Transnet to retreat to focus on Sadc

SA’s rail and port utility Transnet is narrowing its focus to the Southern African Development Community (Sadc), pulling back from West Africa.

SA’s rail and port utility Transnet is narrowing its focus to the Southern African Development Community (Sadc), pulling back from its foray into West Africa.

In comments made at the SA Transport Conference and International Road Federation webinar on Wednesday, new Transnet CEO Portia Derby said attempts to establish partnerships or businesses in Nigeria and Ghana were too far away.

“We will be retracting because it’s just too far for us. Our strategy going forward is going to be deeply concentrating and specialising in Sadc,” Derby told 260 delegates exploring the effect of Covid-19 on African transport logistics.

Transnet was in an exploratory phase in Nigeria and had bid for a contract in Ghana, which if it won, would see it remain in the country, she said.

Sadc, comprising 15 countries, many landlocked, was “crucial” for SA’s economic growth, she said.

China’s aggressive plans to establish trade routes with Europe by creating corridors to its east, through Russia and Central Asia into the enormous market as well as links to East Africa and Australia, would largely leave SA isolated at the tip of the continent, she noted.

SA would need to do more than just provide ports for its exports but establish itself as a major trans-shipment zone for materials coming into and out of Sadc. Transnet was working on a plan to achieve this and how best to unlock Sadc’s potential, with the results of these studies due in a year, Derby said.

The Covid-19 pandemic was forecast to reduce global trade by nearly 12% in 2020 and the global economy was expected to contract by almost 5%.

Derby did not mention the consequences of a slowing SA economy on Transnet Freight Rail — the utility’s biggest revenue earner that shifts bulk commodities such as iron ore, coal and manganese or the eight ports Transnet operates.

Transnet Freight Rail accounted for 51% of the group’s R75bn revenue in 2019.

There was mention of the consequences of Covid infections at Cape Town harbour and how shipping lines had avoided calling at the port because of unusually long delays, but that had been resolved.

In East Africa, and using Kenya and Uganda as examples, the consequences of Covid-19 and efforts to prevent its spread had proved damaging to regional trade in terms of delays and costs, said Abhishek Sharma, the senior transport director at Trade Mark East Africa.

The Kenyan port is a major conduit for trade in East Africa, moving 27-million tonnes of cargo and 1-million containers a year. Between September 2019 and the end of May, imports fell by almost 5% while trans-shipments — goods going to Kenya’s neighbours, most notably landlocked Uganda — dropped by nearly a fifth, Sharma said.

Truck movements between the two countries dropped by half and waiting times ballooned by two-thirds in April compared to the same month a year earlier.

However, the two governments had agreed a system for drivers to be tested in Mombasa and then carefully tracked as they drove to Uganda, stopping only at designated sites during the trip and speeding up their movement across the border because they had done all the medical testing right at the start of the trip, Sharma said, proposing it as a model for other countries.

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OUR STRATEGY GOING FORWARD IS GOING TO BE DEEPLY CONCENTRATING AND SPECIALISING IN SADC