Cabinet approves framework to allow third-party access to rail network

Cabinet has approved a framework that will allow the private sector to take part in the rail network. File Picture: Dineo Faku / Independent Newspapers

Cabinet has approved a framework that will allow the private sector to take part in the rail network. File Picture: Dineo Faku / Independent Newspapers

Published Dec 11, 2023


Minister in the Presidency Khumbudzo Ntshavheni says the approval of the Freight Logistics Roadmap by Cabinet will start the process of fixing the rail network and ports in major cities.

She said they want to address challenges in the freight logistics sector, which pose a threat to the economy.

Already, manufacturing and mining are under pressure as they are beginning to shed jobs because of the crisis.

The congestion in Durban and Richards Bay had led to delays in the delivery of cargo and the shipment of export products.

There were thousands of containers that were stuck at sea in the two coastal towns of KwaZulu-Natal and the port of Cape Town for several weeks.

But Transnet announced recently that the Cape Town port was cleared, and the Durban and Richards Bay ports were also being cleared.

President Cyril Ramaphosa even visited KwaZulu-Natal a few weeks ago, where he met with management and said he wanted all the issues to be resolved by early next year.

Ntshavheni, who was briefing the media on Monday, said Cabinet also approved the Draft Rail Private Sector Participation Framework (PSP) that will allow for third-party access to the rail network.

Ramaphosa has said that allowing third parties access to the rail network will improve the performance of Transnet.

Transnet recently received a R47 billion bailout from the National Treasury to support its recovery plan and meet its debt obligations.

Ntshavheni said the Rail Private Sector Participation Framework will allow private companies to start by fixing the rail network.

“Given the current challenges within the railway infrastructure, the Rail PSP Framework proposes the commencement of private sector participation through opportunities that are aimed at fixing the railway infrastructure first.

“With the approval of the Rail PSP Framework, the Department of Transport will establish a PSP unit that will identify and prioritise projects and develop an implementation plan to facilitate PSP initiatives,” said Ntshavheni.

Ramaphosa raised the issue of third-party access in the last few years and said this will boost the performance of Transnet and contribute to economic growth.

Public Enterprises Minister Pravin Gordhan has said the volumes on the rail network had declined from 226 million tonnes to 149 million tonnes a year, and this had a negative impact on Transnet’s balance sheet.

Transnet announced last month the establishment of an interim infrastructure manager to operate and maintain the rail network following the decision of Cabinet early this year.

Transnet said this was part of the reform of the rail network, which will lead to the opening of the rail network to third parties by April next year.