Minister confronts Transnet over policy than could derail reforms

Transport Minister Barbara Creecy gave the Transnet board three days to explain how it would correct a rail access agreement she said broke with legislation, reversed an agreed policy position and threatened to drive investors away from the government’s freight-rail reform programme. Her ultimatum followed the Transnet Rail Infrastructure Manager’s (Trim) submission of a revised Rail Access Agreement on June 1. Two days later, Creecy wrote to Transnet board chairperson Andile Sangqu, demanding the board’s response, “together with proposed corrective actions and implementation timelines”, within three days. President Cyril Ramaphosa’s administration has placed logistics reform at the heart of its economic recovery strategy, with rail and Transnet restructuring as central pillars. Under the reforms, Transnet has separated infrastructure management from operations to open the rail network to private operators and restore efficiency in freight transport. Trim has published a Network Statement and Rail Access Agreements (RAA) that govern the entry of private players into the rail network. However, Creecy is unhappy with the revised RAA. In the letter, she called on the board to instruct Trim to incorporate changes demanded by the Department of Transport and offered to meet directors personally to resolve the dispute. Creecy’s anger was triggered by what she described as Transnet’s reversal of arrangements agreed with the department in an agreement submitted on April 30. “The RAA departs materially from the position previously agreed between the Department of Transport and Trim,” she wrote. “The revised RAA introduces amendments that alter fundamental provisions that have already been agreed upon.” She singled out the definition of “access seeker”, saying it no longer aligned with the Economic Regulation of Transport Act. The Act defines an access seeker as “an individual or an organisation or an agent of an individual” seeking to use an infrastructure owner’s infrastructure, resource or facility. It does not say the person must be a licensed train operator, own locomotives and wagons or be ready to run trains. But a new draft network statement released for public comment after Creecy’s intervention shows that the dispute over who qualifies to enter the rail market was not resolved. The July 2026 document accepts that an access seeker does not have to be a train operating company (TOC). In that case, an applicant may nominate one to provide the transport services. Yet elsewhere, the document requires the access seeker to obtain a rail safety permit and licence to operate. It describes an access seeker as a person capable of conducting train operations. The conflicting rules create a confusing situation. The Draft Network Statement Version 4 has now been released for consultation. The department will hold an industry feedback session on Tuesday, July 21, while written comments must be submitted by Friday, July 24. The Rail Access Agreement, however, places operator-type obligations on the access seeker. It makes the access seeker the signatory, holder of the train paths and Transnet’s counterparty for commercial, financial, capacity-related and operational obligations. Before the agreement becomes operative, the access seeker must provide insurance, pass credit checks, furnish a financial guarantee, obtain a permit from the railway safety regulator and acquire the locomotives and wagons required to begin operations. It appears Creecy believed Transnet was using its contract to turn a broad class of potential rail entrants into a narrower group of equipped operators. She said the change created “uncertainty regarding eligibility for access” and undermined “the objectives of a transparent, fair and non-discriminatory access regime”. “More importantly, it raises significant concerns regarding the bankability of the rail reform programme,” she wrote. “Investors and prospective access seekers require legal certainty and predictable access arrangements to support investment decisions.” She warned that inconsistency could “compromise investment confidence”, discourage potential entrants and frustrate the movement of freight from road to rail. The subsequent network statement appears, in part, to recognise Creecy’s objections. It states: “An Access Seeker, who is not a TOC … must identify and nominate a TOC to provide transportation services at the time of application.” An applicant can show they have the technical ability by being a TOC themselves, choosing a confirmed operator, providing a letter of intent from a proposed operator or describing a joint venture, special-purpose vehicle. Transnet and the transport department said in a joint statement yesterday that “a key consideration under the current version 4 of the Network Statement was to ensure we define those seeking access to the rail network under a broader definition that is in line with the Economic Regulation of Transport Act no. 6 of 2024,” adding that this was “important to ensure we promote competition and transparency.”