Transnet Engineering (TE), responsible for the maintenance of the utilities rolling stock and key equipment in the ports, has made headway on getting more locomotives onto the tracks and has identified three key areas of potential collaboration with the private sector.
This was according to Bessie Mabunda, the acting-CEO of TE since May last year, and who was interviewed on Wednesday at the Investing in African Mining Indaba that is being held in Cape Town. Mining companies continue to struggle with Transnet’s declining rail freight capabilities, which, despite recent efforts by industry, government and Transnet, has had the effect of curbing the revenues and export volumes of many mining groups.
Mabunda said in May, when she started at TE, freight rail capacity was constrained by the 394 new generations locomotives standing idle for many reasons, including derailment, collisions and principally, a shortage of spare parts following a withdrawal from an OEM agreement with the locomotive manufacturer in China,
Since then, TE has managed to return 86 of those locomotives back into service after finding some support services from an alternative supplier in Germany, and the process was ongoing to bring more locomotives back into service, she said.
She said that TE traditionally obtained 90% of its revenue from providing its services to Transnet Freight Rail, but it has also since May started doing maintenance on key port equipment such as cranes and skips. The company had also begun to provide some railway locomotive and wagon maintenance services to mining companies.
TE’s revenues had already grown from about R114 million a year ago to more than R500m, and this growth was ongoing, she said.
However, she said there were three key areas that were essentially non-core to TE’s operations that could provide opportunities for greater private sector collaboration.
The first was in the repair, refitting and operation of Transnet’s legacy fleet of rolling stock, which was about 40-50 years old.
The second was in the operation of TE’s foundry services. Mabunda said they need the foundry services to do iron and steel castings for various components, but operating a foundry was not TE’s core competency and a private sector foundry operator might see this as a commercial opportunity.
The third possible area of collaboration was in the locally designed and built Trans-Africa Locomotive, smaller, short-haul locomotives, three of which were built in TE’s Koedoespoort facility and which were currently being used on the ore rail services in South Africa.
Mabunda said there was an opportunity to manufacture and sell more of these, to private sector and other operators on the continent and possibly even further afield.
She said TE was growing strongly and had already made substantial progress on improving its services, and she anticipated that this would continue, despite ongoing challenges such as the theft and vandalism of rolling stock.
She said this was problem not only of one company, but a problem of society, and the collaboration of a host of stakeholders would be required to deal with this scourge.
BUSINESS REPORT