OPPOSITION by Transnet and Public Enterprises Minister Malusi Gigaba appears to have derailed a plan to split Transnet Freight Rail into two companies, as proposed in a Department of Transport green paper on rail’s future in SA.
Rail policy was a "very complex thing", transport director-general George Mahlalela said last week, while explaining the decision "to change the thrust of rail policy away from one that focused on institutional reform and clarity" towards one "that encourages development and investment".
The green paper on rail policy that was due to be released last year would be published next month, Mr Mahlalela said. The delay was to allow time for the various departments to consult with each other on the state’s development objectives. This included being sensitive to the objectives of the Department of Trade and Industry’s Industrial Policy Action Plan 2.
In August last year, the National Planning Commission was briefed on the Department of Transport’s view on the future role of rail in the economy. This was originally set out in the National Freight Logistics Strategy — approved in 2005 and reviewed last year — which outlined a plan to create a national rail infrastructure agency, leaving Transnet to operate rail services. The idea was to give private sector rail operators access to the network, increase services and provide competition.
The suggestion that Transnet Freight Rail may be split elicited a swift and angry response from company CEO Brian Molefe, who said it would be "disastrous" and would threaten Transnet’s ability to raise capital on the bond markets.
Mr Molefe did not respond to requests for comment.
Transnet spokesman Mboniso Sigonyela could not comment when contacted last week.
Elena Ilkova, a fixed-income analyst with the Rand Merchant Bank credit research team, said the news was "interesting" after all the talk about the vertical separation of Transnet Freight Rail.
"I would not expect to see any change in pricing on the basis of this news, Transnet holders would not be concerned in the short term.… If it is going to be off the table from a long-term point of view, that is very positive," she said.
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