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Transnet says rail plans will cost R1.5trn

Sep 22 2015 15:20

Johannesburg - Transnet’s plan to widen the country’s railways will cost as much as R1.5trn, take years to implement and require the cooperation of neighbouring nations including Mozambique and Botswana, according to state transport company.

South Africa should start to convert its 20 000 km of track to standard-gauge rail size from the narrower Cape gauge, Transport Minister Dipuo Peters told reporters on Tuesday. That would bring the network in line with about 60% of other countries, boost capacity and reduce transportation costs, she said.

Transnet acting CEO Siyabonga Gama said that while the company supports a move to standard gauge, the policy “needs further investigation” to determine its viability.

“We did an assessment and we found out that if we had to create 15 000 km of track, we would need up to R1.5trn,” he said in an interview after the announcement. “It would be a very expensive exercise.”

Enormous investment

The government “recognises the enormity of the investment required in achieving the set objectives and that existing sources will be inadequate to fund all the requirements,” Peters said.

“It will therefore be prudent and necessary to attract additional sources of funding.”

Transnet owns and operates railways, freight trains, ports and pipelines in South Africa, and is responsible for the transportation and export of commodities such as coal and iron ore. The company plans to expand in Africa and the Middle East, and wants 25% of revenue to come from outside its home market by 2025.

“Our trains need to go to Mozambique, Zimbabwe, Botswana, to Namibia, those countries would also need to work on that gauge,” Gama said.

“Every country will need to start moving toward that direction. All I am saying is it will take a very long time, beyond my lifetime.”

transnet  |  rail infrastructure
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