Transnet spells out international diversification strategy

Transnet is setting up
Transnet International
Holdings (TIH) – a new
subsidiary to operate port, rail
and pipeline infrastructure in
Africa and the Middle East.
Its target is to earn 25% of
its income from outside SA
by 2025.
While Transnet’s current
overborder activities are
mostly rail services in other
states in the Southern
African Development
Community (SADC), it
intends to offer port and
pipeline services, as well
as targeting rail contracts
elsewhere in the continent.
It is also aiming at Transnet
Engineering marketing
engines and rolling stock
across the continent.
Transnet has already signed
five interport agreements
with Ghana Ports Authority,
Namport, Maputo, Kenya
Ports Authority and Port
Corporation of Sudan.
It has also signed a
pipelines memorandum of
understanding (MOU) with
Botswana Oil, to cooperate
on oil and gas initiatives in
Botswana.
It’s all part of developing
what Transnet spokesman
Molatwane
Likhethe
described as
the company’s
“diversification
strategy”. And
it planned to
establish TIH
as a special
purpose vehicle
to execute its
geographic
expansion
strategy.
“Under
the approved
Africa strategy,”
Likhethe added, “Transnet has
a long-term vision to create an
integrated freight system in
the region.
“Initially our focus will
be on opportunities in East
and West Africa, specifically
looking at port and rail
opportunities to provide
connectivity to coastal and
hinterland countries within
our target areas.”
According to press reports,
most of the work is likely
to involve
training and
consultancy
contracts,
but it could
also bid for
operating
concessions.
However,
Likhethe
described
the scope of
opportunities
under
consideration
as “very broad”
– ranging
from advisory work through
to design, build, operate and
transfer concessions in the
logistics space.
Transnet was also seeking
to improve operational skills
on the continent by creating
spaces for African students in
its various technical schools.
“Our efforts thus far
have seen a significant
improvement in cross-border
rail volumes and participation
in regional ports,” Likhethe
said.
“For example, we have
entered into a five-year
management contract with
Sobemap, the state-owned
port operator in Cotonou,
Benin.”
Through this contract,
Transnet has deployed fulltime
resources to assist with
upgrades to their container
yard; implementation of a
dedicated terminal-operating
system; and providing training
to the Beninese workforce.
“This underlines our
commitment to the
development of not only
infrastructure but also
building of capacity,” said
Likhethe, “thereby creating a
sustainable workforce for the
medium to long term.”
INSERT AND CAPTION
Initially, our focus will
be on opportunities
in East and West
Africa, specifically
looking at port and
rail opportunities.
– Molatwane Likhethe