The cabinet has approved the Freight Logistics Roadmap, which sets out the government’s guidelines for reforms, including increasing private sector participation in the operation of ports and rail networks.
The road map, approved during a special cabinet meeting on Friday, will be implemented in conjunction with Transnet’s turnaround plan, which aims to stabilise the entity’s finances and operations.
The approval of the road map — drafted by the government and big business — is a significant step towards confronting the serious problems at SA’s rail and port infrastructure, which are constraining output across the economy.
The road map proposes that Transnet be unbundled to break its monopoly and allow for greater private sector participation in the sector. It means the state-owned entity will continue to own the rail network but will allow private companies to lease or operate their own locomotives to transport agricultural, mining and other goods to and from the country’s ports.
In a post-cabinet media briefing on Monday, minister in the presidency Khumbudzo Ntshavheni said the road map outlines three areas of intervention to improve rail performance. These are returning long-idled locomotives to service, improving the security of the rail network and implementing “capital investment programmes both for the expansion plans and also to sustain operations”.
Job losses
Ntshavheni said: “The immediate priority is to stabilise and improve the operational performance of the freight rail network, which presents a severe constraint on exports. The main implementation mechanism for the short-term interventions will oversee operational improvement through five [Transnet] corridors.
“The impact is currently felt more in job losses in the mining and manufacturing sectors. The immediate priority is to stabilise and improve the operational performance of the freight rail network, which presents a severe constraint on exports.”
The company, which made a R5.7bn loss for the year to March, has asked the government to take over R61bn of its debt and inject R47bn of equity.
Earlier in December, the Treasury approved a R47bn credit guarantee facility. The government has attached strict conditions, including implementation of the recovery plan presented by the board in November and honouring commitments to introduce private operators to the network.
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