How SA businesses could lose billions in trade due to disruptions at Transnet

South Africa's major mining companies such as Exxaro, Kumba Iron Ore, and Thungela Resources are facing significant profit losses due to poor infrastructure, equipment breakdowns, outdated trains, and delays at the National Rail Company, Transnet. The inefficiencies at Transnet have not only impacted the profits of big mining companies but have also severely affected smaller to medium enterprises in the country. Missella Nhlapo, CEO of the African Rail Industry Association, shed light on the challenges faced by industry players in a recent interview on CNBC Africa. According to Nhlapo, many small businesses, especially black women-owned enterprises that were supported by the government, have disappeared due to the lack of procurement from Transnet and Prasa. While there is ample capacity and skill available in the private sector, the failure of major players like Transnet to engage with local companies has hindered the growth and sustainability of these businesses. Despite the legal framework allowing for third-party access to Transnet's infrastructure, bottlenecks within the system have prevented many South African companies from partnering with the rail company. Nhlapo emphasized the urgent need for Transnet to establish access agreements with private operators to alleviate the current crisis in the industry. He also called on the government to prioritize the implementation of third-party access as outlined in the Reconstruction and Recovery Plan tabled by the President a year ago. Nhlapo highlighted the potential benefits of third-party access, citing examples from other African countries like Tanzania and Zambia, where similar agreements have led to increased revenue and improved efficiency in the rail sector. He urged the government and Transnet to expedite the implementation of access agreements to not only boost Transnet's financial position but also preserve valuable skills within the industry. Nhlapo emphasized the role of the private sector in creating sustainable jobs and contributing to the country's economic growth, underscoring the importance of resolving the current challenges at Transnet to prevent further losses.