Lynne Brown. Picture: TREVOR SAMSON

Lynne Brown. Picture: TREVOR SAMSON

GOVERNMENT is working towards introducing greater participation of the private sector in transporting freight on the Transnet rail network, Public Enterprises Minister Lynne Brown indicated on Thursday.

The plan was to allow private-sector trains to operate not only on branch lines — which has long been on the government’s agenda — but on the main lines as well.

She stressed that more space within the Transnet-monopolised freight-rail system had to be created for private-sector participation. This is something for which the industry has long lobbied, complaining that the economics of rail freight required a scale that branch lines could not provide.

Manufacturing Circle CEO Coenraad Bezuidenhout welcomed these steps to secure more private-sector participation in freight rail, “especially for the benefits that this may have for local rolling stock manufacturing”.

Ms Brown also revealed at a media briefing on the work of the economic cluster of departments that the noncore state-owned assets had been identified that could be sold, in line with the announcement made by Finance Minister Nhlanhla Nene in his medium-term budget policy statement speech.

The minister said Treasury was considering the proposals. She and Transport Minister Dipuo Peters have signed a memorandum of understanding to establish an interim rail regulatory capacity so there could be “private-sector participation in the rail environment”.

This arrangement would persist until a Single Transport Economic Regulator (STER) was established and would ensure that Transnet did not have an unfair advantage due to its monopoly of the sector.

Stakeholder consultations on the establishment of the STER — which will manage issues such as competition, accessibility and the price-tariff regime — have started.

The plan to create a STER has been on the drawing board since 2011. Its role would be to regulate the pricing of all transport infrastructure including airports, roads, ports and railways.

Acting transport director-general Mawethu Vilana said the memorandum was necessary to manage the access of the private sector to the Transnet rail network.

It would determine the basis on which this access took place and how tariffs would be set. It would be a transitional measure to address the economic regulatory gap pending the finalisation of a rail policy.

“We move from the premise that Transnet cannot, through its balance sheet, carry the necessary investment to move freight on our railways. There is therefore a role for the private sector to come in and participate. This role will not be limited to branch lines.”

Mr Vilana said the private sector could invest to provide their own capacity in wagons and locomotives. “The issue of access becomes paramount,” he said.

“If you are going to bring in the private sector to operate branch lines, there will be a need for them to access the main lines.”