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Aug 07, 2014

Transnet Freight Rail signals bold plans for growth

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TFR CEO Siyabonga Gama
Photo: Duane Daws
TFR CEO Siyabonga Gama
 
 
 
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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’s 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.

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 were driving demand. 

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

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

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

He said this had several benefits, including standardizing 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 mid-life refits.”

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

Gama said an important initiative is 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 percent 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 North West province, as well as developing the Durban-Free State-Gauteng logistics and industrial corridor were 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 has made strides in upping its cargo load.

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

He said TFR handled around 150 000 TEUs (20-foot equivalent units) in 2005. This had shot up to 1-million by this year, with 25.2% growth in 2013/2014 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.

He said there had been a shift in mindset at Transnet.

“We are beginning to attract a cadre of people that ten years ago would not want to work at Transnet. We want to become an employer of choice.”

Edited by: Creamer Media Reporter

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