Network Statement a major step in rail reform – B4SA

Industry organisation Business for South Africa (B4SA) welcomes the release of the Network Statement as an exciting and significant milestone in the journey towards meaningful rail sector reform in South Africa.

“The Network Statement represents a pivotal step in unlocking the potential of South Africa’s rail network through third-party access, which is one of several ways identified to bring private sector participation into the system,” says B4SA Transport and Logistics senior executive Ian Bird.

Other options, such as concessions, allow private operators to manage sections of the network and may involve different cost structures for logistics users, he notes.

The Network Statement was published by the Transnet Infrastructure Rail Manager (TRIM) and will shortly be gazetted by Transport Minister Barbara Creecy.

In addition to tariff structures, the Network Statement addresses vital technical and operational considerations. The modelled tariff structure reflects a balance between stakeholder demands and Transnet’s initial proposals.

“There has clearly been a lot of work put into the final Network Statement, with tiered pricing that has been globally benchmarked.

“The outcome is a commercially responsible approach that is palatable for industry and supports the country’s road to rail strategy,” says Bird.

The tariff structure and pricing only apply to Transnet’s current financial year, which ends in March 2025, and work has already begun to develop the 2025/26 tariff framework and pricing.

Longer-term tariff pathways will be shaped by the competition inquiry into the sector and the creation of the Transport Economic Regulator (TER), he adds.

Further, B4SA also highlights the importance of leveraging private sector resources to enhance infrastructure without impacting Transnet’s balance sheet.

The rapid establishment of the Private Sector Participation (PSP) Unit within the Development Bank of Southern Africa, under the oversight of the Department of Transport (DoT), is an essential step to effectively manage diverse private sector participation processes.

“For now, B4SA remains focused on ensuring the reform process is robust and inclusive, and ultimately delivers the efficiency and competitiveness needed to unlock South Africa’s economic potential and create much needed jobs,” he notes.

Meanwhile, the release of the Network Statement reflects the significant work of the Interim Rail Economic Regulator Capacity (IRERC), Operation Vulindlela, the DoT and Transnet in implementing South Africa’s long overdue rail policy, which underpins the Freight Logistics Roadmap (FLR) approved by Cabinet in December 2023.

“B4SA remains fully committed to the FLR as a cornerstone of the country’s broader reform agenda within South Africa’s supply chain,” said Bird.

As part of this reform journey, B4SA continues to collaborate closely with the IRERC, the DoT, Operation Vulindlela, Transnet, the National Logistics Crisis Committee (NLCC) and other industry stakeholders.

“The partnerships, supported by international expertise from organisations such as the World Bank and the Resource Mobilisation Fund (RMF), are key to driving structural reform and operational recovery, with the ultimate aim being to create a sustainable and competitive supply chain in South Africa.”

However, while this progress is encouraging, it will still be some time before South Africa sees concrete, tangible results.

“We have started a process of institutionalising a key market foundation, but significant work remains to fully implement reforms, maximise maintenance efforts and achieve operational recovery.

“This process must continue to be constructive, inclusive, and focused on delivering long-term benefits for all stakeholders,” emphasises Bird.