Railway Realities: Traxtion CEO James Holley Speaks on South African Rail's Challenges & Prospects

Railways Africa

Amidst the bustle of the International Railway Safety Council conference in Cape Town, hosted by the Railway Safety Regulator, we engaged in a candid "Coffee with the Editor" session with James Holley, the CEO of Traxtion. Our discussion touches on Traxtion's growth, the challenges and opportunities facing South Africa's railway sector, and the actionable steps ahead for the industry. Aligning with Open Access Open access is on the horizon for South Africa's railway sector, and Holley views it as the next significant growth phase. The freight opportunity in South Africa is substantial. However, on the other hand, our economy is in dire need of rail freight expansion. The potential is vast, but challenges persist. Last year, estimates suggested a 6% GDP loss due to a decline in rail freight volumes. This year, there's an anticipated loss of 4.5% of GDP because of a similar decrease in rail freight volumes, underscoring the urgent need for increased train capacity. Holley has acknowledged the recently approved National Rail Policy by the cabinet. The forthcoming step is for the infrastructure manager to commence the implementation of that reform, along with the Economic Regulator. Infrastructure Challenges Despite the potential, Holley emphasized that underlying infrastructure challenges could impede progress. "We have to consider the economics associated with reform, and we need to understand the efficiencies associated with our ability to operate, especially given potential issues with the track infrastructure condition," he remarked. An analysis by the African Railway Industry Association (ARIA) highlighted an approximate R30 billion underspend on maintenance over the past 11 years. We have to find a solution for the investment, especially considering tens of billions of rands needed for infrastructure improvement. In the context of a constrained Transnet balance sheet and a national fiscus with highly competing requirements for its money, the pressing question is how we get private sector money into the infrastructure? "Train sets are so expensive," Holley stated, stressing the need to ensure infrastructure efficiency before making significant investments. Addressing this backlog is vital if reform is to be more than just a topic of discussion. "Before investing, you must be absolutely certain that the train set will deliver the expected efficiencies to justify the costs," he added. National Logistics Crisis Committee Holley notes that the National Logistics Crisis Committee (NLCC) as the right forum for achieving tangible results. Comprising government, business, and union stakeholders, it serves as the platform for addressing and finding solutions to the sector's challenges. The committee's high-quality representation from the business world further cements its importance. Safety First At the International Railway Safety Council event, we couldn't conclude our "Coffee with the Editor" session without addressing safety. Traxtion has maintained the equivalent of a five-star safety rating for seven consecutive years and has reported zero injuries for four of those years. Safety is paramount. Holley attributes this record to both training and the quality of the Traxtion team. He highlighted the Traxtion Rail training centre, in place for the last 18 years, emphasizing that providing people with the right tools and accreditation is essential for achieving success across the business. Holley concluded by recognizing the significance of the Railway Safety Regulator (RSR) in the industry. "The RSR is an extremely important stakeholder," he said, emphasizing the need for industry-wide support. It's clear that while challenges remain, both Traxtion and the broader railway sector in South Africa are on track for growth and innovation, as long as the necessary infrastructure challenges are addressed. Watch the full interview for more details. #RailwaySafety #Traxtion #SouthAfricaRailways #InfrastructureChallenges #RailwayInnovation #InfrastructureChallenges #RailwayInnovation #OpenAccess #RailFreight