Transport Minister Barbara Creecy has emphasised the economic advantages stemming from a new public-private partnership with train operating companies.

This initiative will enable these companies to access the freight infrastructure of state-owned enterprise Transnet, which has long faced challenges in meeting its freight targets.

During a question-and-answer session in the National Assembly, Creecy addressed concerns raised by ANC MP Christopher Malematja regarding Transnet’s struggle to achieve its goal of transporting 250 million tonnes of freight per annum.

The minister said one of the factors that are inhibiting Transnet from reaching the target of 250 million tonnes of freight per annum was a shortage of rolling stock and locomotives.

Creecy announced that Transnet has extended invitations to third-party participants to utilise five priority freight corridors that transport bulk minerals, including the crucial general freight corridor connecting Gauteng to Durban.

“The intention is to increase the amount of freight that is carried on the Transnet network, and that obviously benefits the country in the sense that we are currently underperforming in terms of appetite from the private sector to move freight on rail.

“It also assists the country, because it assists us in moving freight off the highways back onto rail, which assists us in terms of condition of the road network, and also, of course, road safety,” she said.

Questions from MK Party MP Siyabonga Gama raised concerns about the financial viability of the 11 train operating companies and the volume of cargo required for them to break even. 

In her response, Creecy clarified that each company must assess its own operational sustainability, indicating that Transnet is not in a position to dictate financial break-even points or uniform access fees.

“Each train operating company is therefore responsible for assessing its own commercial sustainability and determining the financial break even point applicable to its operations.”

She also said the tariffs to be charged by Transnet will be determined by the Transport Economic Regulator, which will develop a rail tariff regulatory methodology as one of its priorities.

The board of the Transport Economic Regulator was appointed on 13 September and published in a gazette on 24 October.

According to Creecy, Transnet envisaged that over a two year period, the companies collectively could add an additional 20 million tonnes of freight per annum to the total volume of freight that is carried on the Transnet network.

“These companies definitely believe that it will be possible for them to make money and add to the total amount of revenue.”

In response to a question from DA MP Chris Hunsinger about whether the train operating companies would be allowed to maintain the infrastructure they use, Creecy clarified that no such requests had been made.

She said a request for information has been put out for private sector companies that would be interested in investing in the infrastructure in the five priority corridors.

“Our view is that there was a lot of interest in that. We received 163 responses. We hope to put out the first request for proposals before the end of the year and three more early in the year.”

Despite concerns about the deteriorating state of rail infrastructure and questions around the capacity of the state to maintain it, Creecy reaffirmed that Transnet has invested significantly in maintenance efforts.

The Department of Transport, Creecy noted, has also secured R8.3 billion in equity through the Budget Facility for Infrastructure to support investment on infrastructure maintenance.

“We do envisage that the Transnet network can carry higher volumes of freight than it is currently carrying at the moment.

“We reckon we are averaging somewhere in the region of about 174.4 million tonnes of freight per annum,” she said, adding that there was no intention for the privately-owned train operating companies to become state operated companies.

mayibongwe.maqhina@inl.co.za

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