Another key industry body in SA logistics sector has voiced its support for Transnet’s rail network statement that brings closure to the introduction of third-party access to the national rail network.
The Multimodal Inland Port Association (MIPA), an inland port body representing six major inland ports in SA and one in Namibia, this week described the move as a “landmark development” that promises to unlock new opportunities for economic growth, job creation and environmental sustainability.
The network statement, approved by transport minister Barbara Creecy in December, provides a clear framework for private sector participation in the rail sector, which the Road Freight Association (RFA) expects will reduce the burden on SA’s road network as third-party operators shift from road to rail.
MIPA chair Warwick Lord described the move as positive for the freight industry.
“The release of the network statement is a transformative moment for SA’s logistics sector. It provides the clarity and certainty needed for private investment in rail operations, which will help us achieve the government’s ambitious freight targets. This is a significant step forward in creating a more efficient, sustainable and competitive transport system,” he said.
Within the next five years, the government aims to move 250- million tonnes of freight a year by rail. According to Creecy, the network statement is a critical step in achieving this goal, but the Transnet Rail Infrastructure Manager (TRIM), which oversees SA’s 21,323km of rail infrastructure, has said that R65bn will be needed for maintenance and capital expenditure.
With Transnet reporting a R2.2bn interim loss for the six months to end-September, the RFA voiced concerns last week about the cash-strapped utility provider’s ability to create a suitable environment for third-party operators to operate efficiently, warning that the rail network may not be ready to accommodate a flood of trains.
In its latest interim results, Transnet said it requires R14bn a year of investment to refurbish its six corridors, which have been hit hard by theft, vandalism and outdated systems.
Lord was optimistic about the tariff system outlined in the network statement, which he said “ensures fair and transparent access, allowing third-party operators to plan their services efficiently and invest in rolling stock”.
With the network statement now in place, we can accelerate the deployment of our innovative road-to-rail solutions.
— MIPA chair Warwick Lord
RailRunner SA, a logistics group that provides technology solutions for Transnet, said the transition will not be smooth sailing given Transnet’s legacy issues around security and signalling, but that the new tariff regime would benefit private operators.
“With the network statement now in place, we can accelerate the deployment of our innovative road-to-rail solutions,” Lord said.
“The publication of the network statement is a significant step towards realising the vision of a modern, efficient and sustainable rail system in SA,” he said.
“There is no doubt that road and rail transport are interdependent and must work together seamlessly to ensure efficient and sustainable transportation.”
Despite the optimism expressed by businesses and industry bodies, the question of affordability remains paramount to facilitate the liberalisation of SA’s rail network.
“The quantum of investment required to rehabilitate lines of economic importance by far exceeds Transnet’s capacity for funding thresholds and therefore the TRIM is urgently seeking fiscal support to address these underlying issues, stabilise the rail network and bolster economic growth,” reads the network statement.
“Though alternative funding sources through private sector participation are being explored, these are envisaged to take considerable time to implement. In the interim, capacity needs to be restored to enable rail reform.”
With Kabelo Khumalo
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.