6 years ago

South African Business 2017 edition

  • Text
  • Development
  • Network
  • Johannesburg
  • Durban
  • Town
  • Opportunities
  • Investment
  • Business
  • Investing
  • Government
  • Business
  • Economy
  • Africa
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South African Business is a unique guide to business and investment in South Africa. In addition to an up-to-date economic overview of the country, analyses of the main industrial sectors, plus profiles of the nine provincial economies, the 2017 edition of South African Business includes special features on key topical issues such as skills development and education, renewable energy and the REIPPPP programme, and trade with Africa.

OVERVIEW Transport

OVERVIEW Transport South Africa's port and rail infrastructure is being upgraded. South Africa has a sophisticated and well regulated transport network, with a mix of state-owned enterprises (SOEs), large private firms and small enterprises providing a range of services. The South African Department of Transport has several agencies and businesses reporting to it: Air Traffic and Navigation Services, Airports Company South Africa (ACSA), National Transport Information System, Road Accident Fund, South African Civil Aviation Authority, South African Maritime Safety Authority (SAMSA), South African National Roads Agency Limited (SANRAL) and the Passenger Rail Agency of South Africa (PRASA). Almost 90% of freight is transported by road and the logistics sector is very reliable. However, these volumes are not good for the condition of the country's roads and SOE Transnet is working hard to attract more business to the rail network. Transnet Freight Rail (TFR) has, for example, put 28 new electric locomotives on the line, supporting steel producer ArcelorMittal in order to improve service. Transnet is also undertaking a very ambitious upgrade of its infrastructure and equipment, which should put it in a better position to pitch for freight business. More than a SECTOR INSIGHT Almost 90% of South Africa's freight is transported by road. thousand new locomotives have been ordered from four different manufacturers. South Africa has 21 000km of railway lines, 747 000km of roads and 566 airports and airstrips (Made in SA). South Africa has 325 019 heavy-load vehicles and the road freight industry employs 65 000 drivers. Significant investments in improved infrastructure are being made at all of South Africa's SOUTH AFRICAN BUSINESS 2017 80

OVERVIEW ports, partly with a view to improving turn-around times for loading and off-loading containers. Special Economic Zones (including Industrial Development Zones (IDZs) are either in place or being developed at several sites alongside harbours from Saldanha on the West Coast to Richards Bay in northern KwaZulu-Natal. Many South African cities are trying to improve public transport and local bus body manufacturers have delivered 740 buses to the City of Cape Town (Busmark 2000 and Volvo SA), 134 new buses to add to Johannesburg's Rea Vaya system (Mercedes-Benz SA) and 80 commuter buses for Great North Transport of Limpopo (MAN). The Maputo Development Corridor is Africa’s most advanced spatial development initiative. Run by the Maputo Development Corridor Logistics Initiative (MCLI), the corridor runs from near Pretoria in Gauteng to Maputo in Mozambique. The Harrismith Logistics Hub (HLH) on the N3 is an inland port that can handle cargo containers and shift cargo from road to rail, reducing congestion and costs. Rail There are private rail operators in the mining industry (Sheltam and Railroad Logistics Grindrod operate in the gold-producing areas of the Free State and Gauteng) and in the tourism sector (Rovos Rail is a popular luxury rail touring company) but the sector is dominated by the Transnet Group, which is responsible for the railway lines and has most of the country's rolling stock. It has a number of divisions such as Transnet Engineering and Transnet Freight Rail. Transnet is pursuing a Market Demand Strategy (MDS), which aims to create customers outside the group. So instead of Transnet Wagons selling only to Transnet Freight Rail, it wants to create new markets for its wagons elsewhere in Africa and beyond. It intends spending more than R300-billion over five years to realise the MDS. The major rail haulage lines are the manganese line from the Northern Cape to Port Elizabeth; from Sishen in the Northern Cape to the Port of Saldanha (iron ore); and from the coalfields of Mpumalanga to Richards Bay. More than 55-million tons are regularly transported along the former and upwards of 70-million tons can travel annually along the latter. A new line to carry coal from the inland to the coast through Swaziland is being investigated. This has the potential to add 30-million tons to the amount of coal transported to the coast. Grain tonnages carried by Transnet Freight Rail (TFR) will almost double in the years leading up to 2019. The assets of TFR’s new Container and Automotive Business (CAB) unit have been ringfenced. The CAB has been created because of the importance of the Johannesburg-Durban line. Transnet Freight Rail intends to increase the amount of freight it carries from 200-million tons to 300-million tons. The Passenger Rail Agency of South Africa (PRASA) oversees a passenger rail network of 22 300km. The agency is spending R51-billion on upgrading its trains, which provide passenger services through Metrorail. The agency employs 16 500 people and its assets (including bus companies such as TransLux and City to City, along with a property division) are valued at R36-billion. A new factory is under construction in Ekurhuleni that is budgeted to cost R1-billion: the Gibela Rail Transport Consortium is one of the companies contracted to supply PRASA with new trains. Air Airports Company South Africa (ACSA) owns and operates the country’s 10 biggest airports. The company also manages airports in India and Brazil. The company will spend R50-billion on expansion and R20-billion on maintenance up to 2023. Ekurhuleni wants to leverage the location of South Africa's biggest airport, O.R. Tambo International, into a major economic asset. An airport city, or Aerotropolis, is planned, whereby a variety of economic sectors are encouraged to set up business in the vicinity of the airport and, in this way, going beyond the passenger traffic and freight traffic, which an airport naturally attracts. 81 SOUTH AFRICAN BUSINESS 2017

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