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State-owned freight, ports and logistics company Transnet has already embarked on a programme to open its rail network to the private sector by selling rail slots to third parties or private sector players and has also contracted with a Philippine ports operator to run the Durban container terminal.
Transport Minister Barbara Creecy wants to extend private sector participation in SA’s rail network. To achieve this goal, she plans to establish a dedicated unit in her department to pursue this goal.
State-owned freight, ports and logistics company Transnet has already embarked on a programme to open its rail network to the private sector by selling rail slots to third parties or private sector players and has also contracted with a Philippine ports operator to run the Durban container terminal.
Creecy emphasised that it was crucial to move freight from road to rail, but Transnet had certain constraints. The question was how to deal with these constraints appropriately and how it could be achieved more effectively by including other operators. Third-party operators would also be involved in infrastructure development. This would be the focus of the PSP unit.
On devolution of passenger transport to provinces and metros — a long-standing demand of the Western Cape government and the Cape Town metro, Creecy noted that a key question was affordability. It was also not desirable to have separate state-owned passenger operators in all nine provinces. The department had developed a draft devolution strategy but she needed to study it and it was too early to say whether she would commit to devolution.
In her budget vote speech in a mini-plenary of the National Assembly on Monday, Creecy revealed plans to create a private sector participation (PSP) unit. This unit would have the necessary skills and expertise in the design, negotiation and contracting of projects to seek private-sector involvement. Its primary objective would be to identify suitable areas for private sector participation in rail and ports.
The framework for private sector participation was approved in December 2023. Before her address, Creecy told a media briefing that the unit would be calling for expressions of interest from the private sector.
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Third-party involvement would not be confined to the branch lines that have already been opened to the private sector but it was too early to identify which ones would be offered. She said the private participation in energy generation indicated what was possible from this type of operation in the transport sector.
