New minister of transport’s five targets a clear and encouraging vision

Minister of Transport Barbara Creecy last week gave five targets for the next five years when she spoke to the Council of Business Leadership South Africa last week.

She wants to increase rail freight, increase crane moves at the ports, increase Passenger Rail Agency of South Africa (Prasa) passenger journeys, increase the number of passengers at airports and increase air freight.

CEO of Business Leadership South Africa (BLSA), Busisiwe Mavuso, says in her weekly newsletter that this is a clear and encouraging vision for logistics reform.

“Minister Creecy brought a new level of focus and energy to the department that gives business confidence that we can make progress on dealing with our logistics crisis.” The minister addressed the BLSA Council last week and painted a remarkably clear vision for what she wants to achieve for the logistics system.

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Minister of transport’s five targets for next five years

First, she wants to get the amount of freight shipped by rail up to 250 million tons per year, a marked increase from the 149 million tons achieved in the last Transnet financial year. Mavuso says this would significantly exceed the record for freight volumes of 227 million tons set in 2015.

Secondly, Creecy wants to get port operations up to 25-30 crane moves per hour from the current average of 15-18. Mavuso says that improvement would remove the long lines of trucks waiting at ports and ensure ships do not sit waiting for port access for anything up to 10-15 days at a time.

“That would substantially reduce the costs for businesses across the economy and improve competitiveness.”

Thirdly, Creecy wants to get the passenger journeys of Prasa up to 600 million per year and Mavuso says that would be an enormous increase from the 40 million journeys last year.

Fourthly, she wants to increase the number of passenger visits at South African airports to 30 million per year and fifthly increase air freight to 1.2 million tons per year.

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War room at Department of Transport to improve efficiency

Mavuso says the minister then explained the work the department is doing to deliver on these targets. “At Transnet, a war room has been set up with user forums that can work directly with the state-owned entity (SOE) to improve efficiency.

“Performance has already improved to a run rate of 160 million tons per year. Part of the effort is the establishment of a private sector partnership unit to be run from the Development Bank of South Africa (DBSA) that will manage unsolicited bids to work on and manage Transnet’s infrastructure.”

The minister emphasised the importance of working with the customer, ensuring that goods from fruit to coal are managed appropriately, fitting the needs of users, Mavuso says. “She also highlighted the risks of competition, that Walvis Bay will compete for fruit traffic if Cape Town does not improve, while Maputo will compete for coal if Richard’s Bay does not.

“This acknowledgement of the positive impact of competition was welcome. I think we can take a lesson from that – how can we get competition going domestically, so that ports and rail lines can compete with each other, rather than only having to worry about ports in neighbouring states.”

She says one obvious way is to provide for further concessions of ports and rail. “Imagine Durban was competing with Richard’s Bay, instead of only worrying about what is across the border.”

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Clear appetite for transport to work with private sector, but…

However, Mavuso points out, that while there is clearly an appetite to work with the private sector and closely with customers as well as through partnerships to operate infrastructure, the minister pointed to many legal complexities.

“We hope that these complexities can be managed better to ensure smoother and faster engagement to get results as soon as possible.”

Good progress is also being made at Prasa, with the minister noting that 31 of 40 priority lines recovered so far and three more lines are due to be recovered by the end of this year. However, the remaining six are the toughest because they experienced the most theft of signalling equipment and even rail.

Prasa is also working on options to supplement its budget using its property portfolio and the potential of retail at its transport nodes. Again, this is highly encouraging, Mavuso says.

The minister also spoke about plans for major investment in air freight infrastructure, including at OR Tambo, where work that was stalled by Covid will now restart.

Mavuso commends Creecy for rapidly taking on one of the most challenging portfolios in government that has a very clear and immediate impact on our economy. “The speed with which the minister has taken on the task and the straightforward approach to setting targets and driving delivery is encouraging.

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Minister knows what must be done

“It is another positive signal from the government of national unity, adding to the sentiment that has been fostered by ministers ranging from home affairs to trade, industry and competition and others.”

She says she was struck by the clarity of the minister’s vision; what success looks like and clarity on what needs to be done.

“If the minister delivers, there will be a material improvement in the costs of doing business. Logistics is a critical component of competitiveness – no matter how good our manufacturing or mining sectors are if we cannot get goods to and through ports efficiently, we will not be competitive in global markets.”

Mavuso points out that fixing logistics would directly drive economic growth, creating jobs and revenue to improve the quality of life for all South Africans. “Organised business is an enthusiastic partner in the effort to do so, and I look forward to working with the minister to see her vision become reality.”