South Africa, in its latest effort to enlist corporate know-how to kick start economic growth, approved a blueprint for opening access to the nation’s vast rail network to private operators.
Transport Minister Barbara Creecy put the plan into effect by agreeing to publish the document outlining how the process will work in the government gazette, her department said on Friday.
The 162-page network statement, developed with state-owned logistics operator Transnet, lays out a comprehensive overview of the 21 232-kilometer (13,270-mile) freight network, alongside access conditions, capacity allocation and pricing.
“This gives rail operators a clear understanding of the terms and conditions for accessing the rail network,” Creecy said.
“In allowing third-party access, it is critical to emphasise that rail infrastructure is a strategic asset and its ownership will remain in the hands of government.”
The effort to enlist private-sector expertise is part of a broader government push to fix failing state-run enterprises that have snarled logistics and caused blackouts, triggering a decade-long underperformance of the South African economy.
Under the current plan, Transnet will review applications for rail use between now and March with train service operations expected to begin in April and run for a year.
The network statement will be revised annually.
The company said the scale of investment needed to upgrade the network was beyond its means and it “urgently seeks fiscal support to address these underlying issues, stabilise the rail network and bolster economic growth.”
The Transport Ministry said Transnet had applied to the Treasury for a budget facility.
Voter anger over poor services cost the African National Congress its parliamentary majority in May elections, forcing it into a business-friendly coalition to stay in power.
The so-called government of national unity says lifting growth is its key goal and there are some early signs of progress.
State-owned electricity utility Eskom on Thursday announced a planned return to profitability in the current financial year for the first time since 2017.
That brighter outlook reflects a clear improvement in performance that has spared the country scheduled power cuts for almost nine months, after years of being an almost-daily occurrence.
Poor performance by South Africa’s freight-rail services had increased iron-ore stockpiles at mines and cut coal railings to a 30-year low, forcing producers to switch to truck transport that jammed roads and ports.
For Transnet, a year into a turnaround strategy, the release of the document represents a “significant milestone” toward rail-sector reform, Business for South Africa said.– Bloomberg.
