Mining sector ready to invest in rolling stock

The concept of public/private partnerships (PPPs) is firmly on the table at Transnet and could be the solution to the future development of the coal line running export coal from the inland mines to the Richards Bay Coal Terminal (RBCT). Group acting CE, Chris Wells, used the term when referring to that cart before the horse situation where the RBCT – with a big share of the R1.2-billion total being invested from its coal mining users –reached a capacity of 91-million tonnes in May this year. The sad thing here is that the annual volumes moved by Transnet Freight Rail (TFR) still fall far short of the total capacity at the RBCT. Compared to these rather glorious figures, the rail line’s current annual haulage to the terminal is a rather miserly 65-mt. And the current Transnet five-year plan allows for a total of R16-bn on what Wells described as “new bits-andpieces” and would bring the line’s theoretical carrying capacity from its current 70-mt (which Transnet Freight Rail still can’t meet in practice) to 81-mt a year by 2015. Any more will need ‘private sector participation’, he said. And that private sector is there – willing, ready and able, to play its bit. Said Ernst Venter, acting CEO of Exxaro Resources, the largest SA-based mining company in the country: “Public, private partnerships (PPPs) are the way to go. “We have already made a proposal to Transnet indicating that we’re willing to invest in rolling stock to boost the coal line to the RBCT. “We’re fully involved in PPPs. It’s critical for us going forward.” And, Venter confirmed, his company was anything but alone in this private involvement scheme. “There is a coalition of mining groups looking at the PPPs concept for rail. It’s very definitely on the agenda.” SA is also not alone in this concept. Reports out of Australia reveal that exactly this type of coal miners and government-owned rail operations involvement is prevalent there too. Reuters recently reported that Australian coal miners had made a joint bid of the equivalent of almost R30-billion for a rail-track network in the country’s Queensland coal state – on condition the state government dropped its plan to sell both the track network and the coal haulage business, including trains and wagons, in an initial public offer (IPO). The recurrence of the PPPs concept – which was that catch-phrase made public by the then Minister of Public Enterprises, Alec Erwin, some five years ago – is seen as an acceptable alternative to full privatisation of state-owned assets, after the unions, in the form of Cosatu, declared this concept an expletive. At its phoenix-like reappearance last month – when a discussion between FTW and Transnet infrastructure development executive, Chris Matchett, heard him saying that a PPP was essential if the rather grand Port of Durban master-plan for development was to be put into practice. This theory rather excited Dave Rennie, director of the Grindrod Group – which was one of the original group of companies planning fullscale involvement in any port privatisation schemes. When he heard the Matchett proposal from FTW last month, he told us he had a meeting with Transnet acting CEO Chris Wells that very week, and would raise the PPPs in the ports issue with him. And his latest feedback to FTW reveals that Transnet is “quite simply working on a development framework for the port – and private sector involvement is quite certainly on the parastatal’s agenda. “These port developments require massive investments, and they would most definitely welcome private sector participation.”