Transnet infrastructure manager paves way for private players

Transnet has established an interim infrastructure manager as part of reforming the railway network and paving the way for private players to operate on it by next April. 

This is a major step in the reform of ports and rails to ease logistics bottlenecks. The reforms are contained in the White Paper on Rail and the Roadmap for Freight Logistics and are aimed at breaking Transnet's monopoly. Its rail division, TFR, is being broken up into an operating company (TRFOC) and a separate Infrastructure Manager (TRIM). 

The entity said the commercial objections of the infrastructure manager are to:

• maximise the use of the network; 
• increase network density;
• generate revenue through access fees that will fund network maintenance, rehabilitation and expansion; and
• increase rail market share in economic growth sectors by facilitating road to rail migration.

Last week Transnet chair Andile Sangqu said the infrastructure manager would focus on protecting and restoring rail network capacity for commercially viable high volumes to assist TFROC in delivering the highest tonnage for the components of the plan.

Transnet said the rail policy introduces radical structural reforms in the sector that are intended to enable and facilitate private sector investment, optimal utilisation of rail and effective economic regulation of rail that allows equitable access to the rail network and ensures it is properly maintained.

“This access will ultimately be regulated by the soon-to-be-established Transport Economic Regulator. The policy aims to liberalise the rail sector by regulating rail infrastructure and providing private train operating companies with access to the freight rail network,” it said.

The regulator will be established to set prices for the sale of train slots and regulate the access regime, including pricing, compliance, penalties and the resolution of disputes between the infrastructure manager and train operating companies. 

Last week Transnet released details of an ambitious recovery plan that forecasts an increase in revenue from R78bn to R91bn, a surge in earnings to R37bn, and the reversal of a R5.7bn net loss into a R5.1bn profit in the next two years.

It also plans to ramp up capital investments on the rail network, rolling stock and port equipment from R17.9bn to R28.2bn by 2025.

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