Presidency: Transnet won’t be privatised

The presidency has rubbished reports rail service Transnet is on the path to privatisation, saying it remains a key national asset.

Mail & Guardian this week reported private investment was set to flow into the country’s rail sector as part of a Roadmap for the Freight Logistics System in South Africa.

The presidency denied reports of privatisation coming from what it called “a leaked draft version” of the document which “created the impression that the Presidency seeks to place Transnet under private control”. 

“This is not the case. South Africa’s port and rail infrastructure are strategic national assets, and government has taken a clear stance that they will remain in public ownership,” spokesperson Vincent Magwenya said.

He said government was expecting “massive new investment to revitalise South Africa’s logistics system” but this did not mean privatisation.

“Private sector participation does not equate to privatisation of public assets, nor does it diminish the role of the state in ensuring a reliable, efficient, and world-class logistics system”. 

ALSO READ: Rail reform ‘more urgent than ever’ after Transnet CEO resigns

Issues with rail and port corridors

South Africa’s rail and port corridors have been riddled with issues which have seen losses equivalent to around 5.3% of the country’s gross domestic product since 2021. Meanwhile, the country’s mining profits contracted by 9% year-over-year, as was announced in November 2022 due to rail and port issues.

The leading cause of the underperformance of the country’s railways has been vandalism, leaving kilometres of the rail lines inoperable.

In response to these issues, the Presidency has been working on the Freight Logistics Roadmap due to be presented at the end of this month, that will mainly focus on Transnet’s issues and explore ways to solve them.

In September, Minister of Public Enterprises Pravin Gordhan asked the board at Transnet to come up with suggestions and findings within three weeks regarding how to improve the parastatal’s operations and to pinpoint the reasons behind the management and staff performance issues.

Working closely with private sector

President Cyril Ramaphosa also established the National Logistics Crisis Committee (NLCC), which will oversee the implementation of the plans in the roadmap once it is finalised.

The government said it would be working closely with the private sector to ensure the implementation of immediate operational interventions. The media also reported that Transnet shared its plan to seek external assistance in managing the transportation route between Johannesburg and Durban for the next 20 years.

ALSO READ: Plans reportedly underway to rehire hundreds of skilled Transnet staff

Additionally, it was reported that they are exploring the possibility of collaborating with private companies to expand and improve the operations at the Durban port.

But collaborating was not the same as privatisation, the government has emphasised.

“Private sector participation does not equate to privatisation of public assets, nor does it diminish the state’s role in ensuring a reliable, efficient, and world-class logistics system,” the presidency said.

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