Rail access pricing framework for South Africa
The bulk of the South African freight rail network comprises a state-owned, vertically integrated operator, which essentially does not allow freight rail competitors to access its network (some passenger access arrangements are in place). Going forward, the policy position of government is that access should be allowed on this network, as market entry via access rights has the potential to increase the efficiency and productivity of the rail system, via increased price and quality contestation. However, the pricing of third-party access also holds significant risks, particularly as regards the sustainability of investment in the rail infrastructure. The report looks at international practice in rail access pricing systems in order to develop a proposed framework for rail access pricing in South Africa. Particular attention is paid to the need for price differentiation to improve system efficiency, and how such price differentiation should be implemented.