The Road Freight Association has welcomed the establishment of Transport Minister Barbara Creecy’s new interim Private Sector Participation Unit (PSP Unit) which has developed rail freight and port requests for information that have been issued to interested parties.
Creecy, who launched the requests for information to interested parties for their potential private-sector participation in rail and port freight logistics projects on Sunday, said the move marked a pivotal milestone in the government’s efforts to collaborate with the private sector.
However, she said the Roadmap for the Freight Logistics System clarified that strategic infrastructure such as rail lines and ports would remain owned by the public sector.
“At the same time, it paves the way for greater competition in rail and port terminal operations, which will attract private investment and improve our infrastructure to world-class standards.”
She said rail and port infrastructure faced substantial challenges, including declining performance; theft and vandalism; under-investment, and operational inefficiencies.
“All of these hinder trade and economic growth.
“The limited availability of state resources to fund infrastructure development and address backlogs has intensified these challenges, severely restricting the ability of state-owned entities to fulfil their critical mandates.”
She said Transnet had received “numerous unsolicited proposals” from the private sector offering investment, skills, and expertise to support the rehabilitation and reform of the struggling rail and port systems.
“This overwhelming interest has made it clear that the department and Transnet must engage in broad and inclusive market engagement before issuing Requests for Proposals in August this year. These are not formal procurement processes in themselves but a mechanism to understand and source information from the market.”
Creecy said her department was in the final stages of concluding a memorandum of agreement with the Development Bank of Southern Africa (DBSA) and the National Treasury, to appoint the bank to host an interim PSP Unit.
“We have set up an interim PSP Unit within the Department, comprising a team with extensive expertise in structuring PSP contracts and procurement. In collaboration with Transnet, the interim PSP Unit has developed the Rail Freight and Port RFIs.”
RFA CEO Gavin Kelly said business welcomed the establishment of the unit and the launching of the RFIs.
“The road freight association is pleased to see that there is steady progress in terms of dealing with the logistical challenges in the country.”
He said business hoped the new unit would “chart the way” in terms of focusing investment expertise into rail and port operations.
“The association cannot underline more boldly how important our rail and port operations are in ensuring that road networks, road transit, road freight operations and the economy continue without huge challenges,” said Kelly.
“It is no secret that our ports and our rail network have let the economy down over the last couple of years.”
He said the fact that the unit would be hosted by the DBSA “should be cause for good governance, and it should allay any fears that some investors may have”.
“The association really is looking forward to there being changes in the logistical network of South Africa. And, as we said earlier on in the year when the network statement was released, we encourage all companies that could become third-party operators on the rail network or in the ports, or who could become part of the revitalisation of our logistics network, to show interest, to become involved and to pick up the baton.
“We look forward to South Africa becoming the place to do business, the ports to put your goods through for export and import,” said Kelly.
