“Something hit me very hard once, thinking about what one little man could do. Think of the Queen Elizabeth again: The whole ship goes by and then comes the rudder. And there’s a tiny thing on the edge of the rudder called a trim tab. It’s a miniature rudder. Just moving that little trim tab builds a low pressure that pulls the rudder around. It takes almost no effort at all [...] The truth is that you get the low pressure to do things, rather than getting on the other side and trying to push the bow of the ship around. And you build that low pressure by getting rid of a little nonsense, getting rid of things that don’t work and aren’t true until you start to get that trim-tab motion. It works every time. That’s the grand strategy you’re going for.

- Buckminster Fuller

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Magnus Heystek of Brenthurst Wealth Management made a curious observation in a recent BizNews interview. His outlook on investment in South Africa seems to have taken a slight pivot to a sunnier disposition, but this is not necessarily unusual.

After all, the stock market has made somewhat of a rebound, even if the bond market suggests people are hedging their bets.

The thing that piqued my interest was a remark he made about the positive opportunies presented by Operation Vulindlela, Cyril Ramaphosa’s large-scale infrastructure rehabilitation program.

It was specifically that he highlighted the necessity of the railways.

This may not look like an obvious trigger for a major lightbulb moment, but I remember coming across a detailed report on the state of the railways in South Africa from the Brenthurst Foundation, the research companion to the Oppenheimers’ Brenthurst Wealth Management.

According to the long term study by the Brenthurst Foundation, our rail system has been declining in demand for almost 50 years relative to road transport, as the expansion of our road networks for private transport has led to a gradually accumulating advantage for road transport over rail.

The thesis is fairly simple - the use of roads over rail for the transport of goods, according to this report, is a trend that reached a tipping point already in 1977, and this trend continues. And yet the government does not apply itself to the problem, and fritters billions away on rail while neglecting our roads.

The number of roads in South Africa may indeed be large, at 750 000km, but only 21% of this is paved. The condition of our roads is notorious, and road safety is considered by experts to be the worst in the world. Professional reports on road conditions leave only the Western Cape and the private toll roads of Gauteng with an unambiguously positive rating, the rest of the country dragged down by an almost total absence of monitoring or maintenance.

Part of this is due to the fact that in 1977, the government removed restrictions of the weight of road vehicles, to reduce transport costs under sanctions. But what is not discussed by the report is the unintended consequence of this change.

With the increase of heavy loads on the roads, the roads received increased wear and tear from extended use under heavier loads. It also meant that all this freight traffic was no longer travelling by rail, and the transport fees that could have contributed to rail maintenance have evaporated, increasing the burden on infrastructure all round.

The relationship between road damage and axle force is exponential, by a power of four. This is such a steep ratio that an almost infinite quantity of ordinary passenger vehicles can be tolerated by the road surface with negligible result, whereas a moderate amount of heavy goods vehicles can multiply potholes and fractures rapidly.

There has been ample opportunity to change this, but it seems to have eluded many advisors to the state. While rail as a goods transit service may be inefficient due to its route inflexibility, by shifting the freight to the roads, we are externalising the costs to the taxpayer, instead of minimising overall transport maintenance cost by placing the burden on the much more robust rail system.

The added benefit of balancing the fiscal burden between the two trasport modes is that is offers an opportunity for fixing the one area where our rail services are still essential, and yet have massively collapsed - passenger transport.

Passenger transport has been in a death-spiral since at least 2014, and the causes should surprise nobody. As the aforementioned Brenthurst Foundation report says:

“the national rail network is no longer on its knees: it is out for the count. Thanks to management instability, incompetence and astonishing neglect of simple governance (the entire PRASA board was fired by Minister Mbalula in December 2019), no rail security guards at all were in place for several months during the lockdown in 2020. The thieves moved in. In mid-September last year, more than 6km of cable was stolen in just 24 hours.”

