Spoornet is to consider a move to a vertical separation model between infrastructure and operations, chief executive Siyabonga Gama told the African Rail conference in Johannesburg on Tuesday.
Gama said private sector participation in rail services in the form of concessions was a useful tool to fund and manage operations.
However, he noted: “It is important that certain areas remain government-owned,” such as communication infrastructure and control of the rail network.
Possible private sector engagement in transport infrastructure could come through service contracts and concessions where the right to use assets was transferred to external entities for an agreed contract period, he added.
Gama said Spoornet would consider concessions that intervened in the operation and maintenance of services.
Drivers of concessions included the transformation of monolithic units to more agile entities and were based on the notion that the private sector is more efficient than the public sector.
Gama warned, “Concessions are not a panacea and just because assets and services are state-owned does not mean that they are bad or inefficient.”
He stressed that state organisations have “social value add, whereas the private sector often only focuses on maximum profit and short-term gains.”
Concessions to the public sector are seen as an alternative funding model to maintain rail infrastructure where limited public funds are a problem.
Concessions have been successfully implemented in developing countries such as Argentina, he stated.
However, attempts to introduce similar measures in Mozambique were less successful and “have failed to provide a sufficient return on equity,” Gama said.
Gama did not provide any time frame or specific agenda to allow a concession of certain services to the private sector. ‒I-Net Bridge