Browse the complete Report on: South Africa Freight Transport Report Q3 2010
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The South African public sector does not have the funds it needs to invest in the long-term development of the country's freight transport infrastructure. In mid-2010 there were early signs of a new approach to the problem. In June Transnet Freight Rail announced plans to open up all 7,300km of its branch lines, by offering private concessions, which would operate the lines over a fixed long-term period. The move is geared towards attracting investment to the often underinvested in and frequently under-used branch line sector; while also freeing up much-needed funds for the state-controlled logistics company in particular, allowing it to focus efforts on its ambitious five-year capital expenditure (capex) plan. A decline in volumes has made it difficult for Transnet to maintain the necessary level of investment in South Africa's branch line sector, which accounts for 35% of the country's entire 20,953km rail network, of which only 3,928km are currently operational. Given this poor state of repair and with an ZAR80.5bn (US$10.4bn) capex spending programme to execute over the next five years, which Transnet is struggling to fund, BMI is not surprised that the company is seeking to open up this neglected area to private investment, as it concentrates on mainstream freight services. However, while BMI views Transnet's decision to privatise this part of its network as a positive one for the company, it remains unclear how much interest is likely to be generated among private investors. For instance, much of the track in question was built over 100 years ago and subsequently requires a great deal of investment; while other stretches were closed altogether as they were no longer commercially viable.
The operating environment was broadly favourable to the local freight transport sector in mid-2010. The country remained Sub-Saharan Africa's strongest and most stable democracy and its role hosting the World Cup football championship was bringing in economic benefits and raising its profile in the eyes of international investors. BMI has revised our 2010 GDP growth forecast upwards to 3.0% (from 2.6%) previously. On the medium term to 2014 we see annual growth averaging 4.1%. While the recovery is in progress, our analysts nevertheless warn it is a rather tepid affair, because the consumer sector remains under pressure, private investment has been weak, and there are concerns over continuing problems with electric power supply.
Total tonnage handled by South Africa's main ports will recover in 2010 after the 2009 slump. At the Port of Cape Town (POCT) we see volume gaining 3.5%, after a 4.6% slump in 2009. Our medium-term prediction is for only moderate growth, with an annual average of 3.6%, trailing behind the rate of GDP expansion in the country. At the Port of Durban (POD) both the recovery and the medium-term outlook are more muted. We see volume there gaining 2.4% in 2010, after a 9.6% fall in 2009. The medium-term outlook at Durban is for annual volume growth of a very modest 1.9%. Box traffic growth will remain modest at Cape Town, where there are capacity constraints, but will be stronger at Durban. In real terms, we see exports gaining 11.1% in 2010, in contrast to a 19.5% fall in 2009. Imports should grow at a lower 6.0% (after slumping by 17.4% in 2009). Over the next five years we expect overall trade (imports + exports) to grow by an annual average of 7.3%. Exports will lead the way with 8.4% annual average growth, while imports will expand by 6.4% per annum.
The risks to our South Africa freight forecasts are on the downside. Perhaps the most immediate risk is of a post-World Cup resumption of strike action in the ports sector, or by railway workers responsible for freight deliveries to the ports. This could have a potentially serious effect on the flow of the country's exports. A second-line risk concerns the wider political scene: disagreements within the ruling ANC or allegations of corruption in the administration could have a negative impact on investor confidence.
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Original Source : Freight Transport Market
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The South African public sector does not have the funds it needs to invest in the long-term development of the country's freight transport infrastructure. In mid-2010 there were early signs of a new approach to the problem. In June Transnet Freight Rail announced plans to open up all 7,300km of its branch lines, by offering private concessions, which would operate the lines over a fixed long-term period. The move is geared towards attracting investment to the often underinvested in and frequently under-used branch line sector; while also freeing up much-needed funds for the state-controlled logistics company in particular, allowing it to focus efforts on its ambitious five-year capital expenditure (capex) plan. A decline in volumes has made it difficult for Transnet to maintain the necessary level of investment in South Africa's branch line sector, which accounts for 35% of the country's entire 20,953km rail network, of which only 3,928km are currently operational. Given this poor state of repair and with an ZAR80.5bn (US$10.4bn) capex spending programme to execute over the next five years, which Transnet is struggling to fund, BMI is not surprised that the company is seeking to open up this neglected area to private investment, as it concentrates on mainstream freight services. However, while BMI views Transnet's decision to privatise this part of its network as a positive one for the company, it remains unclear how much interest is likely to be generated among private investors. For instance, much of the track in question was built over 100 years ago and subsequently requires a great deal of investment; while other stretches were closed altogether as they were no longer commercially viable.
The operating environment was broadly favourable to the local freight transport sector in mid-2010. The country remained Sub-Saharan Africa's strongest and most stable democracy and its role hosting the World Cup football championship was bringing in economic benefits and raising its profile in the eyes of international investors. BMI has revised our 2010 GDP growth forecast upwards to 3.0% (from 2.6%) previously. On the medium term to 2014 we see annual growth averaging 4.1%. While the recovery is in progress, our analysts nevertheless warn it is a rather tepid affair, because the consumer sector remains under pressure, private investment has been weak, and there are concerns over continuing problems with electric power supply.
Total tonnage handled by South Africa's main ports will recover in 2010 after the 2009 slump. At the Port of Cape Town (POCT) we see volume gaining 3.5%, after a 4.6% slump in 2009. Our medium-term prediction is for only moderate growth, with an annual average of 3.6%, trailing behind the rate of GDP expansion in the country. At the Port of Durban (POD) both the recovery and the medium-term outlook are more muted. We see volume there gaining 2.4% in 2010, after a 9.6% fall in 2009. The medium-term outlook at Durban is for annual volume growth of a very modest 1.9%. Box traffic growth will remain modest at Cape Town, where there are capacity constraints, but will be stronger at Durban. In real terms, we see exports gaining 11.1% in 2010, in contrast to a 19.5% fall in 2009. Imports should grow at a lower 6.0% (after slumping by 17.4% in 2009). Over the next five years we expect overall trade (imports + exports) to grow by an annual average of 7.3%. Exports will lead the way with 8.4% annual average growth, while imports will expand by 6.4% per annum.
The risks to our South Africa freight forecasts are on the downside. Perhaps the most immediate risk is of a post-World Cup resumption of strike action in the ports sector, or by railway workers responsible for freight deliveries to the ports. This could have a potentially serious effect on the flow of the country's exports. A second-line risk concerns the wider political scene: disagreements within the ruling ANC or allegations of corruption in the administration could have a negative impact on investor confidence.
About Us
ReportsandReports comprises an online library of 10,000 reports, in-depth market research studies of over 5000 micro markets, and 25 industry specific websites. Our client list boasts almost all well-known publishers of such reports across the globe. We as a third-party reseller of market research reports employ a number of marketing tools, such as press releases, email-marketing and effective search-engine optimization techniques to drive revenues for our clients. We also provide 24/7 online and offline support service to our customers.
Contact:
Ms. Sunita
7557 Rambler road,
Suite 727, Dallas, TX 75231
Tel: +1-888-989-8004
http://reportsandreports.blogspot.com/
http://reportsandreports.proarticles.co.uk/
http://reportsnreports.wordpress.com/
Original Source : Freight Transport Market
Buy Now : Market Research Report
