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Public Enterprises Minister Pravin Gordhan sought help, and the Chinese delivered, but it remains unclear whether government is interested in the plan
When Public Enterprises Minister Pravin Gordhan asked for a solution to not only Transnet’s locomotive problem but also South Africa’s wider energy and logistics crises during a recent visit to China, a consortium led by the state-owned China Communications Construction Company (CCCC) went to work.
The R250 billion plan it came up with and presented to Gordhan in August makes one thing clear: the time for tinkering is over. South Africa needs an extensive plan to revive its economy, akin to the US Marshall Plan to revive the European economy after World War II.
This is in line with the so-called Belt and Road Initiative of the Chinese government launched in 2013 by President Xi Jinping to invest in infrastructure in more than 150 countries worldwide. It is a key element of Xi’s foreign policy.
South Africa has been suffering rolling blackouts of two to 10 hours per day almost daily this year as electricity supply cannot keep up, even with shrinking demand. In addition, mines, factories and farmers have increasingly struggled to get their products to market, especially those meant for export, due to Transnet’s failing rail and port services.
The Minerals Council SA estimates the losses in the mining industry due to problems at Transnet at R30 billion, with some of its members embarking on retrenchments as a result.
Transnet recently saw the departure of its group chief executive officer (CEO) Portia Derby, group chief financial officer Nonkululeko Dlamini, and the CEO of Transnet Freight Rail (TFR), its largest subsidiary, Siza Mzimela — and it is not clear when these positions will be filled permanently.
Mzimela has blamed Transnet’s problems largely on its locomotive problem, which stems from a botched contract with China Railway Rolling Stock Corporation (CRRC) to buy 1 064 new locomotives. The contract was set aside in court, and the two companies have been unable to settle the outstanding issues. As a result, CRRC has withheld delivery of hundreds of locomotives as well as spares for those Transnet did take receipt of.
According to Mzimela, 378 of Transnet’s locomotives are in the repair shop, 300 of them being those bought from CRRC.
CCCC now proposes to lease all the locomotives from Transnet together with coaches and railway lines and appoint an operator to provide the service using state-of-the-art rail management systems. — Moneyweb.
Online Reporter