Transnet targets R70bn freight business by 2020

Transnet has the potential
to grow its freight solutions
business from R46 billion a
year to R70 billion a year by
2020, provided it is agile,
digitalised and responsive to
customer demands.
This is according to Transnet
chief customer officer, Mike
Fanucchi, who was speaking at
the inaugural Transnet Indaba
held over two days at the
Esselen Park School of Rail in
Johannesburg.
Fanucchi explained the
increase would come from
key projects, with Transnet
prioritising various freight
solutions – advanced
manufacturing, infrastructure
and spatial solutions,
digitalisation and the liquids
and gas industry.
While coal is currently a
lifeline business for Transnet,
with 70-80 million tonnes
exported annually and another
100-odd million tonnes moved
across South Africa, it expects
gas to become a bigger factor
in the country’s energy mix,
which could comprise 25% by
2030. In response, Transnet is
developing a Liquefied Natural
Gas network to provide the
necessary infrastructure to
bring energy into the country.
Transnet Group chief
executive, Siyabonga Gama,
said the development of crossborder
logistics was crucial to
the entity, adding there were
opportunities in both narrow
and standard gauge in which
the company could leverage its
core competencies.
Transnet International
Holdings has been established
to enable
Transnet
to double its
cross-border
rail volumes
by 2023, to 10
million tonnes.
Twenty-four
projects have
been identified
in this regard.
The Maputo,
North-South
and East-West
transport
corridors are to
be prioritised.
He explained that Transnet
was looking to extend its
footprint and grow the number
of services in the countries
where it already had a presence.
Gama said Transnet
was supplying the National
Railways of Zimbabwe with
locomotives and wagons
and was upgrading its
infrastructure. “We will also
be recapitalising the Zambian
Railways, working closely
with ZRL (Zambia Railways
Limited). Transnet will supply
locomotives and more than
1 000 wagons, perform various
upgrades and encourage a
maintenance philosophy.”
In Nigeria,
Transnet would
provide six new
locomotives
and 120
wagons and
help revamp
3 900km of
railway line
as part of a
consortium
led by General
Electric and
including APM
Terminals and
Sinohydro.
In Kenya, Transnet will
operate three berths at
the Lamu port, which are
currently under construction.
“This is purely an operations
management contract and we
are also working on projects in
Senegal and Tanzania, while
rolling stock projects are under
way in Gabon and Angola.”
According to Gama,
Transnet will diversify and
take advantage of niche
activities and services driven by
digitalisation in warehousing
and distribution. “We must
play an important role
from pit to port. We are
looking at asset-light
opportunities where
large investments
are not required,”
he said.
“Smart freight
systems are emerging
and lots of data
is being
produced.
We need
to use it
positively.
Fundamental and radical
reduction in costs will have to
be made and passed onto our
customers.”
Gama said South Africa
should aspire to become the
10th most competitive country
in the world in terms of
logistics within the
next five years.
INSERT & CAPTION
We are looking
at asset-light
opportunities where
large investments are
not required.
– Siyabonga Gama