SOUTH AFRICA – The country’s state owned freight and logistics carrier Transnet, has today announced bold plans to boost its rail sector to be the fifth largest global carrier of its type. In addition the group claims it will generate 588,000 jobs throughout South African industry by way of the Market Demand Strategy (MDS) announced by President Jacob Zuma in his State of the Nation Address on 9th February 2012. A company statement says, ‘Transnet's primary objective is to optimise the freight logistics system as this will improve the competitiveness of the country's supply chains, and thus promote additional economic activity.’
The $38 billion program is designed to optimise the shift from road haulage to rail by way of improved rail infrastructure thus boosting tonnage from the claimed 200 million tonnes currently carried to 350 million tonnes by 2019. The market share of shipping containers it is said will rise 13% to 92% with costs roughly 25% lower per tonne and the usual resultant environmental benefits. If achieved this will mean 7.6 million TEU’s per annum moving through the country’s ports which will also be funded to cope with the increased rail traffic.
The government has promised that 50% of the new locomotives scheduled for purchase will be sourced through local suppliers in orders worth almost $10 billion and claims Transnet employee numbers will peak at 74,000 in 2018/19 with the balance of promised jobs arising from indirect and ‘economy wide’ employment. Certainly the company have set their sights high at a time when others are concerned at the condition of the world’s economies. The statement today says successful implementation of the MDS will see Transnet’s revenue almost triple from $5.8 billion to $16 billion over the next seven years, ‘driven by strong volume growth’.
Much of the investment will go toward streamlining the supply chain of such bulk products as coal, iron and manganese which exporters say are currently unfairly hindered by lamentably inadequate rail infrastructure and inexcusable port congestion. There will also be investment in the final phases of the New Multi-Product Pipeline which will facilitate a 17% growth in carrying capacity.
Transnet claim its various strategies in past years has left the company in a strong financial position and that employment of the proposed MDS will accelerate investment in freight logistics capacity and will support reliable, efficient and cost effective movement of bulk and manufactured goods.
Photo: Courtesy of Transnet Rail Engineering