Minister Creecy sets out logistics, rail investment plans

Source: Department of Transport

"[Government has] established the National Logistics Crisis Committee [NLCC]…comprised of representatives from the Presidency, various government departments and the private sector.

"Its work includes securing strategic logistics corridors handling commodities that are essential to the export market and economic growth; addressing backlogs and congestion at strategic border crossings; combatting congestion in key national highway corridors such as the N1 and N3, as well as interventions to combat cable theft and maintenance backlogs at Transnet.

"This collaboration has seen modest improvements in our logistics performance," she said.

The department and Transnet have set a target of moving at least 250 million tonnes of freight on the Transnet network by 2030 up from 150 million tonnes in the 2023/24 financial year.

Investment

Creecy highlighted that to achieve this, the rejuvenation of the rail sector is a key objective, which began with the Cabinet’s approval of the White Paper on National Rail Policy in March 2022.

“The Rail Policy introduces structural reforms in the sectors intended to enable private sector investment, optimal utilisation of the rail network, and effective economic regulation of rail that will facilitate equitable access to the rail network and ensure that it is properly managed.

"As part of this process, a Private Sector Participation [PSP] Unit is being established by the department in collaboration with the Development Bank of Southern Africa. Once established, this unit will help direct and coordinate private sector investments in priority rail projects requiring capital investment."

The Minister revealed that the department is currently in the process of issuing Requests for Information "regarding potential investment in the rail and port sector".

"This serves to share information with the public regarding possible PSP projects, but also to allow the department, and by extension Transnet, to gather information on projects with the potential for third party involvement.

“I want to emphasise again that throughout this process all rail and port infrastructure will remain under the government’s ownership. We are also in the process of consulting with organised labour regarding the details of our freight logistics roadmap.

"We cannot continue with the status quo, where derailments and port blockages cost our economy billions of rands, and thousands of jobs in all sectors of our economy are at risk, Creecy said.

Port efficiency

Turning to inefficiencies at South African ports, the Minister said Transnet has launched a recovery plan aimed at "increasing and stabilising port and rail volumes".

"The establishment of various war rooms for specific corridors and commodities has allowed Transnet and the private sector to collaborate and share expertise and address challenges such as derailments and unplanned maintenance.

"As part of Transnet’s Recovery Plan, replacement and refurbishment of crucial ports infrastructure such as cranes, gantries and straddles is planned in the short, medium and long term, and continued collaboration with original equipment manufacturers (OEMs) has ensured that spare parts for essential machinery can be secured when necessary.

"This has resulted in improvements we are seeing in our ports, which have cut down on ship waiting times and queuing times for trucks," she said.

Creecy told stakeholders at the launch that collaborations have also assisted in addressing bottlenecks and inefficiencies.

She insisted that all the measures set out by the government will "enable us to meet the targets that we set for the logistics sector, based on pre-pandemic figures".

"Transnet and the department have set the goal of 250 million tonnes of freight per year, moving on the Transnet network by 2030. Transnet achieved 150 million tonnes of freight per year during the 2023/ 2024 financial year. At our ports, the target is to improve gross crane moves per hour from the 2024 average of 16 to 30 by 2030.

"These ambitious targets cannot be achieved within the existing Transnet system and will require significant private and public investments in infrastructure, rolling stock and digital systems.

"This can only be achieved through a partnership between government and the private sector, where technical knowledge, experience, [the] world’s best practice and funding can be shared," Creecy concluded.