 85 |
6.11. | Governance and Supply Chain Issues | 87 |
6.12. | Mining Sector Issues | 89 |
6.13. | Cyclicality | 90 |
7. | COMPETITIVE ENVIRONMENT | 91 |
7.1. | Competition | 91 |
7.2. | Ownership Structure of the Industry | 92 |
7.3. | Barriers to Entry | 93 |
8. | SWOT ANALYSIS | 94 |
9. | OUTLOOK | 96 |
10. | INDUSTRY ASSOCIATIONS | 97 |
11. | REFERENCES | 97 |
11.1. | Publications | 97 |
11.2. | Websites | 99 |
APPENDIX 1 | 101 | |
Summary of Notable Players | 101 | |
COMPANY PROFILES | 110 | |
ABB South Africa (Pty) Ltd | 110 | |
ACTOM (Pty) Ltd | 113 | |
African Rail and Traction Services (Pty) Ltd | 121 | |
ALSTOM Rolling Stock SA (Pty) Ltd | 122 | |
ALSTOM Ubunye (Pty) Ltd | 124 | |
Bombela Operating Company (Pty) Ltd | 126 | |
Denel Vehicle Systems (Pty) Ltd | 128 | |
Galison Manufacturing (Pty) Ltd | 130 | |
Gibela Rail Transport Consortium (RF) (Pty) Ltd | 132 | |
Global Railway Engineering (Pty) Ltd | 134 | |
Ikusasa Rail (Pty) Ltd | 136 | |
Knorr-Bremse (South Africa) (Pty) Ltd | 138 | |
Lucchini South Africa (Pty) Ltd | 140 | |
Passenger Rail Agency of South Africa | 142 | |
Progress Rail SA (Pty) Ltd | 146 | |
R and H Rail (Pty) Ltd | 148 | |
SAFreight Logistics (Pty) Ltd | 150 | |
Siemens (Pty) Ltd | 152 | |
Siyahamba Engineering (Pty) Ltd | 156 | |
Swasap (Pty) Ltd | 158 | |
Thelo DB (Pty) Ltd | 160 | |
TMH Africa (Pty) Ltd | 162 | |
Transnet SOC Ltd | 163 | |
Traxtion Sheltam (Pty) Ltd | 168 | |
Trident South Africa (Pty) Ltd | 171 | |
Versa Rail (Pty) Ltd | 173 | |
Wabtec South Africa Technologies (Pty) Ltd | 175 |