South Africa taps business to create office to end rail monopoly
- April 8, 2024
- Infrastructure
- 0 Comments
South Africa has asked companies to help it set up an office to facilitate the entry of private operators onto the continent’s biggest rail network for the first time. In a letter sent last month to Business Unity South Africa, the Department of Transport asked the country’s biggest corporate lobby group to help set up a private-sector participation office. It also asked Busa to “support concessioning and investment in freight and passenger networks.” The department asked whether companies would “be in a position to help them set up a unit,” said Khulekani Mathe, chief executive officer-designate at Busa. “We will produce the capacity to populate it and then have nothing to do it.” The transport department didn’t respond to a request for comment. The overture to the private sector over reviving the moribund rail industry is the latest attempt by the South African government to rope in corporate skills in a bid to kick-start collapsing government services ranging from electricity provision to water supply. South Africa’s freight-rail services, run as a monopoly by state-owned Transnet, have deteriorated to the point where iron ore is piling up in stockpiles at mines and coal railings to ports are at a 30-year low. That’s slashed earnings for companies including units of Anglo American and Glencore. It’s also resulted in a lower tax take for the cash-strapped government.
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