In South Africa, Transnet is set to introduce new 'access charges' by 1 November to integrate the private sector into its rail network. This move has sparked discussions on the affordability of the Private Sector Participation (PSP) tariffs, crucial for the commercial viability of private rail operators within the country. Transnet's forthcoming Network Statement will detail these PSP tariffs and access charges, necessary for utilizing South Africa's freight rail network.
Rudi Dicks, from the presidency's project management office, emphasized the significance of these charges in signaling market readiness for open access. However, concerns have been raised about the proposed minimum access charge of 19.79 rand cents per gross ton per kilometer, with calls for Transnet to reconsider its pricing strategy to attract private sector investment.
The final decision on pricing will be under the jurisdiction of the new Economic Regulatory Transport Act of South Africa (ERTA), yet to be enacted. This interim period poses challenges for those wishing to contest the access charges, necessitating engagement with the interim regulator and ministerial task teams.
Transnet's initiative is part of South Africa's 'Operation Vulindlela', aiming to rejuvenate the nation as an investment hub through enhanced access and contributions from the private sector, including major industries and international investors. Vivien Chaplin from Cliffe Dekker Hoffmeyer highlighted that the final network statement is pivotal for reducing Transnet's debt and bolstering the South African economy.
With Transnet's debt rising and recent financial losses, the South African government has provided significant bailouts, underlining the urgency for increased private sector participation to improve financial health and operational efficiency. The success of these measures, as indicated by Transnet CEO Michelle Phillips' profit expectation for 2025, hinges on the effective implementation of PSPs and the resultant boost in freight volumes and cash flow.
Source: The Africa Report