We were honoured to host South Africa’s Minister of Transport, the Honourable Barbara Creecy, at our recent CEO engagement. The transport sector is complex and has posed challenges that have hindered our local economy for several years. Addressing these issues requires innovative solutions and effective collaboration. The day’s discussions included an overview of South Africa’s current transport landscape, highlighted by an interactive dialogue between Minister Creecy and attendees.

South Africa’s Transport Landscape

The government relies heavily on the Department of Transport to achieve three main objectives: promoting inclusive growth and job creation, improving social welfare to address poverty and inequality, and building a capable state. The absence of an efficient, effective, and affordable public passenger transport system significantly impacts our economy. Over the next five years, the Department of Transport aims to achieve the following targets:

• Freight Transport: Increase rail freight from 149 million tonnes to 250 million tonnes per annum by the end of this financial year.
• Port Efficiency: Enhance crane moves from 15-20 to 25-30 per hour.
• Passenger Rail: Expand passenger journeys in the PRASA system from 30-40 million to 600 million annually.
• Aviation: Grow aviation passenger journeys from 18-19 million to 30 million per annum.
• Air Freight: Increase air freight from 300k-400k tonnes to 1.2 million tonnes annually.

Transnet

Transnet has struggled with underperformance in rail and port operations due to years of underinvestment in infrastructure, worsened by sabotage during COVID-19 that rendered certain lines inoperative. Currently, Transnet faces shortages of locomotives and cabling, leading to signalling failures. To address these challenges, a short-term recovery plan aims to boost freight volumes through infrastructure investments and repairs on priority lines:

• Coal Line: To Richard’s Bay, including connections for chrome and magnetite.
• Durban/Gauteng Line: Handling 60% of non-ore freight.
• Gauteng/Ncku Line: Primarily for vehicle exports.
• Sishen/Saldanha Line: For iron ore and manganese transport.

Recent improvements have raised the average freight volume to approximately 162-163 million tonnes per year. A “war room” has been established for daily meetings among stakeholders to tackle immediate challenges. New equipment has been ordered for ports, including cranes expected next year, which will enhance loading and unloading efficiency. Transnet’s long-term strategy acknowledges the necessity for third-party participation, as outlined in the Freight Rail Strategy adopted by Cabinet in December 2023 and the National Rail Policy from 2022. A network statement detailing services and pricing will be available by the end of 2024.

PRASA

PRASA has made commendable progress by repairing 31 of its priority lines (with a target of 34 by the end of 2024) and refurbishing 300 stations. There are ongoing discussions about opportunities for third-party participation concerning PRASA’s property portfolio, including railway stations and retail spaces.

Aviation

The focus is on ensuring proper flight procedures at all major airports before the festive season. Plans have been submitted to the Civil Aviation Authority (CAA) so that both the CAA and ACSA are well-prepared. Next year will also see an emphasis on inflight procedures. Additionally, two significant policy documents—the Comprehensive Aviation Policy and The Airfreight Cargo Strategy—will be presented to Cabinet next year.

Other discussion points included:

• Port Operations: The need for enhanced stakeholder engagement regarding South Africa’s unique port rotation schedule to address cargo imbalances effectively.
• Cargo Handling Investment: The reduction in ground service providers has led to inefficiencies that ACSA’s Board is currently addressing.
• Extended Port Operations: Discussions are underway about extending port operations over weekends and at night.
• Seasonal Planning: Equipment procurement plans include short tensioners for stabilising vessels in high winds.
• Labour Relations: New labour laws are set for negotiation early next year, emphasising the importance of integrating labour into the value chain.

The introduction of third-party players raises concerns about job security; however, maintaining the status quo could lead to redundancies as well. Transforming existing practices is essential for increasing freight volumes and fostering growth.

Additional Considerations

The potential for offshore bunkering could position Cape Town as Africa’s leading port for petroleum trade, contingent upon thorough environmental assessments. Furthermore, with e-commerce growth projected over the next three years, there is a critical need to evaluate road safety measures due to high accident rates—over 11,000 lives lost annually—and associated economic costs.

Lastly, discussions are ongoing regarding the devolution of passenger rail services to provincial levels, with a National Rail Masterplan under development that considers demographic factors for financial sustainability.

We extend our sincere thanks to Minister Creecy for her willingness to engage with our regional community and for the clarity of vision she shared during the engagement. Her insights inspire confidence and bode well for future collaboration between business and government. We would also like to thank our sponsor, Deloitte, for hosting this event. Accelerate Cape Town remains committed to facilitating public-private partnerships aimed at driving economic growth and prosperity.