MR Siyabonga Gama has a problem. On the one hand he has a government pushing a vote-catching agenda to drive freight off South Africa's embattled roads and onto rail. On the other, the railway, on which he holds the top job, began retreating from the bitter struggle for single wagonload traffic back in the 1980s when the government abolished the last bits of legislation protecting the railway from road competition.
Now the country is overrun with lorries. The rural road network has been battered by these vehicles which with a 58-tonne gross vehicle mass are amongst the world's heaviest. With the road maintenance backlog standing at an estimated Rand 150bn ($US 12.93bn) - exact figures are difficult to come by - and 12,000 people dying every year in road accidents, the government believes that moving freight to rail will save the roads and end the carnage.
That the government's wishes might not dovetail with Transnet's plans does not appear to worry the politicians: Transnet Freight Rail (TFR) is a state-owned company which creates the perception among many people - however incorrect - that Transnet must do the government's bidding.
Gama has been in the top job at TFR since 2011. During his tenure, TFR and the Transnet group as a whole has continued to defy its critics by posting record tonnages and profits - in 2013 TFR carried 210.4 million tonnes and earned profits of Rand 5.1bn.
This is a very different company from the one Gama joined in 1994 when it was bleeding cash (it made a Rand 21m loss in 1995), while its general freight business had evaporated, its motley fleet of diesel and electric locomotives were showing their age, and a slew of uneconomic branch and trunk lines had closed.
Credit
Much of the credit for its change in fortunes is due to a combination of the long-running commodities boom and the leadership and financial discipline of former chief executive Ms Maria Ramos, who swapped the treasury department for TFR in 2003.
It is an impressive turnaround in the light of what Gama calls the "delinquent underinvestment" in the late 1990s as Transnet followed the advice of consultants to shrink the business.
"They said [Transnet] must no longer invest in the general freight business, park some of the locomotives, and that they would make money by shrinking themselves into greatness," Gama says.
Instead, Transnet began investing heavily in itself, culminating in its current Market Demand Strategy (MDS) which includes Rand 312bn of investment in new locomotives and track, port upgrades and improved infrastructure by 2020. Last March, TFR placed an order with four locomotive builders for 1064 diesel and electric locomotives, the first of which are rolling out of factories in China and South Africa. Gama says most of these units are earmarked for general freight, and it is here that the battle against trucking will play out.
"There is lot of rail-friendly freight on road," Gama says. "And even if the economy does not respond the way we would like from a growth perspective, there is still a lot of gain [for us] by making sure an efficient rail service actually translates into road freight being converted to rail."
Gama likes to use the spectacular growth in TFR's container division as an example of how general freight traffic is returning - TFR figures show annual growth of 20-25% in container traffic for the past five years.
"We estimate that there is 1.2 billion tonnes of transportable GDP and we are doing only 200 million tonnes," he says. Of that, Gama reckons 450 million tonnes is rail-friendly. "And it will grow," he says.
TFR will not chase the other 650 million tonnes. "It's for trucks, short-haul distances, small parcels - it doesn't lend itself to rail," he says. "The single wagonload business is not for us."
Yet he says TFR would be willing to haul less than the standard 40-wagon trainload. "Our model has been predicated on 40 wagons but we can do 20 wagons on short hauls, overnight trains to distribution centres, and trucks can take over from there."
Transnet is currently looking at alternative intermodal technology. Agreements have been signed with two local private firms to test RoadRailer and RailRunner "truck-trains," and test trains were expected to be trialled early this year on the main Cape and Natal corridors.
"We believe that it is likely to be a disruptive technology which will help take a lot of freight from road to rail, especially on the longer legs," Gama says.
If the trials are successful, it will be good news for Transnet, the government and the country's beleaguered road users. Whether such technology will revive the axed branch lines and trunk, remains to be seen, however - and there are still many places in South Africa that the rails do not reach.
