Transnet Starts South Africa Rail Reform With Key Unit Formed

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 November 1. 

“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.

Read more: Transnet Gives Up on Chinese Rail Deal, Plans New Tender

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 November 1. 

In October, 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 November 1.

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• Source: https://www.supplychainbrain.com/articles/38414-transnet-starts-south-africa-rail-reform-with-key-unit-formed