Transnet forging ahead with reforms

Transnet says it is making “considerable progress” in the implementation of reforms in accordance with the Freight Logistics Roadmap and the Guarantee Framework Conditions issued to Transnet by National Treasury.

The reforms include the reform of Transnet’s rail business, corporatisation of the Transnet National Ports Authority (TNPA) and the disposal of the company’s non-core assets.

Transnet Group Chief Executive, Michelle Phillips, said: “These initiatives are a demonstration of Transnet’s commitment to the structural reforms in response to the changes in policy and regulations. In some cases, these changes entail entry of third parties in the rail and port networks, which is a necessary step to stimulate competition and address long-standing challenges such as underinvestment.”

Rail reform

Transnet said the rail reform process is on track.

This includes what the company calls the “vertical separation of Transnet Freight Rail (TFR) into a Rail Operating Company and an Infrastructure Manager”.

“Since the publication of the draft railway Network Statement in March 2024, Transnet actively participated in a consultation process facilitated by the Interim Rail Economic Regulatory Capacity (IRERC). This was in preparation of the finalisation of the final Network Statement to open train slots for third party train operator access.

“Following extensive consultations to align with key stakeholders, the Interim Infrastructure Manager has made the input to the IRERC, and Transnet looks forward to the publication of the final network statement and proposed tariff methodology to open slots for third party access by 30 September 2024,” Transnet said.

According to Transnet, the Rail Operating Company and Infrastructure Manager operating models, and organisational designs are expected to be finalised in the first quarter of 2025.

Non-core assets and TNPA

The corporatisation of the TNPA is expected to culminate in the establishment of the National Ports Authority, which will be wholly owned by Transnet.

Work is underway to complete the Memorandum of Incorporation and the Registration of the National Ports Authority.

“The reform will enhance TNPA’s regulatory oversight on terminal operators across its port network. The corporatisation will establish TNPA as a financially autonomous entity capable of generating its own revenue, attract increased investments to improve the efficiency and positioning of SA ports to enhance competitive maritime trade and create appropriate partnerships.

“It will also, through its independence, enhance terminal licence oversight and align with international standards and regulations governing port authorities and ensure compliance with South African maritime and port regulations,” Transnet explained.

Furthermore, the company said its disposal of non-core assets is also progressing well.

“The disposals will generate cash and reduce holding costs. The Transnet Board of Directors has approved a plan for the disposal of the non-core assets. Transnet will finalise the full list of non-core assets for disposal in the current financial year,” the entity said.

This article originally appeared on SA News. Read it here.

Photo by Leonardo Ventura on Unsplash

Further reference:

• Over 60% of all GDP generated in South Africa involves imports and exports to some degree, making the local economy heavily reliant on global trade (Lings, 2024). And on Transnet!
• Relevant Agribook pages include “Exporting“.