State-owned freight, rail and logistics group Transnet will start the process of providing third-party access to its freight rail network from April, President Cyril Ramaphosa says.
In his state of the nation address (Sona) on Thursday night, Ramaphosa said the state-owned entity (SOE) would start by making slots available to third-parties on the container corridor between Durban and City Deep in Gauteng.
Bringing private operators into SA’s rail network is one of the key areas of structural reform Ramaphosa has identified in his overhaul of the economy, to boost investment and job creation.
Private participation in the freight rail sector is expected to increase competition, boost efficiency and reliability and reduce costs for customers.
Ramaphosa said Transnet had also developed partnerships with the private sector to address cable theft and vandalism on the freight rail network, through advanced technologies and additional security personnel.
“This collaborative effort is already showing results in reduced disruptions to rail operations,” he said.
Transnet has also been hamstrung by operational issues at the ports, including ageing, out-of-service infrastructure and congestion, particularly at the ports of Cape Town, Durban and Richards Bay. This has left many who export and import goods frustrated and fearing huge losses.
Ramaphosa said Transnet is addressing these challenges and is currently focused on improving operational efficiencies at the ports through procuring additional equipment and implementing new systems to reduce congestion.
Transnet will ask for proposals from private partners for the Durban and Ngqura Container Terminals within the next few months, which will enable partnerships to be in place at both terminals by October, the president said in his address.
He said that over several years, the functioning of SA’s ports had declined relative to ports in other parts of the world and on the continent.
“This constrains economic activity.… the agricultural sector, for example, relies heavily on efficient, well-run ports to export their produce to overseas markets. Fresh produce cannot wait for days and even weeks stuck in a terminal,” Ramaphosa said.
The president has, in previous addresses and on numerous other occasions, vowed to fix SOEs, but many of them, including Eskom, Transnet, the Passenger Rail Agency of SA and Denel, have remained in a parlous state and regarded by ratings agencies as a major threat to the country’s finances. Many of the entities were hollowed out at the height of the state capture project under former president Jacob Zuma.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.