JOSHUA NOTT: Urgent measures needed for getting back on track
The railroad is the most powerful single indicator of self-sustained economic growth for any country anywhere. So opined WW Rostow in The Stages of Economic Growth.
It is a prerequisite for a rapidly expanding export sector, and it was in his words “decisive” in the US path to economic supremacy. He was not wrong. Economic papers on the subject of railway expansion and its connection to economic growth could fill a freight car.
If moving tonnes of haulage (people or goods) by rail is a necessary condition for prosperity, the derailing of this infrastructure is nothing but a drag. Derailment unfortunately characterises the state of both the UK and SA rail networks.
According to Oxford Economics the UK railway sector supported £42.9bn (more than R1-trillion) in economic production in 2019 and about 710,000 jobs. Much of its revenue is passenger generated. However, as passenger numbers were returning to pre-pandemic levels the UK’s winter of discontent set in, with rising energy prices and a cost of living crisis.
Out of necessity, union members got off the rail lines and onto the picket lines. Up to January, strikes have cost the country a cool £1bn. Commuters have either stayed home or taken twice as long to get anywhere. Productivity losses are likely to increase the total cost figure.
As if stalled union talks were not bad enough, the UK’s high-speed railway project (HS2) has transformed from flagship to headache. The project was initially conceived to link London to Manchester and Leeds via Birmingham (its scope has since been reduced). Delays and spiralling costs (£33bn a decade ago, to £100bn today) continue to beset its progress.
Yet the need for the new network remains real. Connecting the industrial north to the services-orientated south is a necessity both in political and economic terms. We will just have to wait until 2041 to see the project realised.
A different set of problems bedevils the SA rail sector. For one thing, the domestic rail network is relied on more for its export facilitation. Chronic underinvestment and lacklustre attempts at maintenance, chronic line faults and copper theft have left our locomotives paralysed.
The inability to haul goods to the port system stifles the country’s capacity to export, which is all the more concerning as demand for our natural resources remains high. According to The Economist in 2022 SA’s coal exports slumped to their lowest level since 1993, due in large part to Transnet’s main coal line carrying 54-million tonnes, compared to a potential capacity of 81-million tonnes.
The cost of such underperformance? A total of R80bn in lost exports. As for general freight, volumes chugged along SA’s lines are now the lowest they have been since World War 2.
What to do in SA’s case? The African Rail Industry Association suggests a few urgent measures. First, maintain the line and locomotives, since doing so will prevent unnecessary losses to productivity. Second, Transnet should introduce a dynamic, data-driven planning system to improve existing capacity across the network, instead of buying more trains (a cost it simply cannot afford).
In addition to the association’s proposals I would offer one more. Transnet should come down hard on corruption and criminality within the organisation and among all entities within its value chain. Failure to take action against bad actors will almost certainly result in another Eskom.
It is time for SA to get back on track. Railways and trains have been around since the 1800s (as has electricity). If we cannot get these 200-year-old technologies right, what chance do we have in the world of artificial intelligence?
• Nott works for a venture facility for public benefit and is based in London. He writes in his personal capacity.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.