The department of transport has welcomed the unprecedented interest shown by private-sector players in rail and ports projects that could help attract investment and expertise, and help modernise SA’s troubled logistics infrastructure.
In March, transport minister Barbara Creecy launched an online request for information (RIF) to develop an enabling environment for private-sector participation (PSP) and enhanced investment in rail and port infrastructure and operations.
The RFI portal on the department’s website recorded 11,600 visits, “an indication of a huge amount of interest”, departmental spokesperson Collen Msibi said. A total of 162 formal responses were received, with 51 responses for the iron ore and manganese corridor, 48 responses for the coal and chrome corridor and 63 responses for the container and automotive intermodal corridor.
He said the RFIs were completed online and accessed through the departmental website. The portal remained open for eight weeks, from March 24 to May 9. However, due to an overwhelming interest from the stakeholders, the deadline was extended to May 30.
Creecy has been trying to turn the fortunes of the department around as its entities including rail and ports operator Transnet, rail operator Prasa and national carrier SAA were hollowed out, looted and repurposed to serve the narrow, selfish interests of the politically connected during the state capture era.
Transnet woes threatened jobs in the mining sector about 24 months ago as commodities struggled to reach ports when Transnet was battling the theft and vandalism of its infrastructure as well as the lack of locomotives.
In May, Transnet obtained a further R51bn in government guarantees, which it said would enable it to refinance maturing debt and access cash as well as improve and reform its operations. The guarantee facility adds to the R47bn made available to Transnet in December 2023, most of which has now been used.
Msibi said the department had commenced with its assessment of the responses to the RFI: “All the information submitted will be treated with strict confidentiality and used exclusively to inform the development of potential PSP projects. The department intends to make further announcements in due course regarding the commencement of any procurement programme in respect of the PSP projects.”
The PSP projects include:
- The Northern Cape to Saldanha Bulk Minerals Corridor PSP Project primarily for iron ore and manganese exports, and the Northern Cape to Nelson Mandela Bay Corridor, primarily for manganese exports.
- Limpopo and Mpumalanga to Richards Bay Bulk Minerals Corridor PSP Project for coal and chrome exports, including coal exports from mines in Lephalale, Limpopo; chrome exports from the “Western Limb” mines in the Rustenburg-Brits region in North-West; and coal exports from various mines across Mpumalanga and KwaZulu-Natal to the Port of Richards Bay; and
- Intermodal Supply Chain PSP Project, focusing on the container and automotive sectors, on the Gauteng-Durban port (KwaZulu-Natal), Gauteng-Eastern Cape (East London, Port Elizabeth, Ngqura), and Gauteng-Western Cape (Cape Town) corridors
Msibi said a second batch of the RFI focusing on passenger rail initiatives would be released in July. During his third version of the budget speech in May, finance minister Enoch Godongwana announced that the financial allocation to the Passenger Rail Agency (Prasa) for the upgrading of its automated signalling equipment had been cut by R7bn, as part of broader spending cuts triggered by a drop in projected revenue for the fiscal year.
Godongwana noted that other proposed additions to spending allocated to Prasa over the medium term would be lowered, “in line with lower anticipated revenue”.
This followed the withdrawal of the one percentage point VAT increase that was initially proposed in the March 19 budget.
The allocations to signaling systems for Prasa have been revised down from R19.2bn in the March budget to R12.3bn in the May 21 budget. Over the medium-term, however, Prasa has been allocated R63bn, inclusive of the R12bn and R18.2bn for the rolling stock fleet renewal programme.
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