Transport Minister Barbara Creecy says the country’s rail and port infrastructure faces substantial challenges such as theft and vandalism and operational inefficiencies.
She says these are exacerbated by the limited state resources to fund infrastructure development and address backlogs.
Creecy says after the department and Transnet received unsolicited proposals from the private sector offering investments, skills and expertise to help turn around the challenges at the struggling state-owned company, government decided to launch this market engagement process before it issues requests for proposals (RFPs) in August this year.
“We are doing this because later on the in course of the year, in August, we want to introduce together with Transnet, a request for proposals. We want to make sure that those proposals are well responded to because we desperately want private sector investment infrastructure. What I think we all understand is that infrastructure has been underperforming for some time. One of the major reasons for underperforming relates to the bad state of the infrastructure, because the fiscus is not able to fully fund what is required, we are calling on the private sector to participate with us through a special private sector participation unit that we are setting up, under the auspices of the Development Bank of South Africa.”
Minister Barbara Creecy briefs media on rail partnerships
The inefficiencies of the rail and port operations are said to be part of the challenges hindering economic activity.
These problems have had a great impact on sectors such as mining and manufacturing, making it difficult to move goods for export.
Creecy says this is a serious situation that needs to be addressed urgently.
“I have seen research that indicates it costs us a billion a day through our port inefficiencies, but I think much more worrying in a country with high unemployment is that if we don’t fix this infrastructure the jobs of many workers in upstream industries are at stake. Workers in mines for example, we know that many of the iron ore mines have stockpiled all of the iron ore that they are not able to get out to the ports fast enough, which obviously puts the jobs of workers in that sector at risk. We also have a situation where a great deal of our coal is now moving on road, this dramatically increases the cost of exports and makes our exports less competitive. Another issue why national treasury is unable to get revenue is because we are unable to get our minerals out to export quickly enough and as a result we are losing very important revenue.”
The portal will remain open for eight weeks until May 9. The department says in May, it will launch a second batch of requests for information focused on passenger rail initiatives.
