Transport is Key to Competitiveness in Global Markets
South Africa has a modern and well developed transport infrastructure. 111 The transport modes that form the infrastructure are rail, road, marine, air and pipelines. These modes further branch into freight and passenger transport.
Public company Transnet is SA’s main transport operator, Spoornet, Petronet and Portnet. Transnet accounts for nearly 30% of goods transported, with the balance transported by private sector enterprises. The air and rail networks are the largest on the continent. The country’s ports provide a natural stopover for shipping to and from Europe, the Americas, Asia, Australasia and both coasts of Africa.
The transport sector has been highlighted by the government as a key contributor to SA’s competitiveness in global markets. It is regarded as a crucial engine for economic growth and social development, and the government has unveiled plans to spend billions of Rands to improve the sector. Productivity in rail is enhanced by increased capital in production and technical progress. Higher output has resulted from frequent and heavier loads moving longer distances. Pipeline transportation Continuous investment in pipeline infrastructure will give a major boost in productivity.
At the beginning of 2012 Transnet took delivery of its new multiproduct pipeline, which runs between Durban and Jameson Park, near Heidelberg. The pipeline, which will ramp up to full capacity in the coming 18 months, is handling the delivery of diesel fuel to SXs economic heartland of Gauteng. This investment is not only limited to the distance between Durban and Johannesburg, but there are other infrastructure upgrades that need to take place to accommodate the increased capacity of the new pipeline. For example, the Gauteng fuel pipeline has also been upgraded in conjunction with the construction of the trunk fine. This secondary network comprises a 16-inch pipeline linking Gauteng fuel depots between Kendal and Waltloo, Jameson Park and Alrode, and Alrode and Langlaagte. This will happen in Durban also as Terminal 1 at Island View, in Durban, and Terminal 2 at Jameson Park was fully completed.
Air transport Continuous investment in this sector is noticeable as SAA will take delivery of 20 Airbus A320 aircraft valued at R10bn in the middle to the end of the year. While this recapitalisation of the national carrier will have a wider impact on efficiency of its operations, productivity is likely to improve. The relatively slow growth of labour productivity in air transportation was likely affected by diminishing returns from factors that in the past positively influenced air transportation labour productivity, such as the introduction of larger and faster aircraft, computerised passenger reservation systems, and the hub-and-spoke flight network. Passenger train Gautrain has proposed seven new routes for the express train that will expand the current network from work to home. This form of transport ferries 52 000 people a day or 1.2 million people a year – which is a good alternative.
In conclusion using the words of Professor Raymond Parson: “The structure and financing of infrastructure investment needs to be carefully planned with a view to raising absorptive capacity of the economy and enhancing the productivity of investment as a whole whilst not imposing undue strain on the balance of payments and domestic prices.”
By: Bongani Coka – CEO of Productivity SA
This article was originally published on the Productivity SA website