Update on Transnet rail branchlines concessioning process

[John Ashworth]

---------- Forwarded message ----------
From: <William.Mothibedi@transnet.net>
Date: Tue, Mar 1, 2011 at 3:36 PM
Subject: Update on Transnet rail branchlines concessioning process
To:
Cc: BranchLines@transnet.net

Good Day

Following submissions of Expression of Interest, the latest development on the concessioning process is that:

* Transnet’s newly appointed Board of Directors is being briefed on the branchlines concessioning process and preparations are underway to issue the Request for Proposals (”RFP”);

* The RFP is the competitive bidding phase in which Transnet will provide detailed information about each branchline opportunity and request the submission of formal proposals for the award of concession rights;

* Transnet remains committed to involving the private sector in unlocking the potential of the branchlines so as to provide a responsive economic transport infrastructure;

* Interested parties are advised that Transnet Freight Rail cannot accede to requests for assistance in conducting infrastructure assessments and engagements with customers. The forthcoming RFP process will facilitate site visits by bidders and sufficient time will be provided in the RFP period for bidders to assess the market opportunities;

* Branchlines that are currently operational will, in the interim, continue uninterrupted and will be maintained to the required standards throughout the concessioning process; and

* Transnet reserves the right to withdraw or to suspend or to terminate any of the processes forming part of the proposed Branchlines procurement process at any time and from time to time, without prior notice and without liability to compensate or reimburse any party or person.

Queries can be sent to branchlines@transnet.net

Kind regards

Transnet Limited

William Mothibedi
Senior Manager: Stakeholder engagement
Branch lines concessioning

Telephone Number 011 544 9635
Cellphone Number 083 461 6810
Fax Number 011 773 0704
Email Address william.mothibedi@transnet.net
www.transnet.net

[Mike Haslam]

I am relieved his statement was dated March 1st, rather that April 1st..............

[Steve Appleton]

This still doesn't clarify the possible future status of operational branch lines, for example Rayton-Cullinan. What happens to those lines when possibly no concession bids or no acceptable concession bids are received.

What then does TFR do? Close those lines and force their customer/s onto road? Or, will TFR be required to continue to operate those lines itself to satisfy the needs of those customer/s?

Bear in mind that if those lines are closed, besides the "socially undesirable" placing of more trucks on the roads, TFR itself would loose out on the revenue it enjoys for carrying the branch lines' loads over its core network. Given that TFR's core network is usually the longest transit portion and that the core network's per tonne-km costs should be lowest given the greater efficiencies that must (or should) exist in the core network, these losses on margin, could be substantial. Would it then be a clever thing to close those branch lines where they provide traffic into the core network? Only, I guess, if TFR put on blinkers and retreat into the closet -- i.e. back themselves into the two major bulk lines (Orex and Coalex) only where branch lines feeding traffic into the core network do not exist.

This is certainly relevant to the future of the Cullinan-Rayton branch as presently used by FOTR for its excursion trains. FOTR is rightly concerned about the risk of closure. But, will this happen? Can it happen? Would TFR be so foolish?

[Dylan Knott]

What freight traffic is currently transported on the Rayton - Cullinan section?

[Steve Appleton]

Dylan, Essentially only inbound iron ore from the northern Cape. About two freights a week comprising about 10 to 20 wagons traverse the line to the small Davsteel plant at its end near Zonderwater. The only other traffic is FOTR's steam excursion train which runs roughly once or twice a month for 8 to 9 months of the year (no trains in winter because of the fire risk, cold weather and short daylight hours). The diamond mine generates no traffic and there is no general freight either to my knowledge. The steel plant's coal requirements that were once on rail are now met by road transport.