Transnet slammed for its “deeply flawed” interpretation of private third-party rail freight access

Transnet and African Rail Industry Association (ARIA) join for third-party implementation. 25-11-2022 PICTURE SUPPLIED

Transnet and African Rail Industry Association (ARIA) join for third-party implementation. 25-11-2022 PICTURE SUPPLIED

Published Dec 4, 2022

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Durban — The rail industry body, African Rail Industry Association (ARIA), has slammed Transnet’s “deeply flawed” interpretation of private third-party rail freight access, saying it has resulted in only one successful application bid, which “proves that the process is not working as intended.”

Transnet and ARIA recently made an announcement that aimed at addressing the awarding of slots by Transnet Freight Rail (TFR); and by doing so, give a picture of the current landscape of the rail industry in South Africa. The announcement was in Johannesburg last Friday (25 November 2022).

Earlier in 2022, TFR allocated 16 slots for private operators, and that was to be used under a 2-year contract. Transnet would still have overseeing rights on the lines, and during the year, there would be phased implementation. The only bid made for the Cape Corridor's Kroonstad to East London slot was successful and went to private freight operator Traxtion.

ARIA CEO Mesela Nhlapo says, “This is exactly what we warned would happen. Transnet is not interested in transformation - if only one big company was successful in its third-party bid. It has been eight months since Transnet announced its intention to allow private freight operators onto the rail network. Eighteen companies showed interest, two applied for the third-party access, and only one was successful. This proves that Transnet’s onerous terms and conditions are not appealing to private investors.”

Mesela Nhlapo, CEO of African Rail Industry Association (ARIA) PICTURE: SUPPLIED

Nhlapo continues: “The National Rail Policy stipulates that third-party access should happen in a way that promotes investments and creates an equal level playing field for all players in the industry. Transnet’s approach to third-party access means that there will be no private investment into South Africa’s rail network because no investor will take the financial risks involved.”

Nhlapo says that through various consultations, the National Rail Policy was developed over 14 years in an attempt to address issues within the industry. She also mentions how they keep losing billions of rands because Transnet is not following the guidelines set by the policy.

“Once again, we urge the government to intervene and compel Transnet to abide by the National Rail Policy so that the proper process is followed with proper consultation; and recognising the important role to be played by the Interim Rail Regulator (IRERC) in implementing fair and balanced early stage rail reform” Nhlapo says.

Transnet has been approached for comment.

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