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Date
: 28/07/2005
Source: KwaZulu-Natal Provincial Government
Title: Cele: Freight Empowerment Summit
Speech by KwaZulu-Natal MEC for Transport, Community Safety and
Liaison, Mr Bheki Cele, at the Freight Empowerment Summit at the
Golden Horse Casino, Pietermaritzburg
All Protocol Observed.
The success of our country’s endeavours is evident in the
strong economic growth our country is experiencing. Although much
has been achieved, it is only fair to admit that our endeavours to
fast track development need to increase, as many of our previously
disadvantaged communities still remain impoverished as a result of
factors such as unemployment.
One of the objectives of the KwaZulu-Natal Department of Transport
is to identify opportunities within the transportation industry,
and particularly the freight sector, for enterprise development and
job creation in order to facilitate access to skills and capital
for emerging enterprises.
The vision of the KZN Department of Transport is, “Prosperity
through Mobility”. This means that all the activities of the
department, and the manner in which the department delivers
services to communities, are aimed at increasing the wealth and
quality of life of all the citizens of our province.
In order to create and sustain quality jobs, the freight industry
must stimulate an increase in black participation in ownership,
management and employment in this sector throughout the value
chain. Emphasis must be placed on the development of new and
existing businesses.
To make this a reality, we have developed strategies that will be
directed at empowering these enterprises by increasing their access
to skills, capital and opportunities. This will revolve around
maximizing employment opportunities and as part of our strategies;
we will use labour intensive methods wherever economically viable.
The development of SMMEs has been identified as one of the pillars
for economic development, to sustain reconstruction and
development. These enterprises provide the utility tool required to
address the challenges of job creation, economic growth and
equality in South Africa.
We can draw upon the wealth of experience and evaluations of other
countries where SMMEs are playing a critical role in absorbing
labour, penetrating new markets and expanding economic growth
through innovation and creation. The South African economy is
typified by big business domination, monopolistic ideals and
constrained competition resulting in an unequal distribution of
wealth.
Therefore, the main focal point of this Summit today will be on the
establishment of Micro and Small business ventures that will be
able to create employment for Survivalist enterprises. The vision
of the Summit is that these Micro and Small business ventures will
grow into Medium sized operations over time.
The strategic objectives of the KZN Department of Transport in this
respect are as follows:
* To increase the extent to which previously disadvantaged
individuals participate in ownership and management of
enterprises
* To provide access to skills training, economic activities and
infrastructure in order to create sustainable jobs
* To stimulate economic growth
* To strengthen the cohesion between small enterprises
* To level the playing fields between large and small enterprises;
and
* To promote access to finance.
Specific Opportunities in each Mode of Transport
A. Rail Transport
The KwaZulu-Natal branch line network has nine clearly defined
railway lines. Passenger services are no longer offered on these
lines and since 1980 the freight tonnage carried has reduced
substantially, from over 8 million tons to 2.5 million tons in
2002.
This is a total cargo drop of 72%. The cargo lost by rail rapidly
transferred onto road mainly due to increased road vehicle size,
aggressive competition from the deregulated road haulage industry,
large increases in private distribution fleets, and the poor state
of rail infrastructure.
The reduction in rail traffic has also reduced the number of
opportunities for small and medium sized enterprises in the rural
areas, to participate in the supply chain of commodities, as the
large centrally controlled fleets of heavy road vehicles now in
operation, usually carry out the entire distribution
operation.
As part of its initiative to revitalise branch lines, between 22
April 2003 and 9 June 2003, we consulted twelve Rural Road
Transport Forums to solicit their views on:
1. The utility and future of the branch lines existing in their
respective districts; and 2. Potential SMME opportunities
associated with these lines.
The feedback from these meetings was universally positive towards
revitalising the branch lines and the creation of opportunities for
SMMEs in the process.
The revitalisation of the branch lines is a phased step process.
