The government is setting up an office to facilitate private investment in ports and rail infrastructure to prevent a potential crisis and to replicate the success of SA’s energy procurement agency, the independent power producers’ office.
Transport minister Barbara Creecy said on Sunday that her department was in the final stages of concluding a memorandum of understanding that would establish a private sector participation (PSP) unit with the Development Bank of Southern Africa (DBSA) and the National Treasury, with plans in place for the DBSA to host the unit.
An interim PSP unit established in 2024 in the department “comprising a team with extensive expertise in structuring PSP contracts and procurement” has already developed rail freight and port requests for information, which are intended to gauge the market’s interest and readiness in assisting it to ramp up private sector investment in rail and port infrastructure and operations.
This could be a significant step in enabling private sector involvement, which is seen as crucial for improving efficiency, attracting investment and modernising infrastructure. It can also reduce congestion, lower costs and enhance trade competitiveness.
The DBSA also houses the water partnerships office, which facilitates private investment in state water infrastructure projects. The water partnerships office has begun to mobilise private sector financing for water projects in eThekwini, Mangaung, Buffalo City, Nelson Mandela Bay and Tshwane for the replacement of leaking municipal water distribution pipes, which cause water wastage.
The establishment of a similar unit for SA’s rail network is in line with the government’s push for more capital spending from the private sector and underscores the state’s fiscal constraints.
“SA’s rail and port infrastructure faces substantial challenges, including declining performance; theft and vandalism; underinvestment; and operational inefficiencies. All of these hinder trade and economic growth,” Creecy said.
Mandates
“The limited availability of state resources to fund infrastructure development and address backlogs has intensified these challenges, severely restricting the ability of state-owned entities to fulfil their critical mandates.”
The requests for information initially cover key corridors used to transport critical minerals to SA’s ports, the performance and use of which have steadily declined over the past decade for several reasons, including theft and vandalism and a lack of maintenance.
These corridors include the Northern Cape to Saldanha Bulk Minerals Corridor, primarily for iron ore and manganese exports, the Northern Cape to Nelson Mandela Bay Corridor, primarily for manganese exports, and the Limpopo and Mpumalanga to Richards Bay Bulk Minerals Corridor PSP project for coal and chrome exports, including provision for magnetite exports in port.
The requests for information also focus on the port, container and automotive port terminals and back-of-port arrangements, as well as railway and inland terminals for the Gauteng-Durban port (KwaZulu-Natal), Gauteng-Eastern Cape (East London, Gqeberha and Ngqura) and Gauteng-Western Cape (Cape Town) corridors.
The passenger rail requests for information include Gauteng Metrorail depots in Braamfontein (Johannesburg) and Wolmerton (Tshwane), the X’Trapolis Mega train factory in Dunnottar (Gauteng); and the resignalling of Metrorail in Gauteng, KwaZulu-Natal and the Western Cape.
Creecy said the requests for information had been initiated in an effort to ensure that the eventual request for proposals were “guided by current realities in the rail and port environments”.
“The requests for information will enable us to articulate the challenges in a structured and coherent way, clearly defining their scope, context and impact to inform the development of focused, strategic and sustainable solutions,” she said, adding that other social partners, such as labour, could also raise their priorities and concerns through the process.
“The PSP unit and Transnet will develop the policy-aligned PSP programme, which will enter the formal procurement phase from the end of August 2025,” Creecy said.
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