Passenger R
of South Afr
Keeping you Connec

Rail Agency
rica (PRASA)

          South Africa’s railway sector has been in dire need of upgrade for
          several years. However over the last five years, the industry has been
          seeing an influx of investment and has become a focal point for
          the government who is now putting South Africa’s railways within
          its top priorities. Passenger Rail Agency of South Africa is one of
          the organisations that has been leading some of the most recent
          developments in the commuter rail and transport sector, and its
          recent multi-billion dollar tender is gearing up to get underway.
JUNE 2013 • The African Business Journal                   5

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      “To be quite frank, it has been a long time. Over three decades of under investment in the rail
      industry and it has gone through a considerable decline, which has been problematic for us.” -
      Piet Sebola, group executive of Strategic Asset Development with PRASA.

    artist’s rendering of PRASA’s new passenger trains. These sleek modern machines will be built by
    Gibela rail transport consortium.

Historically, road and rail based passenger                   As such, in 2006 the National Rail Plan was
services in South Africa were provided by the            approved by Cabinet with the goal of identifying
South African Transport Services (SATS), a state-        the funding and investment requirements for
owned entity. But from April 1990 onwards, these         the country’s ageing passenger rail, especially in
functions became the responsibility of Transnet          light of the quickly approaching global event that
Limited and the South African Rail Commuter              would be arriving on South Africa’s doorstep in
Corporation Limited (SARCC), with the former re-         2010, the FIFA World Cup.
sponsible for long-distance road and rail passen-             At the forefront of the government’s efforts
ger services and the latter taking care of com-          to transform public transport in South Africa, in
muter rail services. Over the years new divisions        2009 the Passenger Rail Agency of South Africa
and subsidiaries were formed to manage dif-              (PRASA) was born, consolidating all of the passen-
ferent areas of the sector, but the lack of clarity      ger rail entities to better manage and aggressively
between the groups led to issues that ultimately         address the under-performance of rail passenger
impacted the maintenance of the railways.                services into something more modern, efficient and
JUNE 2013 • The African Business Journal   7

customer-focused as well as champion some much      developments in the works, the railway is poised
needed investment in the sector.                    for some serious growth.
    “To be quite frank, it has been a long time.
Over three decades of under investment in the       Company Structure
rail industry and it has gone through a consider-   Operating within six mega-cities across the country,
able decline, which has been problematic for us,”   today PRASA manages over 374 stations and trans-
says Piet Sebola, group executive of Strategic      ports over 2.2 million passengers daily through its
Asset Development with PRASA.                       local metropolitan line, and 1.4 million passengers
    He explains that other than some new trains     per annum through its main line passenger service.
that were brought on in the mid-80s, much of the        The organisation consists of three divisions
technology in South Africa’s railways have been     and two subsidiaries. The divisions are split
there since the 1950s.                              between: a) PRASA Rail Operations, which is the
    However, with major focus now coming            rail operating division that manages commuter
from the government, as well as several new         rail services in urban metropolitan areas under
JUNE 2013 • The African Business Journal                      9

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Metrorail, as well as long-distance inter-city and                      generate revenue for the group.
cross border train services under Shosholza
Meyl; b) PRASA Corporate Real Estate Solutions,                         Under Development
which manages PRASA’s property portfolio and                            PRASA says its critical objective over the next
station upgrades and improvement programme;                             few years is to modernise the existing passenger
as well as c) PRASA Technical, which is respon-                         railway system in order to meet the challenges of
sible for managing the company’s rolling stock                          a contemporary society. This means implement-
depots as well as the engineers who provide                             ing plans for the modernisation of the signalling,
maintenance for the trains.                                             telecommunications systems, stations, security,
    The company also has two subsidiaries,                              rolling stock and train operating systems.
including Autopax, which provides long-distance                               In fact it’s these projects that have much of the
bus services from city-to-city, as well as Intersite                    industry across South Africa, and abroad, anticipat-
Investments, which is responsible for develop-                          ing with excitement for what’s to come. In a sector
ing and growing the assets portfolio of PRASA to                        that has gone through a drought of investment and

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                                                           “We weren’t just looking for a bid
                                                           for a modern train, but a partner
                                                           who could journey with us on an
                                                           economic development side of
                                                           things. We wanted someone to
                                                           come with a local factory, we wanted
                                                           somebody who could contribute a
                                                           high level of local content and, of
                                                           course, we wanted somebody who
                                                           could give us a much better price
                                                           and we believe Gibela Rail Transport
                                                           Consortium showed that.”

