Sasol has thrown Transnet Freight Rail (TFR) a five-year lifeline to ensure the survival of the freight rail sector in moving bulk chemicals to a number of companies within the mining, agricultural and manufacturing industries.

The petrochemical giant and TFR yesterday announced a first-of-its-kind public-private partnership to improve rail transport reliability in South Africa.

Under the five-year agreement, Transnet will deliver ammonia from Sasol’s Secunda and Sasolburg facilities to the company’s customers through a dedicated fleet of 128 ammonia tankers.

Sasol Chemicals produces and sells more than 540 000 tons of ammonia annually.

Ammonia is mainly used to make a variety of fertilisers and industrial chemicals for the agriculture, mining, textile and metalworking industries.

In return, Sasol will fund Transnet’s maintenance and repair programme for the fleet.

Sasol vice-president for base chemicals David Mokomela said they were proud of this public-private partnership, which signals progress in advancing the country’s growth objectives.

“Sasol’s partnership with Transnet was an investment in South Africa’s rail infrastructure network, a critical economic driver for the country and a key business enabler for Sasol,” Mokomela said.

“The result will improve service to our customers and give us the transport capacity and reliability we need to respond to growing market demand.”

TFR and Transnet Engineering (TE), who will execute the Sasol ammonia fleet’s maintenance and repair work, expect additional revenue generation from anticipated increased haul volume and the Sasol-funded maintenance and repair work.

TFR, an operating division of Transnet and owner of South Africa’s railway, ports and pipeline infrastructure, provides the rail network infrastructure and operates rail services across major corridors to transport a broad range of bulk and general freight commodities, including mining, agricultural, manufacturing goods, bulk liquids, containerised freight and automotive units and components for export, regional and domestic markets.

Acting TFR chief executive Russell Baatjies said this strategic partnership with Sasol demonstrated what was possible through collaboration and partnership, a foundational element of TFR’s Response Strategy.

“We appreciate Sasol’s support of this deal. It is a significant step toward addressing the industry’s current capacity challenges and protecting the ammonia rail supply – a critical material used in South Africa’s agriculture, mining and chemical markets,” Baatjies said.

Freight Rail is recognised as a heavy haul rail operator for coal and iron ore on export lines and recently extended this capability to export manganese on the iron ore and Gqeberha lines.

The Freight Rail network and rail services provide strategic links between ports, freight terminals and production hubs.

The African Rail Industry Association CEO Mesela Kope-Nhlapo said this partnership between Transnet and Sasol was a great start to support the recovery plan by the board of Transnet.

Kope-Nhlapo said the marriage between private sector and public sector to get the goods moving for the best interest of this country was a crucial step to get the economy going, and highlighted the role that business can play to ensure the survival of Transnet.

“I think that there is really no interest in business to get Transnet out of the market. A partnership is important to get the goods moving. A partnership is important to have maintenance done on the rolling stock,” she said.

“It is important that we start seeing such partnerships to ensure that our logistics sector survives. And in turn, we know that logistics are the backbone of the economy.

“A partnership is important to get the goods moving. A partnership is important to have maintenance done on the rolling stock.

“If we don’t get Transnet working 100%, manufacturing in the country will continue to decline. We will not be able to manufacture anything for export. So therefore the survival of Transnet is of utmost importance to the entire value chain within the railway sector.”

Road Freight Association CEO Gavin Kelly said they noted the Sasol and TFR partnership.

Kelly said the question remained whether Transnet could actually supply a reliable and dependable service, which would bring reliable supply for the fertiliser and other industries that rely on the ammonia.

“Where there are bulk, single commodity, point to point freight transport requirements - then rail should play its role. It needs to carry its weight in the greater South African economy,” Kelly said.

“Road freight will still play a role - and the ammonia sector will have logistical operations that will be better suited to road freight operations - large and small.

“The RFA keenly looks forward to a synergised logistics network - where all the sectors of the country can operate in an economy that has a reliable and secure set of transport alternatives.”

BUSINESS REPORT

#chemicals

AECI boosts mining division's black ownership in R522m transaction

Sasol throws five-year lifeline to Transnet to keep bulk chemicals fleet moving

ARC - Growing women in agriculture, science and technology

Chemicals in burnt SA warehouse caused ’considerable’ environmental damage - authorities