September 30, 2022

Transnet is steadily improving its performance, says finance minister

State-owned rail and port company (SOE), Transnet, is steadily improving its performance and has made progress in improving its financial position to allow for greater investment, Finance Minister Enoch Godongwana said.

The development is contained in the second quarter report of Operation Vulindlela (OV).

In the second quarter, the VO noted progress in:

The National Energy Crisis Committee (NECOM) was established to oversee the implementation of additional measures to address power shortages and end-of-load shedding.

Comprehensive review of work visa system completed, with detailed recommendations for attracting skilled immigration and investment.

National Water Resources Agency Bill approved by Cabinet for public consultation.

The backlog of water use licenses has been cleared.

Revised raw water pricing strategy developed to provide policy certainty in the water sector.

OV was created in October 2020 as a joint initiative of the Presidency and the National Treasury to accelerate the implementation of structural reforms.

It is a whole-of-government approach through which ministers, departments and entities implement reforms. A Vulindlela unit within the Presidency and National Treasury monitors progress, addresses challenges and actively supports implementation.

The five key objectives of OV are:

electricity supply stabilizes

Reduce costs and improve the quality of digital communications

A sustainable water supply to meet demand

Competitive and efficient freight transport

A visa regime that attracts skills and develops tourism

Publishing the report on Friday, Godongwana said the country had experienced significant challenges with both ports and rail infrastructure.

These, he said, were “resulting from security issues, insufficient investment in equipment, procurement processes marred by state capture and poor operational performance.”

He said: “However, Transnet is steadily improving its performance and has made progress in improving its financial position to allow for greater investment in the future.”

This month, he said, requests for proposals for private sector participation in rail are expected for 16 slots made available by Transnet on the Durban-City Deep and Pretoria-East London lines.

“It is important to recognize that this is only the first step in allowing third parties to access the freight rail network,” he said.

The Minister said that OV expects in the coming months to pass the Economic Regulation of Transport Bill, which will establish an independent economic regulator of transport and enable properly regulated and non-discriminatory access to the network beyond these initial slots.

“In addition, tenders for private sector participation in container terminals at Durban and Ngqura Ports will also be released this month, to ensure partnerships are in place by January 2023.

“This is a major step forward to enable experienced international terminal operators to invest in infrastructure expansion and improve port operations management,” he said.

The Minister said the logic of these reforms was that port and rail infrastructure would remain state property, while encouraging and enabling competition in operations to improve efficiency and leverage government investment. private sector.

“During the next quarter, we will prioritize reforms in the transport sector with the same degree of urgency with which we responded to the energy crisis in the previous quarter,” he said.

Also speaking at the briefing, Minister for the Presidency Mondli Gungubele said that since the establishment of OV, the government had regularly tackled the constraints preventing South Africa from creating jobs. and stimulate economic growth.

“We have identified the key ingredients for higher growth in South Africa,” he said.

He said if OV achieved the five key targets, the government was confident it could put South Africa on a fundamentally different growth trajectory and start creating jobs.

“That’s the premise of (OV) and why the president has made structural reforms our top priority.”

Last month, President Ramaphosa unveiled the country’s energy action plan, which aimed to tackle power generation.

Gungubele said the actions build on the foundations already laid in the energy sector over the past year.

“Certain licensing thresholds have been raised. The embedded generation project pipeline has grown to over 80 projects with a combined capacity of over 6,000 megawatts,” he said.

The joint task force set up by OV, led by Minister Godongwa, to support investment in new generation capacity has implemented several key changes.

These, he said, include designating projects as strategic infrastructure projects and streamlining regulatory requirements.

“Thanks to these efforts, the average time for project registration by NERSA has been reduced from four months to just 19 days. The time to obtain environmental clearance has been reduced from nearly 150 days to just 57 days. Shell capability has been enhanced in Eskom’s Network Access Unit to speed up network connection approval [for] that this project moves forward as quickly as possible.

Work, he said, has already begun to ensure that the energy action plan is quickly and fully implemented.

(With contributions from the South African government press release)