Private train operators using Transnet's rail network will boost economy, says Creecy

JOHANNESBURG - Transport Minister Barbara Creecy said the decision to allow private train operating companies access to Transnet’s rail network will stimulate economic growth.

Eleven private companies have been approved to transport freight on rail through allocated slots across Transnet’s 41 routes.

This means the State will now work with private operators in moving minerals and other goods by rail.

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Speaking at a media briefing in Pretoria on Friday, Creecy said Transnet will benefit from permitting private companies to use its freight rail network.

"The benefits of third-party access include, among other things, (I) improving utilisation of the network and thus increasing rail efficiency; (ii) reducing network unit costs by involving more operators; (iii) increasing revenue to contribute to investment in the maintenance and modernisation of the network, and (iv) reducing the external costs of freight logistics and improving the competitiveness of rail as a more environmentally friendly mode of transport,"said Creecy.

Creecy also said that allowing private companies to operate on the state’s rail network will create jobs.

"This is a significant step in our rail reform journey and makes open access to freight rail a reality in our country. It will contribute to a more efficient, reliable and sustainable rail system that can promote inclusive growth and ensure job retention and job creation," said added.

TRANSPORT MINISTER DEFENDS PUBLIC-PRIVATE PARTNERSHIP

Creecy assured critics that while private train operators will be allowed access to the network, the rail infrastructure itself will remain in the hands of the State.

“This is not unique to our country. This has been done everywhere. Transnet's primary activity going forward is going to be as a network owner. They will still be running a freight and port business, but their private activity is going to be a network owner and a receiver of revenue.”

She added that public-private partnerships in the freight rail sector are an established global practice.

“In our instance, we do not believe it's appropriate to privatise infrastructure ownership. This is to do with the fact that we want there to be interoperability in a strategic economic asset of the country.”

The 11 private operators granted access must now acquire safety permits and other operational requirements before they can begin operating on the State-owned rail network.