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Transnet passes first milestone in slot sales debut

Transnet passes first milestone in slot sales debut

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Transnet says it has concluded the evaluation of applications received for the sale of slots on the Container and Cape Corridor, which was advertised in April and closed at the end of August but will not reveal leading bids at this stage.

In a statement last night, the utility said in finalising the slot sales process, and as communicated to all interested and qualifying parties, there are governance activities underway, including the recommendation and final approval of the evaluation outcome for both the Container Corridor (Gauteng to Durban) and the Cape Corridor (Gauteng to East London).

This follows Transnet’s open market process, where interested and qualifying parties were invited to apply for an initial 16 slots.

Transnet said in terms of this phase of the project, third-party slot access would be valid for a two-year period with a contracting period of 24 months, in terms of which the parties would enter into a Third-Party Access Agreement for the period.

The system will operate by means of temporary occupation of sections of the network to enable the end-to-end passage of a train, with Transnet Freight Rail (TFR) retaining ownership of the network.

Briefing Parliament's Standing Appropriations Committee yesterday, Transnet CEO Portia Derby strongly objected to reports that the two-year contract period was too short to recoup investment for winning operators, who would have to source capital for equipment to operate their time slots.

Derby said the two-year period was for Transnet to gauge the parameters of operations and gauge the appetite for the concept in the market.

"We are aware that the two years is not the ultimate number. We are looking at how to design the system to not exclude black players, women and other emerging sectors in the economy. Transnet is a leasing company. We have the capacity. In the two years, we will have worked out what we need to do and seen the appetite, which is very healthy.

“In the next year or so, we will launch the programme with different terms. It could be even 10 years or so,” she said.

Derby also said Transnet was looking at ways to fit in black empowerment partners into the industry as there currently were a lot of historical contracts and commitments that it was locked into, for example, the Richards Bay Coal Terminal (RBCT), which is owned by a coalition of mining companies for which Transnet has to deliver about 71 tons before it can make room for other players.

She said the recently launched White Paper on Rail had freed up Transnet to partner with the private sector in developing the network after it annulled what is termed the 1987 De Villiers Order, which directs that priority for the development of infrastructure be given to road rather than rail.

"The private sector imposes too many conditions for its investment. The only way to fit in black, women, or emerging players in the industry is to first cater for the tonnage contracted to the private sector, or if the investment is by ourselves that we can look at fitting in emerging players," she said.

The sale of these slots to third-party operators expands the access that Transnet already grants to Prasa, approved Branch Line Operators, the luxury hospitality services provided by Rovos Rail, and the Blue Train and Steam Train Operators to the rail network.

Derby told Parliament that the Blue Train had been ceded to Prasa from next year after the regulator pointed out that Transnet needed to focus on freight logistics and leave passenger operations to the other state-owned entity.

BUSINESS REPORT

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