EDITORIAL: Transnet railroading into disaster

Why would the private sector want to put big money into a state-owned company such as rail utility Transnet?

There can be only two reasons: to make a financial return on investment for shareholders, even if this takes years; or because a company is so desperate to get trains running that it regards its contribution as an unrecoverable cost of doing business.

Listed shipping giant Grindrod might be in the first category, miner Kumba Iron Ore in the second.

Transnet is inviting private operators to be partners. They will be offered “rail slots” and run trains “independently”. It all sounds wonderful.

But what can it mean? Will the infrastructure — railway tracks, signalling, bridges — be owned by one partner, the actual trains by another? How will this be more efficient than having a single operator for everything? Will the different “slots” be interoperable? How can trains be run independently if they have to use existing Transnet infrastructure and rolling stock, which they will? Who will put in the billions needed to repair the failed network?

When the UK privatised British Rail in the 1990s, trains and infrastructure were separated and it was largely a disaster. Fragmentation did not increase competition. Instead, it undermined efficiency, compromised safety, pushed up costs and diluted accountability.

We seem hell-bent on emulating the British experience, widely regarded as a case study on how not to do it.