Spoornet hikes will put general freight on a commercial footing

Alan Peat
SPOORNET HAS just hammered the agriculture and food industries with whopping tariff increases on its general freight business (GFB) services.
With only five days notice to customers, and imposed April 1, the cost of transporting sunflower seeds went up by 67%; bran and meal flour 50%; oil cakes 20%; maize and wheat (of which the railways move 4.5-million tons a year) and barley 15%; and molasses 12%. The rate hike also includes maize railed to harbours for export.
This will have a cascade effect on the price of staple foods, according to producers, which have already seen the price of maize, for example, doubling in the last year - largely thanks to huge demands from maize-poor countries to the north.
The over-inflation rate hike on the railways has also been challenged by economists, who point to food price increases in the past year having played a significant part in bumping up the SA inflation levels. This so much so, that the SA Reserve Bank's hopes to see inflation for 2002-03 held within the 3%-to-6% range currently appear to be thwarted.
But, Spoornet spokesperson Mike Asefovitz told FTW, it was either hike
the rates or see GFB run
at an enormous loss.
"For years," he said, "most of the commodities in our GFB have been running at a loss and cross-subsidised by taking profits from the coal link and Orex.
"These new rates will help to put general freight on a commercial footing, and allow us to start putting money back into
it to make sure our equipment availability and service levels are correct."
And, Asefovitz added, it's certainly nothing to do with feathering the GFB nest before privatisation as some of the press have reported.
"GFB is not part of the privatisation scheme, but will stay in the Spoornet stable," he told FTW.
Spoornet has joined four other parastatals in increasing its tariffs by above inflation rates, the others being Portnet, Eskom, Telkom and the SA Post Office.