Spoornet focuses on supply chain efficiency

Export corridors take centre stage KEVIN MAYHEW TRANSNET HAS allocated the bulk of its R5,553bn investment in future core businesses to Spoornet for the 2005/2006 financial year, according to the parastatal’s group executive strategy and transformation, Pradeep Maharaj. Addressing industry leaders on Transnet’s turnaround strategy in Johannesburg last week, Maharaj said that reducing supply chain costs was the future focus. He made particular reference to the development of export corridors through the ports to create attractive railway transport for industrial clusters such as automotive, coal and steel actively involved in the international market. “While we have earmarked investment to sustain existing infrastructure and rolling stock, we are not doing it with a view to recapturing road freight that used to be rail freight,” he told the special meeting of the Chartered Institute of Logistics and Transport SA (CILTSA). “Our sights are set on South Africa competing with Brazil for markets in China and how we can make that sort of national priority trade happen in an international environment. In achieving that we will logically regain lost freight for which our routes are attractive,” he explained. Transnet had no aspirations to be the first choice of transport for short urban routes but saw its niche in demand for services over 200kms. Rail provided transport costing a third of anything similar to road over the longer distances, so a good railway service to central points and fed by road links to and from these hubs would make financial sense to local business. “However, we will only provide services that are consistent with an infrastructure that will be committed to corridors and clusters,” he added. Maharaj said Spoornet’s strategic corridor projects in the next five years included rehabilitation of its ageing locomotive fleet and the acquisition of 72 new locomotives for COALlink and Orex. Likewise, the rehabilitation of the wagon fleet (with an age of over 27 years) will be undertaken to meet projected demand. There will be expansion of various COALlink and Orex facilities to increase capacity, improve productivity and safety and, in the case of Orex, provide a rapid payback. Spoornet receives R2,587bn, National Ports Authority R1,727bn, SA Port Operations R895m and Petronet R344m in the first year of a five year plan during which over R46bn will be invested. The R5,553bn share of investments in these four entities compare with R1,85bn earmarked for investment in SAA (R853m) and R997m in other businesses the group will ultimately be shedding.