Just over a month ago, Minister of Transport Fikile Mbalula announced that during the lockdown period, the rail services had accrued R1.9 billion in damages due to vandalism alone, and that 80% of our passenger rail cars had been vandalised. Typically for an ANC department, they blamed their subordinates at PRASA for the damages, without addressing the systemic incompetencies demonstrated by all the interlocking departments required to maintain the infrastructure.

The failures are share by the department of transport and the police alike. The railway police force, a separate and well-trained branch of state security, were transferred to the notoriously corrupt and incompetent SAPS in 2007, making them dependent on the schedules, budget, equipment and staff demands of the police service, and saw most of their remaining senior staff let go, ridding them of any experienced members to uphold standards.

More recently, the lockdown policies, which have demonstrated themselves largely ineffective at containing the spread of the novel coronavirus, have led to a destruction of the economy, creating desperation and a surge in metal scrap theft. This has affected power stations, where transformers, conduit cables and batteries has led to an acceleration of load shedding nationwide.

But its effect of rail is crippling, as the overhead cables required to power electric rail are stolen. Incompetence, financial mismanagement and corruption mean that acquiring replacement parts is often a long enough process that whole stations disappear into rust while waiting for their lines to reopen.

Due to the perennial threat of vandalism, rail cars are often destroyed. They are also seldom replaced or repaired, leaving just 33 of the Western Cape’s 88 rail cars operational. Train stations are destroyed by theft and vandalism, and power outages mean that warning lights at rail junctions are out of order, creating severe safety hazards. Squatters, protected by stringent national legislation, deliberately build shacks on top of WC rail networks after removing the rails, and refuse to be relocated.

All of this would appear to be in line with the governing party’s long-standing strategy, usually implemented through informal or illicit channels, to make territory it does not control ungovernable, the WC sees 71% of all rail arson attacks.

This creates opportunities for tenders, while undermining the public perception of the performance of services in the province, where most people assume that the DA controls all government services, which are mostly still in the hands of the central government.

Ramaphosa has announced a R900 billion project to combat metal theft and vandalism on the rail networks, with some impressive claims regarding security personnel and the deployment of surveillance drones. He also has poured R100 billion into the port of Durban. But a change in the manner of doing business from the previous presidency cannot be expected.

Under the Zuma-era NDP program, Transnet and Prasamoney was funnelled into many corrupt projects (as an MP put it, an “Armageddon of corruption”) under the guise of facilitating a transfer of services from road to rail. But despite criticism of the corrupt system of cronyism called cadre deployment, Ramaphosa insists that it is in principle a good way of doing business.

Given the track record of this administration’s disastrous neglect of our infrastructure during lockdown, the unprecedented levels of corruption seen under its watch, and the refusal to rid itself of the most pernicious corrupt practices, the likelihood that we will see an end to theft, degradation and wasteful expenditure is slim at best.

But this can be easily remedied - a leaky bucket can still remain full if the inflow exceeds the outflow, and the problems with transport infrastructure can almost certainly be ameliorated with just one simple fix - road freight weight limits. Enforcement will be difficult, because of the opposition to eTolls, but the eTolls policy had a valid point behind them - roads are a black hole for funding.

The major cause of road damage can be a source of revenue, while discouraging the excess damage by incentivising these trucks to get off the roads.

The benefit of the return of the railways can also be seen in one of the effects of its retreat - the loss of the parcel trains. Parcel train services allowed small businesses easy and cheap access to regular goods transport, giving smaller towns the opportunity to sustain themselves.

This loss of internal trade has resulted in a rapid collapse of small town economies across the country in the past 30 years.

Perhaps with the ear of such influential people as the Brenthurst Foundation, whose patrons are also the biggest donors to the DA, particularly at a time when the DA are as close to the throne as they are now, Heystek could be responsible for turning the tide on South Africa’s economic conditions by proposing what is an extremely small intervention, and one which will cost a fraction of the development strategies which are currently being floated to cope with the current economic conditions.

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