Transnet ropes private sector

Tuesday, September 14, 2010

Pretoria - Transport parastatal Transnet has launched a second phase aimed at including the private sector in its operations. On Tuesday, the parastatal once again opened an Expressions of Interest (EOI) period for all companies interested in its branch line operations.

The EOI (which is a non-binding and not pre-qualifying process) is an opportunity for interested parties to get specific information about each branch line opportunity from Transnet.

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

"We are heartened by the positive response from industry players. 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," said the parastatal's acting Group Chief Executive, Chris Wells.
The branch lines comprise 7,278 km (or 35 percent) of the 20,953-km route of the company's rail network. At present, 3,928 km 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 concessioning both the active and inactive branch lines.

The EOI 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.

"Transnet understands that the private sector may have different approaches to branch lines operations.
Through this process, we aim to share ideas on what it might take to make these lines viable for private 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," said Wells.