Port of Gauteng developer Francois Nortjé says the expiry of the 30-year N3 concession in 2029 will pave the way to restructure highway tolls so that the rail corridor gets a cut of the money, which would improve freight efficiency.
Nortjé, who hopes that when complete the R50bn Port of Gauteng logistics hub will result in a one-third reduction in road freight on the Durban-Johannesburg route, said N3 tolls should cross-subsidise the Transnet Rail Infrastructure Manager (TRIM).
He said a new class of tolls for the trucking industry was needed that would help to fund rail freight — and possibly pay for an additional line in each direction on the corridor to meet future demand.
Achieving cheaper logistics on the route and reducing congestion on the N3 had to be subsidised, “either by the taxpayer or the corridor user, there is nobody else who can do it”.
The N3 toll concession is owned by the Public Investment Corp and Old Mutual alongside smaller fund managers. It was granted in 1999.
“There are many more trucks than there used to be,” Nortjé said. This is mainly because of the dire straits into which Transnet Freight Rail plunged about a decade ago.
The Port of Gauteng, due to begin operations in 2027, will be built in south-eastern Johannesburg on the railway line to Durban. Nortjé envisages it will employ 50,000 people.
The facility will have “world-class” technology, including direct train-to-truck transfers, to enable rapid, high-volume throughput. It is being developed by NT55 Investments, which aims to transform both inland trade and exports.
Nortjé said the logistics hub would be able to guarantee a three-hour turnaround for trains.
Prof Jan Havenga of Stellenbosch University, a specialist in logistics, said the government should long ago have planned for “freight villages” — logistics centres where goods are collected, handled and distributed using road, rail and/or air.
“We should have had a number of freight villages by now, but the department of transport failed to provide a planning framework and that is a big problem. Now we have people from the private sector pushing it.”
Havenga cited the Cato Ridge Inland Port, the Musina Intermodal Terminal and the Cape Winelands Port as examples of the trend.
“The type of facility the Port of Gauteng is developing is important,” he said, but expressed concern at the lack of a central, national plan. “We need a zoning plan that says ‘this is what we need for our country’.”
But in the absence of such a plan, “I think this is a very good initiative”.
[It] may well provide the missing link that can make rail competitive again
— Gavin Kelly, CEO of the Road Freight Association
Gavin Kelly, CEO of the Road Freight Association, welcomed plans for the Port of Gauteng, saying it represented collaboration between rail and road. “[It] may well provide the missing link that can make rail competitive again,” he said.
Grain South Africa CEO Tobias Doyer said the port offered vital relief and arrived “at a critical time when the agricultural logistics system is under severe strain”. Maize exports, which now travel by truck to the ports, would be far cheaper if sent by rail.
The 550km N3 highway between Johannesburg and Durban trumps the 690km rail corridor in terms of competitiveness following years of underinvestment, said Nortjé.
He said less than 14% of freight traffic between Durban and Johannesburg went by rail, compared with the 50% target in the National Development Plan.
Nortjé said one way to reduce transport costs was to boost adoption of performance-based standard (PBS) trucks. Such trucks, according to logistics company Unitrans, are heavy vehicles “designed on how they perform against a set of safety standards, rather than how they look.”
The best PBS vehicles “can typically achieve an additional 30% payload. This payload increase translates to a reduction of total vehicles, road damage, CO² emissions and lower overall running costs”,“ Unitrans says.
Nortjé proposed tolling PBS trucks to generate more revenue, which would be allocated to the rail service.
“Let us toll them a bit more ... The problem is, if you toll trucks too much, they drive on the provincial road to bypass the toll.
“Luckily these PBS trucks require an abnormal-load permit to operate. So, you can give them the permit to say ‘you have to stay on the N3, you will get off the road at the yard where you want to drop off’. Then you can get more tolls out of the PBS trucks.”
Nortjé said PBS trucks, which can carry two 12m containers, were affiliated to the Road Transport Management System, a self-regulation initiative that ensures long-haul trucks adhere to road traffic regulations.
On the other hand, “unscrupulous” operators ran trucks that were unregulated and cut corners to offer cheaper rates, which harmed rail’s econominc competitiveness.
“They don’t belong to the bargaining council [and] use cheap labour and don’t do all the maintenance and they overload,” Nortjé said.
He said PBS tolling should only come in when the issue of unscrupulous operators had been addressed. “It is a holistic approach, an ecosystem. All our recommendations outlined in our white paper need to be implemented for the challenges to be resolved.”
The Port of Gauteng released its white paper in September, calling for a “managed balance between PBS trucks and rail”. It noted that cargo had moved from rail to road. “The result is a freight system that is costly, congested, inefficient and unsustainable.”
It said the entry of foreign online retailers such as Shein, Temu and Amazon, and the shift to Asian car brands instead of luxury European marques, had changed the logistics picture.
“Shein, Temu and Amazon currently fly most of their sales into South Africa; as their volumes scale, they will increasingly switch to container shipping, meaning that new traffic will move up the Durban-Gauteng freight corridor. This will place additional strain on the corridor,” said the white paper.
TRIM told Business Times in response to questions about cross-subsidising rail with toll fees: “Toll fees on the N3 corridor fall under the jurisdiction of the South African National Roads Agency and the department of transport ... Any determination on tolling policy or cross-subsidisation between modes of transport would therefore need to be considered by the department.
“TRIM continues to engage with relevant government departments and stakeholders to secure increased and sustainable funding to support the maintenance, safety, security and operational improvement of South Africa’s rail network. Strengthening rail infrastructure across key freight corridors will enable improved performance for all licensed train operating companies and help increase national rail freight volumes, contributing to a more balanced and efficient logistics system.”
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