Transport Dept to drive investment in transport sector

[Steve Appleton]

From Business Day, June 9, 2011. http://www.businessday.co.za/articles/C ... ?id=145257

Transport adds investment to job sheet
Department of Transport transforming its role to driving all investment in the transport sector.
LINDA ENSOR
Published: 2011/06/09 06:46:39 AM

CAPE TOWN — The Department of Transport is transforming its role from one of mere policy formulation to also managing and driving all investment in the transport sector, the department said yesterday.

This would cover national and provincial government, along with municipalities and agencies such as Airports Company SA.

An investment panel consisting of the department’s director-general and the CEOs of transport entities has been mooted. Its role would be to consolidate all proposed projects in the sector to avoid duplication, provide a single interface with investors and the Treasury and ensure a consistent approach to how the private sector can participate in transport projects. This structure would also indirectly include Transnet and South African Airways through the Department of Public Enterprises.

A co-ordinated approach — already available through the interdepartmental cluster system — would also cut the time it took for projects to get all the necessary approval, departmental spokesman Thami Ngidi said yesterday.

All the different entities "are pulling in different directions when it comes to investment. We need to pull all these initiatives together," the department’s head of special projects, Lwazi Mboyi told Parliament’s transport committee .

The move towards centralisation and co-ordinated government is a growing trend . It is already apparent in the Department of Public Service and Administration’s national approach to the employment conditions of public servants, in the procurement of goods and services by the state, and oversight over local government. This approach is consistent with the African National Congress’ conception of a developmental state.

As part of a first step in its new role, the Department of Transport is holding an international transport investors’ conference at the Cape Town International Convention Centre on Monday and Tuesday . It aims to attract private-sector commitments for the estimated R500bn of Cabinet-approved projects .

SA’s transport system, both road and rail, is in need of huge investment to clear backlogs and equip it to serve the needs of a growing and modernising economy, but this cannot be achieved by the fiscus alone.

The A-grade "ready to go" projects to be showcased at the conference include five rail, five road, one aviation, two provincial (Eastern Cape and Gauteng) and six Transnet projects. But the menu will also include B-grade projects which still require feasibility or technical studies and the Cabinet’s approval.

The high-speed train links and the creation of a rail and road corridor between Johannesburg and Durban are the high-ticket projects on offer. The 600 participants will include potential domestic and foreign investors, asset managers, merchant banks and service providers. They will be asked to share their views on the various funding models that would allow the private sector to invest in infrastructure upgrade and maintenance.

"The national fiscus is overstretched and is unable to comprehensively fund transport infrastructure projects," Mr Mboyi said.

The conference follows a similar engagement in April by the Passenger Rail Agency of SA with investors. They were presented with the agency’s new rolling stock programme and the business opportunities that arose from it. The agency plans to spend R97bn on new rolling stock over the next 18 years.