Rail and ports could receive welcome shot in the arm

State-owned freight and logistics company Transnet has been asked to nearly triple its capital expenditure plans to R330 billion, in order to increase the capacity of rail and ports.

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State-owned freight and logistics company Transnet has been asked to nearly triple its capital expenditure plans to R330 billion, in order to increase the capacity of rail and ports.

Speaking recently at the Southern African Railways Association (Sara) conference, Public Enterprises Minister Malusi Gigaba said President Jacob Zuma would make an announcement on fast tracking Transnet’s programme in his state of the nation address in February 2012, according to media reports.

An accelerated spend would affect the pace at which capacity could be increased on the coal, iron ore and general freight rail lines, and at the country’s ports. Transnet’s most recent annual financial results indicated it spent R21,5 billion on capital investment projects, of which R11,4 billion was invested in expanding the current infrastructure and equipment, while R10,1 billion was allocated for maintenance of existing capacity.

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Transnet’s rolling five-year plan has already been revised upwards to R110,6 billion, of which about 58,3% will be spent on rail to address the negative impact of ageing rolling stock and infrastructure on productivity. The rest will be spent on ports and pipelines.

Mike Asefovitz, Transnet Freight Rail (TFR)’s media manager, said it was too soon to speculate on how any additional funds announced by Zuma would benefit the agricultural sector. Only once the funding had been formally announced, would the allocation of funds within Transnet divisions be made known.

While iron ore and coal are generally first in line to benefit from investments, Asefovitz said TFR viewed agriculture and associated products as extremely important in terms of food security. “We will always look at means of improving our efficiency and services to this vital sector,” said Asefovitz.

“In terms of improving infrastructure in rural areas, there is a branch line strategy in place and announcements about the scheme will be made at the end of the year as regards the first three successful concessions for the branch lines. This will definitely lead to an improvement in infrastructure in rural areas. We are of the firm belief it will unlock great value and potential in rural areas.”

Boikanyo Mokgatle, Chamber of Milling acting executive director, said there had been little movement in improving services to the wheat and maize sectors. “The grain industry met Transnet last year in August. It was a positive meeting and it opened dialogue to see if it can increase the current volume of grain being transported by rail. This has decreased dramatically over the years. In the 1980s, close to 80% of grain was transported by rail. Today it is less than 30%.”

Mokgatle said the industry had requested statistics from Transnet to indicate grain tonnages transported by rail. “We need to know what the starting point is, if the idea is to increase rail capacity. We haven’t received that since the meeting and there has not been much follow-up. One of our priorities is to meet Transnet CEO Siyabonga Gama and see how grain fits into Transnet’s plan.”

Transnet recently reintroduced a fixed schedule timetable to improve transport efficiency of all goods, including agricultural ones. Transnet is acquiring new cranes in May to improve port efficiency and completed upgrading the second of four berths at the Cape Town container terminal. Transnet has also set aside R1,5 billion to buy the old Durban airport site, which it plans to convert into a container port.

Department of Transport director-general George Mahlalela told delegates at the conference that railways had a vital role to play in enhancing vibrant economic production and trade. “However, daily challenges include insufficient and declining capacity leading to failure to cater for growing demand; poor maintenance of infrastructure and equipment; inefficiency of railways and failure to adapt to technological developments,” Mahlalela said. – Robyn Joubert