State-owned transport utility Transnet has announced spending plans for the next five years, including some lower port tariffs, but higher charges for rail users
Transnet will invest R153.5B over the period, but it is hoped that public private partnerships will make additional investment. General freight tariffs are to rise by an average of 5% over the year and container tariffs by 6%, but port authority tariffs are to fall by 6%. At least 75% of all procurement spending must go to South African companies, while the government has ordered a review into the tariffs for bulk unprocessed exports.
Pravin Gordhan, the Minister of Public Enterprises, has set Transnet a target of increasing the proportion of general freight transport by rail from 29% in 2018-19 to 32% in 2019-20. In the longer term, the government wants a sustained shift of freight transport from road to rail, but it has asked for this for many years with limited success.
Gordhan wants Transnet to improve regional inter-connectivity in support of the recent African Continental Free Trade Area agreement, although no details of how it is to achieve this have been released.
The government has also set Transnet - and some other state owned enterprises - the goals of promoting greater transparency and accountability to overcome poor governance; restoring financial sustainability and prudence; and removing all vestiges of state capture and ensure there are harsh consequences for malfeasance. State capture is the control of state organisations by third parties for their own benefit.
Transnet will also be required to create an environment within which “skilled and professional public servants of the highest moral standards dedicated to the public good” can thrive and contribute to a “best in world” culture.
Many Transnet board members and executives have been sacked or forced to resign over the past two years. The parastatal has begun the process of recruiting a new CEO, chief operating officer and chief information officer.