Quantifying the economic benefits of changing the Gauteng to Durban railway corridor from narrow to standard gauge Christian Demmerez de Charmoy Prof. PJ Gräbe | University of Pretoria SATC2019 Good Afternoon… Introduction

Background South Africa’s decision to choose narrow over standard gauge in 1881: Reduced construction costs Tighter curves In theory to construct a standard gauge railway line is 6 – 10 % more expensive than narrow gauge DoT (2009). South Africa’s Early decision to use narrow gauge: This is why we still use it today.

Background Why use standard gauge and not narrow gauge? Van der Meulen (2010) & DoT (2017) – The railway industry is driven by: Increasing speed, Escalating axle load, and Increasing train lengths. Standard gauge trumps narrow gauge in axle loading, speed, quality of R & D, allows for double stacking, more economic and economies of scale exist DoT (2009). Why use standard gauge? Well, the railway industry is driven by… Stated reasons why std gauge is superior

Background DoT (2009) - Global gauge information: 60% of the railways in the world are standard gauge including China and America Only 8% of the world use narrow or Cape gauge Kithinji (2016) - Africa’s current position regarding railway gauge: Kenya, Ethiopia, Ghana and Nigeria recently completed construction of standard gauge railway lines Global context on railway gauge – Narrow gauge is not the most used gauge in the world

Background The South African railway network consists of 22,387 route-km or 30,400 track-km (Transnet, 2012) The network is entirely narrow gauge except for the ~80 km of the Gautrain network, which is standard gauge The South African network - background

Background South Africa’s position regarding railway gauge: Department of Environmental Affairs (2015) compiled a paper titled “Freight shift from road to rail” The Department of Transport (2017) compiled a White paper titled “National Rail Policy” Both of these papers focussed on South Africa’s 2040 and beyond freight transport situation. Both recommend considering a standard gauge solution, however, no detailed analysis has been performed on individual rail corridors within South Africa. What is South Africa’s Position regarding gauge? Both reports suggest standard gauge and also recommend implementing policy to reposition rail. Still no detailed economic analysis performed on these proposed projects.

Background Van Der Meulen (2010)

Background DoT (2017) - far more expansive SG network

Background Display corridor of interest.

Objective To determine whether it will be economically beneficial to change the corridor from narrow to standard gauge through the economic analysis of various scenarios.

Methodology Scenarios evaluated included the following: Leaving the line as a narrow gauge line while performing minimal upgrades Performing line upgrades as per Transnet’s Market Demand Strategy Convert the corridor from narrow to standard gauge Building a new standard gauge railway line adjacent to the current narrow gauge corridor Must be refer back to these options, try to remember. 1 Do nothing 2 Transnet 3 Std Gauge conversion 4 Std Gauge ring fenced line

Construction Costs Distance from Booth (Durban) to Reitvallei (Johannesburg) is 697 km. Rates obtained from Transnet (2017), Rostami et al. (2013) and Hadi et al. (2016). Rail has a high Capital cost attached to it.

Rolling Stock Costs The costs per locomotive vary depending on the type of gauge the locomotive will run on. Locomotive Type Electric (R million/unit) Diesel (R million/unit) Narrow Gauge 41.0 32.0 Standard Gauge 25.8 20.2 Locomotives – NG more expensive than SG, reduced space between wheels above the axle.

Rolling Stock Costs The costs per wagon are similar regardless of the gauge the wagon will run on. Container CR (R million/unit) Tanker (R million/unit) Wagons 1.2 2.5 Wagons have similar prices regardless of the gauge they run on.

Operating Costs Operating costs were determined using the Harris relationship which relates line density to the operating costs. The operating costs for the Natal corridor calculated using the Harris relationship differed by +5.5 % when compared to Transnet’s reports. Harris relationship used to calculate costs on the line by associating the amount to line density.

Results – Cases 1 and 2 CF 1 – DN CF 2 – MDS plans Why tonnes lost? Due to capacity constraints on the line and physically cannot transport additiontal tonnage.

Results – Cases 3 and 4 CF 3 – Convert to SG CF 4 – Build ring fenced SG line + carry out MDS plans CF 4 – could also carry additional freight from the road – an additional 35 mtpa would lead to a calculated 50% Used Capacity on the line.

Results – Cumulative Present Worth

Conclusion The railway networks within Southern Africa are positioned to handle the predicted freight rail demand but need to be ready for the future. The results of this paper suggest that the Durban-Gauteng corridor would benefit from a ring-fenced single line standard gauge railway. The addition of this line would aid in the transport of mainly double-stacked containers as well as various other commodities. Additional line capacity will be available on the narrow gauge corridor and the standard gauge line will be available to transport any additional freight.

Acknowledgements Transnet Freight Rail is thanked for sponsoring the Chair in Railway Engineering at the University of Pretoria, My supervisor, Professor PJ Gräbe, and The University of Pretoria and The Department of Civil Engineering

Questions?