Transnet halts plan to allow private companies to operate key rail line

South Africa’s state-owned ports and rail company withdrew a request for quotes for an operating lease on a freight-rail artery that connects its biggest port with its industrial hub, because changes in the nation’s transport policy have affected the scope of the project. 

Transnet SOC Ltd. first issued the call for private-sector partners on the so-called Container Corridor linking Durban with Johannesburg on Jan. 27, it said in a statement Thursday. 

Reforms contained in the National Rail Policy and Economic Regulation of Transport Bill — which include separating rail operations from infrastructure — mean that Transnet needs to review the process for bringing in private companies, it said. 

“Transnet is fully committed to increasing private-sector partnerships on key rail corridors, but believes it is necessary to complete the process of bringing the freight-rail ecosystem in line with national policy before taking any further steps to do so,” it said. 

Transnet, which operates the nation’s ports, fuel pipelines and freight rail system, has amassed 130 billion rand ($7 billion) of debt after years of mismanagement, underinvestment and corruption that have impacted its services and weighed on the economy.

Coal shipments on South Africa’s freight-rail network have plunged to 30-year lows and iron-ore railings are at their lowest in a decade, prompting companies including Glencore Plc to consider cutting jobs. Port snarl-ups are resulting in delays to the loading and offloading of ships and some fashion retailers have resorted to flying in apparel.

The Durban to Johannesburg line is used primarily to transport containers.