Quantifying the economic benefits of gauge changes on the South African core railway network

Abstract

In its white paper, the Department of Transport proposes a future South African core railway network which requires the conversion and construction of over 8,500 km of standard gauge railway track by 2050. The scale of the project would undeniably have a large cost attached to it which needs to be well understood before any of the construction takes place. Numerous studies regarding railway gauge have been conducted in South Africa, however, no single paper has addressed the issue of which specific railway corridors could economically benefit from a standard gauge intervention. The purpose of the study was to identify which corridors in the South African core network could potentially benefit from a gauge change intervention. These identified corridors were then economically evaluated to determine which of the corridors would outperform the base case which was set as the Market Demand Strategy (MDS) plan. The three main gauge interventions which evaluated includes the direct conversion from narrow to standard gauge, the addition of a third rail to a narrow gauge line and the construction of a ring-fenced standard gauge line adjacent to a narrow gauge corridor. Lastly, simulations were carried out on the corridors which outperformed the base case, to establish how the operations of the corridor would be affected. Agent based simulation was conducted to understand the effects of the gauge changes performed on corridors which met the described criteria. The conclusions of the study indicated that all of the corridors in the South African core network should follow the plans proposed in the MDS to achieve the maximum return for the analysis period, except for the Natal corridor. It was identified that the Natal corridor would benefit most from a standard gauge single line which would run concurrently with the narrow gauge corridor transporting containers and other general freight. The results of the study did not directly correlate with Department of Transport’s white paper gauge change proposals. Many of the gauge conversions proposed by the white paper could be highly uneconomical and may require large government subsidies should they be undertaken. A thorough understanding of the financial implications of performing large scale gauge changes is required before any construction should take place. This study should be seen as a steppingstone towards this understanding.