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Trevor behind Zuma's plan

Feb 12 2012 11:00 Sake24

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Cape Town – The construction of rail infrastructure worth up to R200bn which President Jacob Zuma announced in his Sate of the Nation address is a response to proposals in the National Development Plan (NDP) that National Planning Commission Minister Trevor Manuel announced at the end of last year.

Manuel’s commission had specifically proposed the integration of railway lines, road infrastructure and water resources in the Waterberg and Mpumalanga, where low-grade platinum mines and chrome mines are being developed. The NDP was publicised in November last year so that interested parties could comment on it. Last week at the Mining Indaba in Cape Town Manuel said the finale version of the plan contained much finer detail.

This will apparently be finalised by April.

The ability of the minerals industry (mining) to stimulate growth is greater than that of other sectors – as long as infrastructural bottlenecks and regulatory uncertainty are removed, says the version presented last year.

“The limited carrying capacity of existing rail lines that transport minerals are constraining growth, especially in the case of iron ore, manganese and coal.”

According to the NDP 92% of all bulk mining products are shipped through the country’s harbours, but 89% of all bulk freight is transported by road. Over the past decade this has destroyed the road infrastructure in large parts of Mpumalanga.

According to Manuel’s Development Plan the coal reserves in the Waterberg must be connected to Mpumalanga so as to supply coal to the power stations there, but also to link up with the coal export line to Richards Bay. The commission warns however that Botswana’s need to gain access to the Atlantic Ocean through Walvis Bay must be kept in mind.

The plan also places great stress on improving the Gauteng-Durban-Pinetown transport corridor.

By 2030 this corridor should be a model of how a freight corridor can be strengthened and optimised. Since by far most of the country’s value-added exports are transported along this route, they should have first preference, says the bulky 440-page NDP.

The route is also the country's most strategic one for bringing about a shift from road freight to rail freight because the most important disadvantage of rail transport - its inflexibility - can be overcome by improving efficiency at the route’s end-points. The key is to have unlimited access to the terminals at the ends of the routes and to considerably expand the handling capacity of the terminals.

That is probably why Zuma budgeted R100bn for port projects, but this sum will also have to include building a manganese terminal in the Coega harbour near Port Elizabeth. The ports are performing very poorly when measured against comparable activities. At the same time port costs are much higher than those of similar harbours elsewhere.

The Planning Commission report says these thoroughfares for international commerce are constraining the country's development goals. The ports' poor performance is largely the result of a lack of competition and of Transnet's business model, which uses port profits to fund investments elsewhere.

 - For more business news in Afrikaans, go to Sake24.com.

 
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