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While an end to load-shedding might just be possible in the near future, another bit of exciting news is creating a climate of hope amongst South African businesses.

The transport and logistics committee overseeing our rail network has published a timeline for private sector operators to be given access to the country’s rail network by October.

A private sector participation unit is now being set up within the Department of Transport and National Treasury to help accelerate investment in rail and ports. This, and a promised permanent end to load-shedding, is part of a raft of measures aimed at boosting SA’s growth rate to 3-5% by 2030 and creating 2.5 million jobs.

Energy, transport, and crime have been found to be the main growth-stifling factors, and in an effort to put South Africa back on the growth road, over 130 CEOs from the business sector partnered with the government last year. This partnership was supported by an R260 million investment and the deployment of 350 professionals across the three focus areas.

“This has contributed to the excellent progress made, with the reduction in load shedding being the most visible and pronounced achievement.”

Crime and corruption is estimated to cost GDP 10% a year. Transport inefficiencies cost the economy 5% in 2023 and energy costs 15% cumulatively between 2020 and 2023.

James Mackay, CEO of the Energy Council South Africa, updated the media on Wednesday on the initiative launched a year ago by President Cyril Ramaphosa and business, saying that progress is being made to unclog “barriers to growth”.

One of the most welcome improvements to our economic fortunes is the increase in freight volumes by Transnet. The operator has improved its performance to 170 million tons moved from 149 million tons over the last two years. This is still short of the 200-220 million tonnes necessary to arrest and reverse job losses, but with private operators coming on board, there is hope yet for our freight services.

The Department of Transport has pledged to appoint a transport regulator by November 2024, and open access to the rail network should be enabled by October at the latest. Transnet CEO Michelle Phillips says the group is also setting up a separate company to assist private operators with rolling stock and refurbishments.

The finalisation of the Network Statement by Transnet later this month will also open the door to a more competitive rail system, with an independent infrastructure manager charged with refereeing access to the country’s rail network. This should also improve the bottlenecks in Transnet’s decision-making that have been hampering growth for too long.

The public/private partnership on our railways is also good news for freight companies like our partners at Berry & Donaldson, who despite the issues facing our networks, have always managed to move cargo with a near-miracilous efficiency.

[source:moneyweb]