Transnet slow to achieve third-party access as only one slot sold

Transnet’s interpretation of private third-party rail freight access is deeply flawed, said industry body African Rail Industry Association (ARIA) in criticism of Transnet. To date, only one successful application bid has been approved. namely, Cape Corridor’s Kroonstad to East London slot that was successful bid on by Traxtion, the association said.

This proves that the process is not working as intended, ARIA says.

Last week, the state-owned entity’s freight rail division confirmed that only two bidders had participated in its auction of slots to private entities.

ALSO READ: Transnet begins selling key rail slots on strategic routes to third party operators

16 slots made available

Earlier this year, Transnet announced that 16 slots were available to private operators.

“These slots were to be sold on a two-year basis; Transnet would retain grandfather rights on the lines; slots were made available on a ‘voetstoots’ basis and a phased implementation of the private slots to only limited sections of the network would be implemented,” the association said in a statement.

“This is exactly what we warned would happen,” lamented ARIA CEO Mesela Nhlapo. “Transnet is not interested in transformation if only one big company was successful in its third-party bid.”

Only 18 companies showed interest

 “It has been eight months since Transnet announced its intention to allow private freight operators onto the rail network. Only 18 companies showed interest. Two applied for the third-party access and only one was successful. This proves that Transnet’s onerous terms and conditions are not appealing to private investors.”

“The fiscus keeps losing billions because Transnet will not follow the guidelines of the National Rail Policy which was developed over a 14-year period of extensive consultations,” she continued. Nhlapo said reform can only happen in a balanced way through proper consultation.

NOW READ: Rail industry welcomes National Rail Policy, but Transnet’s approach has ‘no hope of success’

“The National Rail Policy stipulates that third-party access should happen in a way that promotes investments and creates an equal level playing field for all players in the industry. Transnet’s approach to third-party access means that there will be no private investment into South Africa’s rail network because no investor will take the financial risks involved,” Nhlapo says.

Early stage rail reform

“Once again, we urge government to intervene and compel Transnet to abide by the National Rail Policy so that the proper process is followed, with proper consultation and recognising the important role to be played by the Interim Rail Regulator (IRERC) in implementing fair and balanced early stage rail reform,” Nhlapo says.

Transnet would provide third-party access to its freight rail network from April this year, President Cyril Ramaphosa said in his State of the Nation Address.

It was to do this by making slots available on the container corridor between Durban and City Deep in Gauteng.