At the end of March, South Africa’s President, Cyril Ramaphosa, met with the management of Transnet to discuss a way forward out of the crisis facing the port and rail operator.
During the State of the Nation address in February, the president announced that the government would provide Transnet with a roadmap to structural reform of the transport sector. Some steps include ensuring sufficient rolling stock is available for transporting goods by rail; upgrading infrastructure in rail and ports; addressing security challenges; and implementing reforms to enable private sector investment.
Three rail corridors are of particular concern for the rail network, the Container Corridor between Durban and Johannesburg, the North Corridor for coal exports and the North-East Corridor for chrome exports. These corridors account for 50% of Transnet’s revenue.
One of the reforms currently being worked on is the privatisation of the rail network operations while the rail infrastructure remains state-owned. Ramaphosa noted good progress in establishing a separate Infrastructure Manager within Transnet Freight Rail by October. This is a crucial step in the privatisation process.
On 27 January, Transnet Freight Rail (TFR) issued a Request for Qualification (RFQ) for a 20-year operation and maintenance lease of its container corridor between Johannesburg and Durban with the proviso that the lessee invests R5.5 billion in corridor rehabilitation and retains the current employees. TFR hopes privatising the container corridor will reduce the losses made on this service, regain volumes lost to road and tackle cable theft and vandalism.
“The lessee is expected, as per the RFQ, to commit to a minimum additional volume of 500 000 TEUs per annum,” TFR chief commercial officer Bonginkosi Mabaso said to Engineering News.
Another critical issue is an outstanding dispute with Chinese locomotive provider CRRC Zhuzhou Locomotive Company (CRRC), which has resulted in a lack of spare parts and 164 idle locomotives.
Later in April, Public Enterprises Minister Pravin Gordhan will meet with the Chinese government to resolve the locomotive supply impasse with the state-owned CRRC. Should this be fruitful, adding the locomotives back into the fleet could happen in 6 months, said Engineering News editor Terence Creamer in an interview.
Ramaphosa stressed that collaborative efforts are essential to finding solutions to repair the country’s transport system.
“Despite the crisis facing Transnet we must acknowledge the important progress that has been made in reversing the damage that was inflicted during state capture and recognise that there are many dedicated and hard-working people in the company that are committed to restoring Transnet to its potential," said President Ramaphosa.
“Transnet must quickly embark on a clear path to take us out of this crisis and ensure that the operation of our railways and ports contributes to the growth of our economy.”
