Urgent need for private sector investment in South Africa's transport infrastructure
Image: Ayanda Ndamane / Independent Newspapers
Transport Minister Barbara Creecy on Wednesday said the limited availability of state resources to fund infrastructure development made private sector investment critical.
Delivering her budget speech in the National Assembly, Creecy said they have just concluded a Request for Information process to guide the private sector investment in five priority rail and port corridors.
'Transnet will issue Requests for Proposals from the end of August 2025, and so begin the formal procurement process,' she said.
Creecy also said they have to enhance the involvement of additional operators as a way of extending freight logistics capabilities of the country and region, beyond what the public sector alone would have been able to accomplish.
'It is important to point out that as an economy, we need freight logistics operators that can compete, but that can also complement each other when the need arises, for the benefit of our country and region.'
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The minister explained that the Cabinet approved a Private Sector Participation (PSP) framework in 2023 to guide private sector involvement across the logistics sector value chain.
'The department has concluded a Memorandum of Agreement with the Development Bank of Southern Africa (DBSA) and the National Treasury, appointing DBSA as the hosting institution for the unit. We have established the Interim Rail Economic Regulatory Capacity to create fairness and transparency for third-party operators, improve network utilisation, increase competition, and reduce costs.'
She also said the open access to the rail network will allow train operating companies to increase the volume of goods transported by rail, while the network infrastructure remains state-owned.
'As part of the rail reform programme, we have also created the new Transnet Rail Infrastructure Manager to have a dedicated focus on the management of the rail infrastructure. The Transnet Freight Rail operating company would now focus on the transportation of rail commodities through its rolling stock.'
She added that they cannot afford to wait until the PSPs reach financial close before launching an ambitious programme to rehabilitate Transnet's rail network and rolling stock, as well as port infrastructure and equipment.
DA MP Thamsanqa Mabena said Transnet must accelerate the process to issue rail concessions on the five priority lines.
'We believe the participation of the private sector will assist with injecting much-needed capital and expertise to provide relief to the constrained fiscus,' Mabena said.
Creecy told the MPs that the Passenger Rail Agency of South Africa (Prasa) had, by the end of May 2025, successfully revived 35 out of 40 corridors and sections of service lines.
'We continue to deliver at pace with Prasa achieving an unaudited figure of 77 million passenger journeys for the last financial year and 116 million passenger journeys for the 2025/2026 financial year. Our competitive pricing model for commuter passengers will ensure that working-class communities take advantage of our offerings.'
Prasa has been allocated R66.1 billion over the medium term.
'This significant budget is for maintaining, recovering, and renewing rail infrastructure, rebuilding the signaling system, rolling out new train sets to priority corridors, and increasing rail passenger trips.'
Creecy also said the Airports Company of South Africa has been allocated R21.7 billion for infrastructure development.
'This will improve facilities for passenger safety and comfort, over the medium term, and build a new freight terminal at OR Tambo International Airport. In addition, we are fast-tracking projects to ensure reliable availability of jet fuel to all airlines at all our airports, as well as the general upkeep and upgrading of the facilities and technologies at each of our airports to improve both the security of passengers and cargo, as well as the convenience of airport users.'
The minister further said the South African Airways (SAA) was pursuing a bold route expansion strategy to strengthen its regional and global footprint with new regional routes from Johannesburg and Cape Town.
She said the airline has begun a measured fleet expansion to meet growing demand.
Creecy also said the national carrier was self-funding its operations and fleet growth, while remaining open to a strategic equity partner as part of its long-term restructuring.
'With unencumbered assets and renewed profitability, SAA is well-positioned to drive economic value through expanded international services, job creation, and increased contributions to tourism and trade.'
mayibongwe.maqhina@inl.co.za
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