Ramaphosa 'directs Transnet' to sort out logistics crisis

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Transnet Freight Rail is suffering from deteriorating performance.
Transnet Freight Rail is suffering from deteriorating performance.
Photo: Andre Kritzinger
  • President Cyril Ramaphosa has stepped in to direct Transnet to get its operations in shape.
  • This was "a crisis" that had to be turned around, he said.
  • Ramaphosa wants rail reforms implemented.
  • For more financial news, go to the News24 Business front page.

President Cyril Ramaphosa has stepped into the crisis facing SA's logistics performance, in particular freight rail, and said on Tuesday that he had "directed Transnet to implement reforms swiftly and completely to turn around the crisis in South Africa's logistics system". 

The statement was issued on his behalf by presidential spokesperson Vincent Magwenya, following a meeting between Ramaphosa and the directors and top management of Transnet in Pretoria on Tuesday. 

SA's logistics state sector is on its knees, with freight rail performance plummeting yearly since 2018/19. This year, TFR is anticipating its worst operational results, having faced floods, derailment, excessive vandalism and theft, as well as poor maintenance. The rail sector, in particular, has put a brake on the growth of mining and forestry companies and limited foreign exchange earnings from exports. 

Large customers have been lobbying Ramaphosa's office to intervene for the past 12 months. Controversially, last year, the Minerals Council called for the dismissal of both group CEO Portia Derby and CEO of TFR, Siza Mzimela. 

READ | Transnet decline: Inside business' big battle for private rail

Ngwenya said that government had set out a clear policy direction for the freight transport sector in the White Paper on National Rail Policy, and in legislation such as the National Ports Act and the Economic Regulation of Transport Bill that is currently before Parliament.

During the State of the Nation Address last month, President Ramaphosa also announced that the government would develop a roadmap for Transnet to clarify the steps needed to address the crisis and outline a path for reform. 

This would include ensuring that sufficient rolling stock is available to increase the volume of goods transported by rail; upgrading infrastructure in rail and ports; addressing security challenges; and implementing reforms to enable private sector investment.

Ramaphosa said:

There is work under way between the various departments to finalise this roadmap, coordinated by Operation Vulindlela, and I would like this process to be completed as quickly as possible. We must remain focused on structural reforms to improve the efficiency and competitiveness of the transport sector in the long term. One of these reforms is to enable third-party access to the freight rail network by private rail operators while the network remains in the ownership of the state.

Operation Vulindlela is the project management unit in Ramaphosa's office which seeks to expedite reforms needed for economic growth.

While Cabinet has approved the National Rail Policy, it is not yet law. TFR has been slow to take advantage of its opportunities, issuing a limited offer to private companies to operate on the container corridor and auto export lines. More recently, it said it intended to concession the national container corridor for 10 years. 

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