The government’s plan to attract nearly R2-trillion in new investments to overhaul the country’s rail network is facing a skills challenge. The exodus of highly skilled personnel in the sector, with those remaining advanced in age; is worsened by a small talent pool emerging.
“Historically, the railway served as both a significant employer in South Africa and a vocational training institution for many of the country’s artisanal and engineering specialisations. Recent years have witnessed a substantial exodus of skilled personnel from the railway sector,” said the department of transport’s draft “National Rail Master Plan” released this week for public comment.
“While some expertise remains within the system, the skills gap is pronounced and presents considerable challenges for restoration. Given the broader decline in rail-related skills across the sector, it is not appropriate to rely solely on individual rail operators to fulfil the full skills development mandate while also competing with other transport modes and managing commercial pressures.”
The draft plan, which eyes R1.9-trillion in investment in the rail network over the next decade, calls on the government to play a role in co-ordinating sectorwide skills development initiatives. These include the establishment of rail centres of excellence and strategic partnerships with universities, technical and vocational education and training (TVET) colleges, and sector education and training authorities (SETAs).
The plan also calls for structured training programmes linked to rail reform and investment initiatives to increase the talent pool in the sector.
While some expertise remains within the system, the skills gap is pronounced and presents considerable challenges for restoration.
— National Rail Master Plan draft
Engineering, signalling, train control systems, traction systems, rolling stock maintenance, rail operations, safety management, economic regulation, and digital systems are among the scarce skills desperately needed.
“A further challenge is the ageing profile of the rail workforce. Many experienced technical specialists are approaching retirement age, while younger professionals are not entering the sector in sufficient numbers. This is particularly evident in artisan trades such as welding, fitting and turning, boiler making, electrical systems, diesel mechanics, overhead traction systems and track maintenance,” the master plan notes.
South Africa is home to a 23,540km rail network. However, the master plan shows that about 40% of the network has no likely or limited economic or socioeconomic utility, while 20% consists of ring-fenced systems (mainly export coal and iron ore) that should be considered separately from general rail discussions.
“Of the remaining 40%, half could form a core backbone accommodating multiple operators and supply chains between major settlements, with the other half serving as dedicated feeder rail systems, which contribute to local solutions while supporting the core network.”
One of the challenges that the sector has faced over the years has been the unbalanced approach to rail development. And because railway investments are expensive and the effects long-lasting, this has hampered the country’s competitiveness.
Transnet has set a lofty target of increasing its freight rail handling capacity to 250-million tonnes annually by 2030 — up from the current 170-million tonnes.
Challenges that have beset the system over the past decade are laid bare in the official data, which shows freight rail volumes declined from 226-million tonnes in 2017/18 to just over 150-million tonnes in 2022/23.
As a result, South Africa failed to capitalise on various commodity price booms in mining exports. This has turned the pressure up on the government to speed up reform in the logistics sector, with private sector players set to play a pronounced role through concessions.
The latest “Where to Invest in Africa” report, produced by corporate finance major Rand Merchant Bank (RMB), found that South Africa has the largest untapped export potential of any country in Africa. If exploited, it could add as much as $75bn (about R1.3-trillion) in annual exports in the next five years.
“The present South African rail network is a product of decades of stunted infrastructure development and self-inflicted operational complexities. It seeks operational efficiency in the face of significant challenges due to an evolving economy, shifting demand, and the need for modernisation,” the draft master plan read.
“The diversity of different types of lines, varied asset classifications, and operational conditions is purported to provide flexibility, but in reality adds complexity, adding impediments to the rail system in its quest to compete effectively with road transport. Additionally, the financial burden on rail is exacerbated by the structural imbalance between rail and road.”
The Barbara Creecy-led department believes that the restoration of the rail system will enable a modal shift of at least 60-million tonnes of freight from road to rail, saving South African businesses an estimated R26.6bn per annum in direct logistics costs.
Business Times
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