State-owned logistics firm Transnet is currently a monopoly and has to find ways to engage with partners to improve operating efficiencies, logistics firm Imperial Logistics chief integration officer Cobus Rossouw said on Thursday, stating that it was one of the concerns the private sector had relating to Transnet.

Speaking at a Transport Forum meeting, in Johannesburg, he noted that this and other concerns would be included in Imperial, the Council for Scientific and Industrial Research and Stellenbosch University’s tenth State of Logistics Survey to be released in two weeks’ time.

Also speaking at the Transport Forum, Transnet Freight Rail (TFR) assistant to the CEO Molatwane Likhethe said the company acknowledged this so-called “monopoly”, explaining that Transnet had “started to embrace the concept of partnerships”.

“If we believed in this monopoly, we would be shooting ourselves in the foot,” he said, noting that TFR acknowledged that collaboration was needed to implement initiatives that had the ability to remain effective over the long term.

Likhethe added that TFR believed rail was a key enabler for the country and to take full advantage of this, partnerships were needed.

Meanwhile, Rossouw stated that the private sector was also concerned about the quantitative base of Transnet’s demand management strategy, pointing out that the numbers associated with this strategy could be a bit too bullish, which could lead to overinvestment.

“We are also concerned about the [strategy’s] expected cost of investment as the reality is that State investment in South Africa over the last ten years has not been managed well enough,” he said, referring to Transnet’s New Multi Product Pipeline, which had cost “significantly more than what was expected”.

Therefore, Rossouw said, the private sector was concerned that investing in State-run projects would mean spending more than what was initially expected or getting less for an investment.

Further, the private sector was also concerned about the operating capability of Transnet, he noted, adding that there also had to be a consequence for underperformance.

“The simple reality is that people will not do business with service providers if there is not a consequence of underperformance,” he said.

Meanwhile, pricing transparency was also important, Rossouw explained, suggesting measures such as factor-based increases, where part of a contract pertained to how prices would be increased yearly.

Further, the risk associated with operational variability also had to be addressed better, he said, and stated that “a way to share risk related to the future that is unknown” had to be found, or it had to be included in the price of the investment.