President Ramaphosa Confident in Freight Logistics Roadmap to Boost Investment in Ports and Rail

Acknowledging the challenges faced by the logistics sector, Ramaphosa noted that years of underdevelopment and declining standards have hampered the system's performance.

President Cyril Ramaphosa has expressed confidence that the implementation of South Africa's Freight Logistics Roadmap will catalyze significant investments in the country’s ports and rail systems, unlocking economic growth and creating jobs. He shared this optimism during a question and answer session in the National Assembly on Thursday.

"We are confident that through our efforts and by implementing the Freight Logistics Roadmap, we will enable massive new investment in our ports and rail system," the President stated, emphasizing that an efficient and well-functioning logistics system is critical for the growth of South Africa's economy.

Acknowledging the challenges faced by the logistics sector, Ramaphosa noted that years of underdevelopment and declining standards have hampered the system's performance. "For many years, our rail system and ports have suffered from underinvestment in infrastructure, equipment, and maintenance. This has contributed to deteriorating performance," he explained.

The President pointed out that the situation was worsened during the state capture period, where funds were diverted away from essential infrastructure needs. The resulting poor condition of the rail network and inefficient port operations now present a significant constraint on economic growth, particularly affecting key sectors like mining, agriculture, and manufacturing.

Collaborative Efforts with the Private Sector

To address these challenges, the government is urgently working to restore the logistics system to world-class standards. This restoration involves a collaborative approach with the private sector, initiated during the sixth administration through Operation Vulindlela. This joint initiative of the Presidency and National Treasury aims to accelerate structural reforms and support economic recovery by modernizing network industries, including transport.

Ramaphosa assured the National Assembly that, even as private sector participation increases, the state will retain ownership of critical infrastructure. "Private sector participation is being introduced in container terminals, starting with an equity partnership between Transnet and an international terminal operator for the Durban Pier 2 Container Terminal," he said.

To further explore private investment opportunities, a dedicated Private Sector Participation Unit has been established by the Department of Transport. This unit will identify and develop potential ventures through concessions, joint ventures, and other models, while ensuring that port and rail infrastructure remains publicly owned.

Additionally, the government has published a draft statement to allow private rail operators to access the network for the first time, signaling a significant shift in the rail system's operational dynamics.

The full Freight Logistics Roadmap, detailing the government's strategy to modernize and transform South Africa's logistics infrastructure, is available for download here.