The DA welcomes Transnet's decision to bring in a private partner to take over the running of its Durban/Johannesburg corridor for the next 20 years, as a precursor to a path to privatization. This needs to be embedded in any such contracts – with provision for accelerated privatisation.

Transnet’s inability to effectively run this important trade corridor has been costly to the export sector and the economy as a whole – as such, this momentous decision is a critical first step in arresting the decline and infusing private sector innovation in running the corridor. What it cannot amount to is a ‘hospital pass’ to the private sector with onerous conditions and adjacencies that are the responsibility of the state.

While we welcome this move by Transnet, we call on Transnet executives to ensure that this call for private partners is advertised both locally and internationally. South Africa should tap into the expertise of successful international freight rail logistics companies if we are to begin the process of securing our freight rail logistics and end the monopoly that Transnet has.

By finally embracing the private sector as potential partners in efforts to improve operational efficiency, Transnet has essentially admitted that the state-led SOE model has failed. The impact of this failure is widespread, as all major SOEs, from Transnet, Eskom, SABC, Denel and PRASA are on the verge of financial ruin and are looking to Treasury for bailout in one form or the other.

If the country is to be freed from this SOE albatross, there needs to be a concerted effort across the board to bring in private sector participation and expertise. Failure to pursue a privatization drive at SOEs will essentially mean that they will remain cesspools of corruption, dumping grounds for cadres and a burden to taxpayers devoid of innovation and the capital necessary to drive this.

In order to ensure that its call for private participation is above board, Transnet should pursue a vigorous process evincing transparency and accountability. A private partner who will be able to increase transportation volumes on the Durban/Johannesburg corridor will not only be good for Transnet’s bottom line but will help to increase trade volumes with our trading partners – this is sorely required given the huge decline, associated delays and impact on our roads. Only then will the ‘green shoots’ minister Gordhan speaks of emerge;  the current state they are more like black weeds.

 

Issued by Ghaleb Cachalia MP - DA Shadow Minister for Public Enterprises