Encouraging signals for private sector participation in rail

While there is an

encouraging change in

mind-set contained in

Transnet’s decision to test

private-sector participation

in branch lines in the

country’s rail network, there

is little enthusiasm amongst

the major rail transport

operators.

According to Mervyn

Padayachee, logistics

director of MSC Logistics,

the problem is that Transnet

Freight Rail (TFR) was

supposed to identify which

lines would be put up for

tender and communicate

that to industry. But, he

added, nothing more had

been heard.

“I thought it sounded like

a good idea when I first

heard it,” said Padayachee.

“However, if it’s only isolated

lines they choose – and I

suspect that is the case –

then it’s no use.”

The problem is that

branch lines carry very little

traffic, while private sector

participants would need

large volumes of freight if

any line they took on was to

be commercially viable.

“What we in the rail

transport business are

really looking for is to get

participation in the main

routes connecting ports to

the likes of Johannesburg,

Zimbabwe and so on.”

However, Padayachee is

convinced that TFR will

keep a tight grip on these

lines, as those are the rail

operator’s main source of

revenue.”

Transnet seemed

to confirm that when

describing how they were

applying

different

models to test

private-sector

participation

in branch

lines. And,

in speaking

to various

government

departments,

Transnet

defined

branch lines

as being “secondary railway

lines running from the main

rail line”.

The idea of Transnet

bringing in the private sector

to operate its branch lines

under concessions is not

new, but came to the fore in

2014 when about 20 branch

lines were identified as

possibilities,

and a model

developed

for private

companies

to be able to

operate them.

But,

according to

Transnet, the

goods carried

on these

branch lines

were mainly

bulk agricultural products,

with other bulk commodities

playing a secondary role.

According to Padayachee,

these are mainly “farm

lines” with relatively low

volumes of bulk products.

And what the private sector

has a preference for is to

get involved in carrying

containerised general freight

between ports and other

main centres around the

country and overborder.

However, public

enterprises minister, Lynne

Brown, has been in talks

with Transnet leadership

to accelerate privatesector

participation in the

parastatal’s ports and rail

projects.

And the good news is that

it has been reported that

the government has said it

is looking into allowing the

private sector to operate

on the main lines, not just

branch lines.

INSERT

Government has

said it is looking into

allowing the private

sector to operate on

the main lines.