Transnet Reveals Aggressive Private-sector Ambitions

A new manganese export terminal in Ngqura, the upgrading of the rail freight container corridor between Gauteng and Durban, the development of a rail link between automotive manufacturers in Pretoria and Gqeberha, and improvements to the bulk terminal at Richards Bay are among the port-related rail freight projects identified by Transnet for private-sector involvement over the next six months.

Business Day reports that the state-owned logistics company plans to launch a R20 billion manganese export terminal project in Ngqura by May and to reintroduce a project aimed at upgrading the container corridor between Durban and Johannesburg.

Also high on Transnets agenda is a private partnership to develop port and rail infrastructure for the Ukuvuselela automotive corridor linking Pretoria and the Eastern Cape. The company is additionally seeking private-sector involvement in modernising the dry bulk terminal at Richards Bay and launching a new locomotive leasing company.

These initiatives align with the governments road map for the freight logistics industry and the conditions set out by Finance Minister Enoch Godongwana when he granted Transnet a R47 billion guarantee at the end of 2023.

While Transnet has previously been criticised for resisting private-sector participation by imposing unworkable conditions, it has moved ahead with greater urgency over the past year under the leadership of CEO Michelle Phillips.

Phillips plans to take all these projects to market by June. They follow the December release of a long-awaited rail network statement, which paves the way for private-sector third-party operators to access Transnets rail network for the first time. Applications for network slots close on 7 February.

However, Transnet has emphasised that an investment of R70 billion will be required over the next five years to bring the rail network infrastructure up to standard. The company is in discussions with customers and the government to explore funding options.

A flagship private partnership deal for Durban Ports container terminal 2, established under Phillips predecessor Portia Molefe, remains mired in litigation. Phillips expressed hope that this deal could be concluded by June, although a similar arrangement for Cape Town Port is not currently planned.

The Ukuvuselela automotive rail corridor project has been in development for some time. Transnet, in collaboration with the Industrial Development Corporation, is now prepared to bring it to market.

Similarly, the new manganese export terminal at Ngqura, which has been under consideration for years, is nearing market readiness. Transnet plans to offer the project as a single package, encompassing both the port terminal and the rail connection.

The manganese facility at Gqeberha Port has exceeded its lifespan, with manganese currently being exported through various alternative channels. Phillips highlighted the significant demand for manganese capacity, adding that Transnet was conducting a bankable feasibility study and aimed to take the project to market by May. 'Its a catalytic project that we need to push with speed,' she stated.

The Durban-Johannesburg container corridor, although loss-making for Transnet, remains crucial for the national economy. Plans to concession the corridor to the private sector were cancelled at the end of 2023 due to industry uncertainty regarding third-party access to the network. Transnet now intends to reintroduce the project to the market by March or April, with market estimates suggesting infrastructure investment of up to R10 billion.

Phillips also aims to bring the Richards Bay dry bulk terminal project to market by April or May. This initiative seeks a private partner to modernise the terminals outdated infrastructure and take over its operations, focusing on chrome and magnetite exports.