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Transnet hopes to crowd in R100bn in private supply-chain investment

INVESTING IN RAIL Much of Transnet’s R312-billion investment plan will be directed towards its rail business

INVESTING IN RAIL Much of Transnet’s R312-billion investment plan will be directed towards its rail business

Photo by Picture by Chief Photographer Duane Daws

22nd August 2014

By: Kim Cloete

Creamer Media Correspondent

  

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Transnet is hoping to attract R100-billion from private investors to help streamline the transport system and make it more efficient, says Transnet Freight Rail (TFR) CEO Siyabonga Gama.

Transnet is investing R312-billion over the next seven years, much of it in rail. It is also turning to the private sector to help develop efficient and cost-effective supply chains.

“The private sector sits on the kind of cash we’d like to leverage,” Gama told journalists in Cape Town this month.

He said there were many opportunities, with investment in rapid loading facilities being just one of them, and funding a link to coal mines in the northern Waterberg region being another.

Transnet’s seven-year Market Demand Strategy requires TFR to shift rail-friendly freight traffic from road to rail. The fluctuating international oil prices, high carbon intensity and high costs of truck travel are driving demand.

Gama said it was vital to create capacity ahead of demand and grow both the rural and regional economies.

Following years of underinvestment, Gama said TFR had been upgrading its rolling stock fleet and infrastructure network. It had substantially upped its capital investment since 2005, with an eye on moving freight from road to rail.

“We’re working hard at modernising our fleet. We have 29 different kinds of locomotives and want to standardise them to four,” said Gama.

He said this had several benefits, including standardising spares and saving electricity, as the new dual-voltage locomotives would be far more energy efficient than the existing ones.

Gama said TFR planned to replace some of its ageing stock with 1 400 new locomotives within the next four years.

“We’ll also take the 20-year-old locomotives through midlife refits.”

The plan includes new wagons which will have greater carrying capacity and improved braking systems.

Gama said an important initiative was to replace branch lines, many of which had been abandoned in rural areas. TFR was hoping to attract private-sector investment for some of these.

TFR said it had identified 20 branch lines, including in Prince Alfred Hamlet and the George to Knysna line. Some of these could be developed for tourism.

Gama said other plans included upgrading the manganese line to the Port of Ngqura.

“Eighty per cent of the world’s manganese reserves are in South Africa. We can become more competitive in the market if we have the correct infrastructure.”

Unlocking economic opportunities in the North West province, as well as developing the Durban–Free State–Gauteng logistics and industrial corridor, was also on the radar.

Gama said he considered the biggest flows for growth from the Cape Corridor to be intermediate manufacturing, finished palletised goods and agricultural products.

TFR had made strides in upping its cargo load.

“We are making a very deep cut in terms of the container market.”

He said TFR handled around 150 000 20-foot equivalent units in 2005. This had shot up to one-million by this year, with 25.2% growth in 2013/14, compared with the previous financial year.

While conceding bottlenecks and delays in some areas, Gama said TFR was on an upward trajectory and had bold goals.

“By 2020, we could become one of the top five railways in the world,” he told journalists.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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