TFR aims for 30% domestic transport share

Transnet Freight Rail
(TFR) has set its
sights on increasing its
domestic rail market
share by a minimum of 30%
in three to five years – and has
reiterated that it can generate
its own funding.
“TFR can stand on its
own two feet and fund its
own business development
without support from other
Transnet divisions. Even global
credit ratings agencies such
as Moody’s have recognised
that we operate our railways
infrastructure and freight
services at a profit,” Nyameka
Madikizela, TFR executive
manager of international
business, told delegates at a
joint FTW/JCCI breakfast
briefing around the railway
operator’s road to rail migration
strategy.
She was responding to
transport economist Andrew
Marsay’s presentation during
the briefing, showing that
generic road to rail policies had
not proven effective globally
in migrating road to rail.
He further highlighted that
funding for TFR’s strategy
was heavily reliant on crosssubsidisation
from the Transnet
group as a whole, specifically
Transnet National Ports
Authority (TNPA).
Marsay suggested that
instead of focusing on growing
its general freight business,
TFR should focus on “what
it does best” by growing the
coal and ores business and
looking to attract private sector
investment in that.
But Ian Bird, a rail logistics
consultant who was extensively
involved in the launch of
Barloworld Logistics’ rail
division, disagreed with Marsay
pointing out that he saw no
reason why the same strategic
thinking TFR had used in its
coal and ores businesses could
not be applied to other business
sectors.
He added that TFR was
aware of some of the challenges
highlighted by Marsay but
that there had been “massive
changes” in the operator’s
structure recently to be able
to effectively deal with them.
Bird commented that
it was clear TFR wanted
to divest itself of certain
operations and that it was
“difficult to see the economic
rationale” behind these
strategies but that there were
opportunities for “cherry
picked” investments as well
and potential investors
just had to look at every
opportunity strategically.