TRANSNET: PRIVATE SECTOR PARTICIPATION NOT PRIVATISATION

In effect, the government is looking for help to bail Transnet out of a bad situation and to rebuild for a bigger and brighter future. Easier said than done, it is well known that while at government level there is recognition of the need for private sector investment and expertise at a grass roots level – the workforce – there is massive resistance to the idea. It thus basically remains to be seen if the concept will gain traction. Presently, indications are the process for enlisting private sector involvement is not moving with any real alacrity.

Switch to the rail sector, the other important arena of operations of Transnet, and there is also an indication here of the inherent reluctance of Transnet to engage with the private sector. The African Rail Industry Association (ARIA) has recently publicly stated that it has serious concerns regarding the restrictive terns and conditions Transnet has applied to use of the national rail network by private third-party freight operators.

The recently launched National Rail Policy incorporates as a key element acceptance of private sector investment and participation, and following on from this economic regulations that ensure fair regulated access to South Africa’s rail networks.

In the view of ARIA, however, the conditions for fair access have not been achieved and it cites a raft of reasons to back up this view. These include the reality that only two-year contracts have been offered (who would invest based on a two-year contract duration?), that operating slots are offered on a voetstoots basis, that Transnet has reserved for itself special ‘grandfather rights’ and that only a limited sector of the network is being made available with no transparency in fee calculation etc.

In summary, ARIA says: “This approach offers no long-term prospects for potential investors.”

Certainly not encouraging signs for private sector investment in Transnet ports!