South African Transport Minister Barbara Creecy stated on Thursday, August 13, that Transnet, the state-owned company responsible for the country’s ports and rail transport, aims to secure up to $2.2 billion from the National Treasury to finance projects through 2030.
“We will submit requests to the National Treasury’s Infrastructure Financing Facility totaling approximately $2.2 billion for projects through 2030,” Barbara Creecy told Bloomberg.
The request will be in addition to the $803.9 million that Transnet has already received through the Infrastructure Financing Facility, including $692.6 million earmarked for the rehabilitation of rail corridors used to transport iron ore and coal, as well as for improving the efficiency of the Durban Container Terminal.
“The funds will be used to finance modernization projects and equipment purchases that Transnet needs to turn the company around after years of poor performance and corruption,” the minister added.
The company’s recovery is critical to the economic rebound, as the economy has grown, on average, by less than 1% per year for more than a decade, with constraints in the transportation sector repeatedly cited as an obstacle to faster growth.
Transnet recently concluded rail network access agreements with eleven new rail transport companies, which have been allocated schedules to operate on its main network.
The inclusion of private operators is expected to add 24 million metric tons of freight capacity to the network, a goal that could be achieved within the next 18 months, Creecy said.
“Transnet will likely have to spend about $2.2 billion to modernize the rail lines so that the new operators have the conditions they need to work,” Creecy said. “They will have to purchase rolling stock. So I expect the 24 million metric ton increase to occur in about 18 months,” he noted.
Among other measures the state-owned company is taking to improve its performance are plans to introduce a privately operated floating dock at the Port of Cape Town, with the aim of increasing ship repair capacity, and a “port community system,” Creecy emphasized.
This system will involve shipping agents and shipowners in the ports’ operations rooms, improving coordination, he explained. “This would be particularly helpful for the citrus sector, which typically needs to ship containers during a season that can be very windy.”
