An aerial shot of the container terminal at the Cape Town Port.
Image: Ian Landsberg/Independent Newspapers
The Western Cape government and the City of Cape Town have both welcomed the decision by national Minister of Transport, Barbara Creecy, to initiate a Request For Information (RFI) for private sector participation in South Africa’s rail and ports sectors.
Creecy had described the announcement as a significant step in the government's efforts to partner with the private sector, ensuring that the country’s rail network and ports reclaim their crucial role in enhancing trade and driving economic growth.
Creecy highlighted the urgent need for intervention, citing significant challenges, including infrastructure deterioration, vandalism, theft, underinvestment, and operational inefficiencies that have hindered economic growth.
“The limited availability of State resources to fund infrastructure development and address backlogs has intensified these challenges, severely restricting the ability of State-Owned Entities (SOEs) to fulfill their critical mandates,” she explained.
Premier Alan Winde said that this is good news for the Western Cape economy and makes it easier for more businesses in the province to thrive.
“For far too long these critical logistics sectors have been ignored and allowed to fall into disrepair and dysfunction, to the detriment of South Africa’s economy,” stated Premier Winde.
He added that the Port of Cape Town and smaller ports in the Western Cape are essential to the provincial and national economies.
Cape Town Mayor Geordin Hill-Lewis has welcomed the Port of Cape Town’s inclusion.
“We are relieved to see the Port of Cape Town’s inclusion in government’s testing of market appetite for private sector involvement. The City has been making this case to the national government for some time, and I am grateful to Minister Barbara Creecy for following through on her commitment.
“This is a positive step towards enabling the level of infrastructure investment and expertise needed to co-run the port successfully,” he said.
Mayor Geordin Hill-Lewis.
Image: File Photo
The mayor added that research from the Western Cape Department of Economic Development and Tourism indicates that private sector participation at the Port of Cape Town could result in an additional R6 billion in exports, the creation of approximately 20,000 jobs and over R1,6 billion in additional tax revenues within five years.
Mayco Member for Economic Growth, James Vos, said major infrastructure investment is needed to reduce the impact of wind on port operations, and that this has been a key concern expressed by business leaders.
“When the port is unable to operate sufficiently, exporters are forced to divert their goods to other ports in Durban, Gqeberha and elsewhere at huge costs. The private sector has the services and the expertise and have shown they are willing to assist as much as possible. We will be closely monitoring the RFI process.”
Western Cape Premier Alan Winde.
Image: Henk Kruger/ Independent Newspapers
Winde added the provincial government aims to triple exports to R450 billion and increase private sector investment to 20% of the province’s GDP, and to achieve this a fully operational harbour is needed.
“Equally as important to our economic growth aspirations is fixing the passenger rail and freight sectors. If we can get more of our residents into trains, we can address the road traffic gridlock that is impeding our economy,” Winde said.
“I urge Minister Creecy to proceed with the RFI with urgency. While we welcome this, the Western Cape government will continue to push for the devolution of passenger rail services.”
Agriculture, Economic Development and Tourism MEC, Dr Ivan Meyer, added that the Western Cape's agricultural exports, currently constituting 55% of South Africa’s primary agricultural exports, have the potential to create 22,900 new jobs in the region through a 5% increase in exports.
“This holds the potential to significantly increase exports and imports in the Western Cape, thereby improving the region's economic outlook. It will also help reverse the losses suffered by the agricultural industry over the last few years.”
Mobility MEC Isaac Sileku, said: “This is a positive move towards the reform of rail and the actualisation of commitments made in the Roadmap for Freight Logistics and the White Paper on National Rail Policy.
"On average, the Northern Cape to Saldanha corridor transported 50,85 million tons of Iron Ore and 4,4 million tons of Manganese between 2022 and 2023. Therefore, this move will present immense opportunities for private investment in rail, which will drive efficiencies and spur on a much-needed modal shift from road to rail,” Sileku said.
“We encourage stakeholders in the Western Cape and beyond to engage with the RFI process to help unlock the full potential of our rail and logistics network.”
theolin.tembo@inl.co.za