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Jul 10, 2009

African rail operators should build capacity ahead of 
recovery, says SA utility chief

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Agriculture|Africa|CoAL|Eskom|Transnet|Waste|Africa|Power|Rail|Waste
Agriculture|Africa|CoAL|Eskom|Transnet|Waste|Africa|Power|Rail|Waste
agriculture|africa-company|coal|eskom|transnet|waste-company|africa|power|rail|waste
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Africa should not waste the opportunities the global economic crisis would present emerging economies, Transnet Freight Rail (TFR) CEO Siyabonga Gama said earlier this month, adding that it was simply not an option for rail operators on the continent to “wait out” the crisis.

Instead, they had to position themselves now by investing in additional capacity in order to play a role in the global transformation, Gama said at the AfricaRail conference, in Sandton.

He noted that, as a result of the global economic crisis, there was a shift in global economic power towards emerging markets.

While many of the world’s largest economies, such as the US, had seen a contraction in growth owing to the global financial 
crisis, some emerging markets, such as China and India, had continued to grow, albeit at a slower pace.

Emerging markets would represent about 35% of the global asset base by 2015, compared with just 6% in 1990, he said.

Africa should shift the focus away from its historic trade flows and more towards emerging markets and should further promote South–South trade, noted Gama, adding that this would set the continent up for longer-term growth.

He emphasised that rail operators on the continent also had to act as a catalyst for job creation and economic growth by actively growing trade at competitive costs.

This would attract foreign direct investment to the continent and also create space for new industries to be established.

Meanwhile, TFR still saw “pockets of growth” in its businesses, despite the economic slowdown in South Africa and abroad.


Thermal coal, containers and agriculture were three areas where it could expand in the years to come, said Gama.

TFR expected to increase the transport of thermal coal volumes by five or six times over the next five to seven years, owing to 
increased demand from Eskom.

It also expected to increase its market share in the transport of containers to over 50% in future. There was significant opportunity in this area, despite the overall decline in the use of containers on the continent as a result of the global economic crisis, said Gama.

Edited by: Martin Zhuwakinyu
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