The initial step is to rehabilitate the rail lines to address the
neglected deterioration of the infrastructure.
Once the infrastructure is restored to an acceptable level, an
on-going preventative maintenance programme will be implemented to
maintain lines at an operational level.
The third step is to implement an on-going maintenance programme
for the equipment.
The final step focuses on the railway support activities such as
the operation of depots, distribution of goods, warehousing and
cargo collection, etc.
Infrastructure Rehabilitation Opportunities
The branch line network has been neglected to such an extent that
it can be best described as being poor and technically substandard.
To attract and sustain an optimum amount of cargo on the branch
lines, the lines have to be rehabilitated to an operable state
where they can provide a safe and efficient service to
customers.
This rehabilitation work can be outsourced to SMMEs and has been
identified as follows:
* Repairs to tracks and track ballast;
* Clearing points and buried rails (mainly in unused sidings)
* Concreting crossings
* Fencing where necessary; and
* Opening drains, culverts and bridges; and
* Repairs to buildings and structures.
Rail and Equipment Maintenance
Once the rehabilitation programme has been completed, an ongoing
maintenance programme will be implemented. These activities can be
contracted out to SMMEs who have proven competence in this field,
and can be listed as follows:
Rail
Fence repairs and maintenance; track weeding, herbicide spraying
and clearing of verges; inspection and maintenance of drains,
culverts, and bridges; etc.
Trains
Truck cleaning and body maintenance; routine painting of rolling
stock; cleaning of passenger coaches; locomotive washing and
cleaning; wheel inspections and lubrication; routine maintenance,
and heavy overhauls
In terms of current legislation, Spoornet is the exclusive railway
operator on most branch lines in the country. The KZN Transport
Department and the National Department of Transport are engaging
Spoornet on ways to unlock these activities as Micro and Small
business opportunities.
These negotiations also extend to the operation of privately owned
railways on these branch lines. Identified potential pilot project
areas are the Nkwalini railway branch line, the Sisonke District
railway network and the South Coast (Port Shepstone to Harding)
railway lines.
Operational and Railway Support Activities In addition to the
potential for creation of work on the railway itself, once the
railways are conveying a feasible amount of branch line traffic and
offer competitive rates compared to road transport, there will be
many opportunities for small businesses to provide services to the
communities in rural areas served by branch lines. If rail service
conditions were improved, some of the services which historically
provided opportunities as peripheral services to the railways could
well be viable again.
It is in this manner that the branch lines can act as significant
economic generators for their respective rural areas.
B. Road Transportation - Small Transport Operators due to large
companies dominating the freight transport industry and making it
difficult for emerging operators to progress, the Freight
Directorate of the KZN Department of Transport has instituted
programmes for the training of small transport operators.
We have also been identifying working opportunities within the road
freight industry for SMME operators. Our Regional Offices often
procure supplies as part of their operational activities which
require these goods to be delivered to depots or sites. This
situation provides the opportunity for this transportation to be
outsourced to small transport operators who are listed on the
department’s Small Transport Operator’s database.
Truck Stops
There are currently initiatives that support the building of Truck
Stops on certain routes in the province. The construction of these
facilities will provide an opportunity to solicit the services of
SMMEs.
C. Maritime Industry
KwaZulu-Natal is naturally endowed with the two largest ports in
South Africa, which are strategically positioned on major shipping
routes, serving as major gateways to domestic and international
trade. The import and export of cargo is a fairly complex industry
involving many different activities. The Freight Directorate aims
to establish relationships with the National Ports Authority and
other industry leaders to identify opportunities for SMME
development in the maritime sector.
In conclusion, the hosting of this Empowerment Summit and the
showcasing of these opportunities demonstrates the commitment of
the KZN Department of Transport to utilising all sectors of the
transportation market, to maximise economic development and the
creation of jobs for the people of KwaZulu-Natal.
Thank you.
Issued by: Department of Transport, KwaZulu-Natal Provincial
Government
28 July 2005
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