JUNE 2013 • The African Business Journal      11


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innovation for almost 30 years, these recent ten-            company Actom, won the contract of R51 billion to
ders PRASA has been releasing over the past two              supply 3,600 vehicles and create 8,088 jobs over a
years has caught the attention of operators, manu-           10 year period starting from 2015.
facturers and suppliers from across the globe,                   Gibela was one of seven bidders vying for
eager to tap into Africa’s growth story.                     the ambitious project, and Sebola says they are
    Some of the greatest buzz is around the                  currently in the process of negotiating the finer
railway operator is its R123 billion rolling stock           details of the contract, including working to pro-
renewal fleet programme, a 20 year investment                cure a suitable BE partner, with everything to be
strategy to replace PRASA’s existing fleet and               finalised by end of July 2013.
allow for expansion to accommodate growth and                    “We weren’t just looking for a bid for a mod-
planned extensions to the PRASA network.                     ern train, but a partner who could journey with
    In December 2012, PRASA announced that                   us on an economic development side of things,”
the Gibela Rail Transport Consortium, consisting of          explains Sebola, when asked about why PRASA
French multinational Alstom and local engineering            granted the contract to Gibela. “We wanted

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someone to come with a local factory, we wanted                                                                                will initially provide communications between
somebody who could contribute a high level of lo-                                                                              drivers and control centres, as well as eventually
cal content and, of course, we wanted somebody                                                                                 offering automatic train protection functionality.
who could give us a much better price and we                                                                                         “There’s a lot of work ahead of us. We’re not
believe Gibela showed that.”                                                                                                   going to change the railway overnight. It’s going to
        In March, PRASA also signed a R450 million                                                                             take it’s time, but we have to make sure the build-
contract with Chinese information and technol-                                                                                 ing blocks are in place to ensure we achieve our
ogy giant Huawei for a new digital signalling radio                                                                            main objective, which is to put rail in the centre of
system for its train communication and manage-                                                                                 public transportation in this country,” says Sebola.
ment that meets the necessary modern safety
requirements, replacing its current radio system                                                                               Future Vision
that has proved to be inefficient.                                                                                             South Africa’s rail industry is one of many investment
        According to reports, this new system will                                                                             stories coming out of the continent and in June,
have a 1,200 kilometre fiber optic backbone and                                                                                PRASA, along with representatives from various
JUNE 2013 • The African Business Journal    13

                                                    integration across borders to not only make it
                                                    more efficient for commuters to travel between
                                                    countries, but to boost intra-African trade.
                                                        “In 20 years’ time, we will not have a reason
                                                    why Africa can’t have high-speed integration rail-
                                                    way system. Why can’t South Africa connect with
                                                    other parts of Africa’s railway? We don’t have an
                                                    excuse for that,” he says.
                                                        However, prior to getting there, Sebola recog-
                                                    nises that South Africa and other growing econo-
                                                    mies, like Nigeria, Zimbabwe and Kenya, will
                                                    have to see some maturity in their rail sectors

   ARTIST’S RENDERING OF THE INTERIORS OF THE NEW   with “commuter rail taking a centre stage,” and
                                                    events like Africa Transport and Infrastructure
                                                    Show are an important step in getting the right
other rail operators across the continent like      conversations happening to achieve those goals.
Mozambique’s CFM, Tanzania’s TAZARA and                 “We’re going to work very hard in the next
Nigerian Railways, will be coming together at the   five to 10 years and we want to see changes
16th annual Africa Transport and Infrastructure     and offer service excellence,” says Sebola.
Show in Johannesburg to network and share lessons   “Our cities will not survive with inefficient pub-
learned over the years.                             lic transportation. We want people to be able
    “We always look forward to the Africa Rail.     to predict their travel time and make sure that
It’s a time when Africa can connect and we can      rail is facilitating the movement of people as
say ‘this is what is going on in South Africa,      efficiently as possible in a cost-effective way.
what’s going on in the rest of Africa?’ That’s      It’s going to take a lot of work to make sure it
always important from an operator point of view     becomes a reality, but we want rail to take cen-
and from an investor point of view,” says Sebola.   tre stage from a transport perspective.” TAB
    What he hopes is a major part of the discus-
sion is talking about how Africa can achieve rail


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