The South African government is contemplating an economic rail regulator, as it believes this will ensure transparency and clarity of operations. Jeremy Cronin, deputy minister of transport, said that while the government had realised the value of a single state owned enterprise like Transnet and had moved away from its initial “slice and dice” policy of the early nineties for its parastatals, it was important to have a regulator to ensure it knew what was “happening in the country”. Speaking at the AfricaRail 2011 conference in Johannesburg last week, Cronin said a single stateowned enterprise allowed for the development of a strategic plan in an integrated way that was especially important in a country where the economic and industrial heartland was far from its ports and its global markets. “We need to create a balanced freight logistics system that is sustainable in South Africa. Transnet has been able to use the fact that it is in both ports and rail to crosssubsidise freight rail through its ports levies. And while we know it is not popular in the shipping industry, we understand the necessity of it and government is not against it,” he said, “but we do need it to be a more transparent process. We are steaming ahead with a rail regulator in the country to ensure that we know what is happening and we don’t have a situation where there is one player who is also the referee as that will have a distorted impact on our region.” Cronin said while it was necessary to have a rail regulator it was also important to know why one needed it. “If one takes the movement of coal from Mpumalanga to the Port of Maputo by Transnet Freight Rail as an example, it becomes clear why regulation is not necessarily bad,” he said. “They are improving turnaround times on the coal haulage drastically but are using a port that is not in our country. This in itself is not a problem, but we must be careful because if Transnet is using the levies from South African ports to subsidise its rail network and then favouring a port out of the country it can result in a problematic situation.”
