The Transnet Network Statement, approved for publication by Minister of Transport Barbara Creecy in late December, has sparked a mix of optimism and concern. Picture: Armand Hough/Independent Newspapers
The Road Freight Association (RFA) has called for closer scrutiny of the recently published Transnet Network Statement, urging a thorough examination to determine if Transnet can create an effective and efficient operational environment for third-party operators on the country's rail network.
With the logistics utility being at the core of South Africa’s transport infrastructure, the RFA is calling attention to the necessity for confidence in Transnet’s ability to handle a surge of rail traffic amidst the demands of the national logistics chain.
The Transnet Network Statement, approved for publication by Minister of Transport Barbara Creecy in late December, has sparked a mix of optimism and concern.
RFA CEO, Gavin Kelly, yesterday emphasised the need to scrutinise several factors that could impact rail efficiency, including signalling systems, rail mass carrying capacity, sidings, warehousing, and security infrastructure.
“Are the train sets adequate - or will these all need to come from the third-party operators? Who will adjudicate and resolve disagreements between these third-party operators or between them and Transnet itself?” Kelly asked.
“Are we about to see great things – or are we doomed onto a circle of argument and squabbles by various potential third-party operators as recently seen at the Port of Durban?”
The RFA encouraged all companies that could become a third-party operators to study the Statement and to engage with the Department of Transport in getting rail operations back to a viable and efficient service.
In a statement, Business for South Africa (B4SA) said the Transnet Network Statement represented a pivotal step in unlocking the potential of South Africa’s rail network through third-party access, which is one of several ways identified to bring private sector participation into the system.
B4SA said other options such as concessions allowed private operators to manage sections of the network and might involve different cost structures for logistics users.
It also highlighted the importance of leveraging private sector resources to enhance infrastructure without impacting Transnet’s balance sheet.
Ian Bird, B4SA transport and logistics senior executive, said the rapid establishment of the Private Sector Participation (PSP) Unit within the Development Bank of Southern Africa was an essential step to effectively manage diverse private sector participation processes.
“For now, B4SA remains focused on ensuring the reform process is robust and inclusive, and ultimately delivers the efficiency and competitiveness needed to unlock South Africa’s economic potential and create much needed jobs,” Bird said.
In its response to the Statement, the African Rail Association (ARIA) said South Africa cannot afford to not undergo reform and needed to take every opportunity that it can get as the private sector are ready to invest, but the conditions needed to be right.
ARIA has recommended a tariff make-up to initially move from 19.79c closer to 6c, that the Electricity Charge of Infra and Supply be removed from the base tariff, that the government to assume the State Capture associated debt of R60 billion with no value to this debt, no economic advantage, passed on to Operating Companies and ultimately freight owners and economy.
ARIA stressed that the government should address the maintenance backlog that occurred under the government monopoly and should also implement vertical and horizontal separation to promote private sector investment into the rail infrastructure.
Meanwhile, Bird said there had clearly been a lot of work put into the final Network Statement, with tiered pricing that has been globally benchmarked.
“The outcome is a commercially responsible approach that is palatable for industry and supports the country’s road to rail strategy,” Bird said.
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