South Africa: Transnet looks to rest of Africa for collaborative relationships

“When it comes to freight and logistics, Transnet is not the big brother of the continent – that is not the role we want to assume,” says Kani, the chief business development officer at the company, which also runs South Africa’s ports and port terminals.

In Democratic Republic of the Congo (DRC), Transnet has been invited to be part of an SA Inc (South African) group pursuing rail, port, and rolling stock opportunities in that country, Kani reveals. The consortium includes South African development finance institutions (DFIs) and a private company.

“This [DRC] collaboration demonstrates what is possible when we leverage on each other’s strengths as South African companies,” she says.

“To date, Transnet Engineering has been awarded a contract to manufacture 80 flat-bed wagons for SWALA, an international logistics company based in Lubumbashi,” says Kani, who believes the deal “is testament to Transnet’s engineering capabilities”.

As “the largest state-owned logistics company, with over 30,000km of rail network, eight commercial ports, and 16 port terminals”, Kani says Transnet has “the expertise, the capacity, and the appetite to offer the support required by our counterparts, including the private sector, in the port, rail, and engineering space”.

This represents a shift for Transnet, which previously had an all-encompassing strategy focussing on Africa and other parts of the world, such as the Middle East and Asia, according to Kani. “But we realised we could not be everywhere with our constrained budget and resources; so a decision was taken to zoom in on Africa – for now,” she says.

Collaborative relationships

“Transnet is open for business on the continent,” says Kani. She also quickly clarifies that “we’re not saying we know it all, but we think that, with the expertise we have, it would be important that we establish key and collaborative relationships with our counterparts: railway and port authorities”.

Conversations are ongoing with other rail authorities and port operators in the region. Kani describes the state of relations as healthy, but admits that these processes tend to be lengthy, which has a bearing on when transactions close.

Ours is to – through Transnet Freight Rail and as members of the Southern Africa Railway Association [SARA] – participate in playing a strategic role by leveraging our rail network…

Tangible projects in play include the revitalisation of the North-South Corridor to facilitate the export of copper, manganese, and cobalt out of DRC and Zambia through the Ports of Durban and Richards Bay as well as South African import flows to DRC.

However, the corridor has not lived up to its volume potential of carrying 400,000 tonnes in goods a year because of rolling stock shortages and poor infrastructure.

“Ours is to – through Transnet Freight Rail and as members of the Southern Africa Railway Association [SARA] – participate in playing a strategic role by leveraging our rail network linking the hinterland to the ports whilst enabling infra-Africa trade,” she says.

Transnet is seeking funding through SARA from DFIs to develop a bankable feasibility study for the corridor, says Kani. The Transnet executive thinks doing this will unlock funding for infrastructure development. She envisages a 40-wagon block train being able to operate on the corridor once infrastructure development is realised.

Rail systems in Africa

African Rail Industry Association chairperson James Holley welcomes the focus on regional integration, saying it has the potential to make rail a more efficient and viable alternative to road, which presently dominates freight.

It could also limit delays at land borders and reduce train running times, says Holley, who is also CEO of Traxtion, a rail services company operating throughout the region.

The importance of regional rail integration is that you limit border delays and you improve the efficiency of the train.

“With regional integration, you can have a train that departs, say Durban, and operates all the way through Southern Africa to its final destination, let’s say, Angola,” Holley says.

“In so doing, you could reduce transit times,” says Holley, but interoperability will be an important factor, as well as harmonised access rights across the various countries. Holley does not foresee gauges being a problem.

He says: “You also need to ensure common safety standards, which I think is relatively easy to achieve. It’s what makes rail transportation in places like Europe so efficient. It’s something we have to see [developing] here as soon as possible.”

Holley says rail authorities in the region have made the correct overtures by increasingly offering third-party operators to their networks. “We’re heading in the right direction in terms of the long-term future of the rail systems in Africa.”

Mode of choice

Positive developments in regional integration include eSwatini Rail and CFM in Mozambique running a train service between the two states.

Third-party access has enabled a joint venture Holley is involved in to run a train on 1,975km of track between Dar es Salaam, Tanzania, and Ndola, Zambia. “We run on a third of the time the North-South Corridor averages. We’ve run quicker than [the] road can run to either Dar es Salaam or south to Richards Bay,” he says.

“Those are two examples of how it [regional integration and third-party access] can work and improve rail’s competitiveness as a mode of choice; and start to work against some of this enormous road dominance we’ve seen,” says Holley.