Regional Focus

  • Public and private enterprise set to pull together?

23.06.2016 By: Christian Doepgen

Artikel Nummer: 15173

Hello, private enterprise!

The recent nomination of a new executive railfreight team showed that there was something afoot in Transnet (see also ITJ Daily of 24 May 2016). Now the government in Pretoria wants to allow private investors to put money into the state-owned transport firm.

It did not come as a complete surprise when the government announced its plans to allow private investors to take a stake in the state-owned corporation Transnet. For many years the company, whose business consists primarily of running the country’s railfreight network and its ports, was considered untouchable. After president Jacob Zuma made an announcement on the subject at the beginning of the year, minister of public enterprises Lynne Brown followed it up with a corresponding statement in April.


First project on the table

The authorities have envisaged a division of tasks. Transnet will expand its role in the country’s ports as well as in the railway segment, whilst private enterprise will finance and develop inland box terminal activities. On 1 June Transnet presented its first project – the Tambo Springs inland port and logistics gateway, near Johannesburg, where a railfreight terminal with the capacity to handle 144,000 teu annually is set to be established by 2019. The concession to run it will last 20 years, with expansion options part of the plans from the outset.


It remains unclear to what extent private enterprise will follow the government’s call, however. The government showed how serious it is about its new approach by presenting a new Transnet railfreight leadership team in May, with Siyabonga Gama as the group CEO. Brown admitted that plans for the partial privatisation of Transnet had not been completely uncontested in the cabinet.


The investments needed for major projects, such as a deepsea port at Boegoebaai, north of the port of Nolloth on the Atlantic coast, are so great, however, that the involvement of the private sector was an integral part of the plans from the beginning in 2014 / 2015. It remains to be seen what conditions private investment will be offered.


New Namibian branch

Business is also progressing in neighbouring Namibia, where GAC has established a branch of its own in Walvis Bay, having previously cooperated with an agent there for the past 15 years. Managing director Eric Barnard said that the move came in response to growing demand from oil and gas industry customers, as well as increasing trade between Namibia and other Southern African countries.