Transnet establishes strategic rail network unit
In a significant move aimed at revitalising South Africa's economic backbone, state-owned freight giant Transnet SOC Ltd. has established a dedicated unit to oversee its rail network. Termed an "interim infrastructure manager," this strategic development is part of the government's ambitious plan to usher in sweeping structural reforms within the sector. With a focus on fostering private sector investment, the policy aims to liberalise the rail industry, fostering collaboration between infrastructure managers and private train operating companies. Transnet's efforts come as the company seeks financial support from the government to address issues like vandalism, idle locomotives, and cable theft that have adversely impacted the nation's industrial growth. Amidst this backdrop, Transnet is charting a new path towards growth, with the promise of a more efficient and investor-friendly rail network on the horizon.
Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.
Transnet Starts South Africa Rail Reform With Key Unit Formed
By Paul Burkhardt
South African state-owned freight company Transnet SOC Ltd. established a unit that will manage and operate its rail network, a key step in reviving the utility's performance and opening up the market to private investors.
The creation of the so-called an interim infrastructure manager is part of a government policy to bring in "radical structural reforms in the sector that are intended to enable and facilitate private sector investment," acting Chief Executive Officer Michelle Phillips said in a statement on Wednesday.
"The policy aims to liberalize the rail sector by regulating rail infrastructure and providing private train operating companies with access to the freight rail network," she said.
Transnet is struggling to reverse a collapse that has hobbled economic growth in Africa's most industrialized economy. Volumes of goods and commodities, including iron ore and coal shipped through the company's freight rail network for export, have dropped because of issues including vandalism, idle locomotives and cable theft.
The company has requested a bailout from the state of about 100 billion rand ($5.3 billion) over the next two years. Finance Minister Enoch Godongwana may refer to the request in a mid-term budget policy statement he's scheduled to deliver later on Wednesday.
Last week, Transnet gave details of a plan to boost freight volumes throughout the network.
Transnet will also create a transport economic regulator to set prices for the sale of train slots and regulate the system between infrastructure managers and train operating companies, the company said on Wednesday.
Read also:
© 2023 Bloomberg L.P.