Yesterday’s announcement by President Cyril Ramaphosa in his State of the Nation Address (Sona) that Transnet would start the process of providing third-party access to its freight rail network from April 2022 by making slots available on the container corridor between Durban and City Deep in Gauteng (see related story “Ramaphosa commits to private participation in terminals”) has been welcomed by the African Rail Association (Aria).
In a press statement ahead of yesterday’s Sona, CEO Mesela Nhlapo said third-party rail access, which had already been touted by the president as part of his Economic Reconstruction and Recovery Plan, needed to be front and centre of his address.
“The government’s proposed structural reforms to the rail sector, which will see private rail operators operating on the country’s core rail network, will breathe new life into an industry which is currently under severe pressure,” Nhlapo said.
“The private sector wants to invest in new train sets, and we are ready to work with government on this. It is up to the Government to follow through on their 2020 commitment.”
Nhlapo says the opening up of SA’s rail network to private, fee-paying operators, will also create cost-effective gateways into Africa for South African goods through the African Continental Free Trade Area (AfCFTA). Just as trade across Europe has thrived through the European Union, Africa is expected to benefit similarly, but that will not happen without efficient and interoperated rail systems.
Multiple operators will generate additional revenues for Transnet that will be invested back into catch-up maintenance so that South Africa’s rail network can return to the source of global competitive advantage that it should be, she adds.
Business Unity South Africa (Busa) has reported that Transnet has announced an accounting exercise into the costing of its network to work out pricing for fee-paying private operator slots on the network by the end of March. In addition, a pilot project on third-party access is planned to take place by the end of 2022, Nhlapo says.
“The value of this move to the state and Transnet would be significant. Right now, we have a massive network with excess capacity, which could unlock significant incremental cash flows through access fees from private operators. The existing infrastructure requires no extra state investment, as the capacity is already there,” she says.
“In addition, our local supply base within the manufacturing environment will see a rapid turnaround as demand starts to increase for rolling stock.”
