President Cyril Ramaphosa has revealed that his administration is not moving in the direction of privatising any state-owned companies as the government initiates reforms to clean up their balance sheets and revive their performance.
In a meeting with his party, the African National Congress, the South African president mentioned that private sector investment was necessary to mobilise funds for economic infrastructure given the government’s limited fiscal space. However, the involvement would be “subject to stringent regulations,” which would enable energy security and exporting of critical goods.
The presidency also revealed that it has intentions to allow private companies to access rail lines and will offer them rights to operate ports and rail routes, in a plan to reverse the collapse of the ports and freight-rail sector under state-owned Transnet SOC Ltd. that’s cost the economy at least $26.7 billion since 2010. The president said: “We see this as an enabling process by restructuring our state-owned entities,”
“By mobilising investment, we will help to improve their financial position, enhance their performance and increase their competitiveness.” – he added.
The presidency said that the roadmap for Transnet’s reform agenda will be submitted to the cabinet for consideration by the first week of November.
In a separate briefing on Monday, the head of the presidency’s project management office, Rudi Dicks said that the ultimate objective is to move from a system in which Transnet has a monopoly in rail operations and container terminal operations, with associated inefficiencies to a full competition in operations.
The main point of the plan is to maximise volumes on the nation’s core network, which carries general freight, by opening access to as many operators as possible. Volumes of goods and commodities, including iron ore and coal for export, have dropped because of issues including vandalism, idle locomotives and cable theft.
