Business formation Business Unity South Africa (Busa) backs third-party rail freight access with the aim of supplementing State-owned Transnet’s capacity, as a necessary structural reform that will contribute to a strengthening of the logistics network, Busa CEO Cas Coovadia said on November 18.
The endorsement by Busa aimed to contribute to the South African Economic Reconstruction and Recovery Plan by allowing third-party access to the South African rail system to help migrate freight volumes from the road to rail and stimulate broader economic growth.
African Rail Industry Association (Aria) CEO Mesela Nhlapo said early projections by Aria suggest that additional parties using the rail network would create numerous upstream jobs by enabling industry to become internationally competitive.
Similarly, rail corridors into Africa would create cost-effective gateways to take South African goods into these markets.
“The government’s proposed structural reforms to the rail sector, which will see private rail operators operating on the country’s core rail network, will breathe new life into an industry that is under severe pressure. Importantly, no new regulation is required to enable third-party access. Regional trading partners have already moved to this model, supporting interoperability and regional trade for pan-African operations,” she said.
Third-party rail access to the South African rail network will mean that millions of tons of freight could be moved off the roads of the country and onto a faster, cleaner transport system. Third-party operators would pay access fees to Transnet, similar to a toll fee, for the use of the rail system, said Coovadia.
"So far, this is yet another example of economically sound intentions, but significant delays in implementation.
"We urge government to follow through on the President’s intention and enable third-party operators as soon as possible. This is critical in enabling a sustained economic recovery as we seek to emerge from the pandemic-induced economic shock,” he said.