Transport Minister Barbara Creecy's initiative to involve private sector partnerships in South Africa's struggling rail and port infrastructure has received enthusiastic support from Western Cape officials, who project it could create 20 000 jobs and boost exports.
Image: File
The government's plan to collaborate with the private sector to boost operations at the country’s struggling rail and port systems has been cautiously welcomed by trade federation COSATU.
But the trade federation warned it would keep a close eye on job creation and ensuring the assets remain in the state’s hands.
Transport Minister, Barbara Creecy, has announced that together with Transnet, the government received numerous unsolicited proposals from the private sector offering investment, skills, and expertise to support the rehabilitation and reform the struggling rail and port systems.
She said this as she launched a Request for Information (RFI) at the weekend, to transform the sectors through partnerships with the private sector.
"As you are all aware, South Africa’s rail and port infrastructure faces substantial challenges, including declining performance; theft and vandalism; under-investment, and operational inefficiencies. All of these hinder trade and economic growth.
"The Roadmap for The Freight Logistics System in South Africa clarifies that strategic infrastructure such as rail lines and ports will remain in public ownership, as assets belonging to South African people.
"At the same time, it paves the way for greater competition in rail and port terminal operations, which will attract private investment and improve our infrastructure to world-class standards. In this context, I believe that the efficiency of the logistics systems is integral to the functioning of all economies," said Creecy.
Matthew Parks, COSATU Parliamentary co-ordinator, said for years they have been deeply concerned about the state of Transnet and the safety of job opportunities, but also hoped that the private sector would assist in boosting employment.
“It (Transnet) transports less goods today than it did in 1994 when the economy was half its current size,” he said.
“It is urgent that the government actively intervenes to get Transnet Freight Rail and Ports fully operational.
“This is key to saving those jobs but also saving and creating jobs in the mining, manufacturing and agricultural sectors.
“A productive Transnet is key to generating tax revenue needed to fund the state.
"To put it simply, workers cannot afford for Transnet to fail.
“Whilst COSATU doesn’t support or believe privatisation is the panacea to our problems, it is critical that the private sector investment strike is tackled and overcome to help unlock economic growth and jobs.
“We will continue to engage the minister to seek assurances that Transnet will remain a state-owned enterprise and that the jobs and conditions of its employees will remain safe,” said Parks.
The decision by Creecy has been met with enthusiasm from Premier Alan Winde, Mayor Geordin Hill-Lewis, mayco member for Economic Growth James Vos and Ivan Meyer, Western Cape MEC for Agriculture, Economic Development and Tourism.
Winde said the Western Cape Government, through its Growth For Jobs strategy, aimed to triple exports to R450 billion and increase private sector investment to 20% of the province’s GDP.
“To achieve this, we must have fully operational harbour's to drive economic growth and job creation,” said Winde.
Meyer said the potential was significant for exports and imparts and job opportunities.
“The Western Cape's agricultural exports, currently constituting 55% of South Africa’s primary agricultural exports, have the potential to create 22 900 new jobs in the region through a 5% increase in exports," he said.
The mayor agreed: “‘There is huge potential for job-creating economic growth if we can establish our port as a regional shipment hub of choice and turn its reputation around as one of the worst in the world for inefficiency. We are encouraged by the government's short deadline of August 2025 to enter into the formal procurement phase for private partners, and the Development Bank of Southern Africa’s involvement in setting up the coordinating unit to get private partnerships done. We must make sure these timelines are not delayed.”
Vos said major infrastructure investment is needed to reduce the impact of wind on port operations.
“When the port is unable to operate sufficiently, exporters are forced to divert their goods to other ports in Durban, Gqeberha and elsewhere at huge costs. The private sector has the services and the expertise and have shown they are willing to assist as much as possible. We will be closely monitoring the RFI process, which we hope will lead to the full-scale joint running of the Port with private partners, as well as a major infrastructure investment boost. The City stands ready as a partner to expedite any infrastructure investment within our local government purview.”
Cape Argus
