Private sector wants stab at running Western Cape’s shambolic rail service
An HCI-linked transport company has suggested it be allowed to run parts of the shambolic Western Cape rail service
A subsidiary of Johnny Copelyn’s Hosken Consolidated Investments (HCI) has proposed to the government that it take over some of the Western Cape’s embattled passenger rail services.
Passenger rail, which is subsidised by the state, is in desperate need of an overhaul. Rail commuters have to contend with trains that are late, infrastructure that is failing and an environment in which vandalism, arson and theft are everyday realities.
Commuter services are at their worst performance levels of all time. Metrorail recorded 543-million paying passengers in 2014, and by 2018 this number had dropped by just over 50% to 269-million, the Passenger Rail Agency of SA (Prasa) says.
Responding to questions from shareholders at HCI’s AGM last week, Francois Meyer, CEO of Hosken Passenger Logistics & Rail (HPLR), said the group had held discussions with the Western Cape provincial administration and the national government around participating in rail services.
Despite the "rail" in its name, HPLR only operates bus services. Golden Arrow Bus Services in Cape Town is its main profit engine.
The Western Cape rail network has experienced large-scale disruptions due to cable theft, vandalism and arson.
Earlier this year the province published, for public comment, the draft Western Cape Rail Transport Bill in response to "the very serious and urgent need to address the issues plaguing rail transportation in this province". The draft bill makes proposals on how to improve rail safety and service standards.
A summary of the draft says given that rail is operated by the national government — under the auspices of Prasa — the Western Cape government is seeking to strengthen its role in regulating, overseeing and monitoring passenger services in the province.
Meyer said the rail service in Cape Town is a mess, but cautioned that there is still a long way to go before changes will happen. "We hope to get government interested in our proposal … but that probably won’t happen in the next five years."
Meyer said the national government and Prasa were given a detailed proposal for HPLR’s involvement in rail services. "We have spent between R600,000 and R700,000 on the proposal, showing that we have the skills to operate in rail and that we are already starting to apply ourselves."
Asked what "leg-up" HPLR might have on other bidders if portions of the rail network were offered to private operators, chair Yunis Shaik stressed that no-one would have a competitive advantage as the government has been running operations.
"If we have any advantage it would be that we ran the tramways in Cape Town 150 years ago. But we also have intimate knowledge of routes and passenger patterns, and understand the nuances of transporting people. We hope we can put this experience in play in the rail sector. If we get there we will be ready."
Golden Arrow was initially called City Tramways. It operates a fleet of almost 1,150 buses that serve 3,100 routes in metropolitan Cape Town. According the HPLR annual report, Golden Arrow buses travel 60-million kilometres and convey 56-million passengers annually, at a rate of 220,000 passengers every weekday.
However, there is some scepticism about whether HPLR can overcome the challenges faced by Prasa’s Metrorail in Cape Town — especially the persistent cable theft and arson attacks.
Meyer responded that security is a priority to secure rail infrastructure, but added that wireless technology exists that could avoid the debilitating effects of cable theft.
He said if HPLR was ever successful in pitching for rail services, the initial foray would be through a pilot project. "We’d look at doing a line as a concession … to show we can actually do the job."
HPLR has the backing of muscular empowerment investment company HCI, which in turn has the Southern African Clothing & Textile Workers Union as a major shareholder.
HCI bought Golden Arrow for R250m in 2004 — a deal that, at the time, was viewed cynically by the market.
HPLR, which will soon be renamed Genesis Transport Holdings, now carries a market value of R1.1bn and generated bottom-line profits of R245m in the year to end-March.