Logistics roadmap needs to be open

It is never healthy when the government does selective background briefings and confidential consultations over policy documents rather than release them in full to the public for all to read. That’s been the case with the Roadmap for a Freight Logistics System in SA, details of which were leaked to Bloomberg this week. The document, compiled by the presidency with input from the national logistics crisis committee, is crucial for the future of SA’s rail and port services and for the economy. One has to wonder how fiercely the trajectory it has in mind is being contested behind the scenes in the government.

It certainly seems to envisage a trajectory very different to the one that is enabling a dysfunctional Transnet to do severe damage to SA’s economy. That is welcome. It is urgent that the government forge ahead with reforming the entire logistics industry.

Those reforms need to ensure that access to SA’s rail and port infrastructure is opened up to new private operators that can bring expertise, efficiencies and finance to expand and upgrade the services. That does not mean privatisation. And it’s unfortunate that the politics around SA’s state-owned enterprises is so poisonous that the sponsors of the roadmap have to spend an inordinate amount of time dealing with the privatisation red flag, or red herring.

This is not about selling off Transnet itself, or even necessarily about selling off the core rail and port networks it owns. It is about private participation — in whichever form — to enable efficient new players to access the infrastructure and enter the market.

SA needs a clear definition of the limits on Transnet’s role in an industry which it will not monopolise in the future. And it urgently needs a clear path to ensure that Transnet no longer has the power to stop or delay the entry of those new private competitors or partners. That makes the roadmap urgent.

The state committed a while ago to granting new private operators slots on key rail corridors, and to bringing new global operators in to run key container terminals at Transnet’s ports. And Transnet has paid lip service to private sector participation. But it is the way that it has gone about this that reflects its reluctance.

Leaving Transnet to introduce competition to itself was unlikely to fly. It has gone to market on terms that few private operators found attractive. And news of its failure to sign contracts even with those it has chosen seems to illustrate the lack of will, and bureaucratic hurdles, frustrating private participation.

A big concern with the roadmap is that it may leave Transnet still largely in charge. That’s particularly so in rail, where the new infrastructure manager that will award slots to new players will stay within Transnet. That raises questions about any claims to level the playing field for new private operators.

The Transnet National Ports Authority is more likely to be an independent landlord, especially now that it finally has a new board with well-respected directors.

The question is whether the roadmap will ensure enough independence, and enough good governance and regulation, to open up SA’s logistics industry to competition and lift investment, efficiency and growth.