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SA opens door to private rail operators

15 September 2010

South African state transport company Transnet is once more calling for expressions of interest from private sector companies to operate branch railway lines, or feeder lines, that comprise some 35% of the country's national rail network.

This second call for expressions of interest, which is a non-binding and not a pre-qualifying process, provides another opportunity for interested parties to get detailed information about each branch line opportunity from Transnet.

By the end of the first phase in June, Transnet had received 115 registrations of interest. This was a market-testing exercise to determine levels of interest in this initiative, and respondents included JSE-listed logistics and transport companies.

"We are heartened by the positive response from industry players," Transnet acting group chief executive Chris Wells said in Pretoria this week. "We look forward to a fruitful partnership as we endeavour to introduce entrepreneurship in this industry, which we believe will unlock the economic potential of these lines."

Feeder lines

The branch lines comprise 7 278km, or 35%, of Transnet's 20 953km national rail network.

At present, 3 928km of the network is operational, with the remainder being closed. All of these are feeder lines to the core network, which is owned and operated by Transnet through its rail freight division, Transnet Freight Rail.

Consultations with all relevant stakeholders – including organised labour, National Treasury and the Department of Transport – were held following board and shareholder approval to begin the process of offering both active and inactive branch lines on concession.

Sharing ideas

The call for expressions of interest is also a chance for Transnet to receive feedback from interested parties on proposed terms and conditions under which branch lines may be offered in the subsequent competitive request for proposals.

Wells said Transnet understood that the private sector might have different approaches to branch line operations, and the process would enable the sharing of ideas on what it might take to make branch lines viable for private sector operators.

"We are committed to thoroughly explore opportunities to revitalise these lines and engaging further with all relevant stakeholders, including government, to find optimal solutions," he said.

Source: BuaNews