Banele Ginidza

The Department of Transport has roped in the Development Bank of Southern Africa (DBSA) and the National Treasury to shepherd the newly formed Public Sector Participation (PSP) Unit in preparation for private investment.

Transport Minister Barbara Creecy revealed the plans to habilitate Transnet through the PSP as Request for Information (RFI) was announced during a media briefing on Sunday.

Creecy said arrangements were at final stage for the DBSA and Treasury to be be hosting institutions for the unit,

The unit will comprise a team with extensive expertise in structuring PSP contracts and procurement, which is expected to to enhance State capacity and provide support to Transnet and Passenger Rail Agency of SA (Prasa) in the procurement of potential PSP projects.

Creecy said the RFI was in response to numerous unsolicited proposals from the private sector offering investment, skills, and expertise to support the rehabilitation and reform of the struggling rail and port systems.

"The department is in the final stages of concluding a Memorandum of Agreement with the DBSA and the National Treasury, appointing DBSA as the hosting institution for the Unit," Creecy said.

"This overwhelming interest has made it clear that the department and Transnet must engage in broad and inclusive market engagement before issuing Requests for Proposals (RFPs) in August this year."

Creecy said the PSP Unit and Transnet will develop the policy-aligned PSP Programme, which will enter the formal procurement phase from the end of August 2025.

She said the process would focus on reform Transnet in accordance with the Cabinet-approved Roadmap for Freight Logistics to ensure a just transition to a reformed rail and port logistics system, prioritising maximum job retention for employees of Transnet and Prasa.

"In this regard we have set up a joint work stream to consult organised labour as the process unfolds," Creecy said.

"We want to safeguard immovable assets by retaining them under state ownership for the benefit of future generations and preventing the balkanisation of the rail and port system as has occurred in other countries."

Creecy said in the in the initial phase, the RFI focuses on select corridors, which will include the Northern-Cape to Saldanha Bulk Minerals Corridor primarily for iron ore and manganese exports, and the Northern-Cape to Nelson Mandela Bay Corridor, primarily for manganese exports.

The RFI will initially focus on several key corridors, including the Northern-Cape to Saldanha Bulk Minerals Corridor, which primarily handles iron ore and manganese exports.

The logistics of transporting these minerals, spanning the complete pit-to-port rail network and associated terminal infrastructure, is a significant undertaking that highlights the scale of investment needed.

Another stage is the Limpopo and Mpumalanga to Richards Bay Bulk Minerals Corridor PSP Project for coal and chrome exports, including provision for magnetite exports in port.

This includes the full pit-to-port rail, port, and terminal infrastructure and equipment supporting coal exports from mines in Lephalale, Limpopo; chrome exports from the ‘Western Limb’ mines in the Rustenburg-Brits region in North West; and coal exports from various mines across Mpumalanga and KwaZulu-Natal to the Port of Richards Bay.

Particular attention is given to the Bayvue precinct, where RBCT coal, chrome, and magnetite are handled through the Dry Bulk and Multi-Purpose Terminals, and the back of port arrangements.

The RFI should actively promote localisation, industrialisation, and support for key sectors such as steel production and local rail manufacturing.

It should also demonstrate commitment to Broad-Based Black Economic Empowerment and gender equality by providing strong support to new six and emerging players in the rail and port sectors, including SMEs and SMMEs.

"It will enable us to articulate the challenges in a structured and coherent way, clearly defining their scope, context, and impact to inform the development of focused, strategic, and sustainable solutions," Creecy said.

"In this regard, the DoT will ensure that the views of a range of other stakeholders are brought into the deliberations, including organised labour."

Transnet spokesperson Ayanda Shezi said the entity embraced the reform and supported the department's efforts and their support to Transnet and the country's freight logistics system.

"All our efforts are geared towards growth of the economy," Shezi said.

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Transport Minister announces new unit to attract private sector investment in Transnet