The government has confirmed that South Africa’s port and rail infrastructure will not be privatised, as is the impression South Africans are under, and will remain in public ownership.
“South Africa’s port and rail infrastructure are strategic national assets,” the Presidency said in an official statement.
“Inaccurate media reports have created the impression that the Presidency seeks to place Transnet under private control. This is not the case,” it read.
Issues with rail and port corridors
South Africa’s rail and port corridors have been riddled with issues which have seen losses equivalent to around 5.3% of the country’s gross domestic product since 2021. Meanwhile, the country’s mining profits contracted by 9% year-over-year, as was announced in November 2022 due to rail and port issues.
The leading cause of the underperformance of the country’s railways has been vandalism, leaving kilometres of the rail lines inoperable.
In response to these issues, the Presidency has been working on the Freight Logistics Roadmap due to be presented at the end of this month, that will mainly focus on Transnet’s issues and explore ways to solve them.
In September, Minister of Public Enterprises Pravin Gordhan asked the board at Transnet to come up with suggestions and findings within three weeks regarding how to improve the parastatal’s operations and to pinpoint the reasons behind the management and staff performance issues.
Working closely with private sector
President Cyril Ramaphosa also established the National Logistics Crisis Committee (NLCC), which will oversee the implementation of the plans in the roadmap once it is finalised.
The government said it would be working closely with the private sector to ensure the implementation of immediate operational interventions. The media also reported that Transnet shared its plan to seek external assistance in managing the transportation route between Johannesburg and Durban for the next 20 years.
Additionally, it was reported that they are exploring the possibility of collaborating with private companies to expand and improve the operations at the Durban port.
But collaborating was not the same as privatisation, the government has emphasised.
“Private sector participation does not equate to privatisation of public assets, nor does it diminish the state’s role in ensuring a reliable, efficient, and world-class logistics system,” the presidency said.