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South Africa Freight Transport Report Q1 2010Published by: Business Monitor International Published: Jan. 13, 2010 - 72 Pages Table of Contents
AbstractState-owned logistics group Transnet said in December, that it was seeking to raise rail export capacity for manganese ore from 4mn tonnes in 2009 to 7mn tonnes within five years. CEO, Chris Wells said more capacity would be allocated to manganese exports on the general freight line between Hotazel in the Northern Cape to Port Elizabeth. The company admitted, however, that it was facing delays on the expansion of its coal export line and that most of its other rail freight expansion projects would be adversely impacted by rising costs. Wells said: ‘We are looking at putting in place a capacity of say 7mn tones plus for manganese in the medium term, both through Port Elizabeth and Durban, until we implement a new facility for manganese exports. I would say in the next five years.’ Wells acknowledged criticism of Transnet Freight Rail for not doing enough to improve rail infrastructure, but pointed out that the company’s actual investment levels, were running five times higher than the previous annual amounts. He added that ‘all key projects that have been announced are continuing. Among major projects is an upgrade of rail transport to the country’s major Richards Bay coal export terminal. On coal, we have a big project in place to improve, together with our customers, the efficiency of the process and the intention is to get that line to around 81mn tones capacity in four to five years.’Since our last report, we have very slightly edged up the outlook for the South African economy for 2010. We continue to expect the economy to have contracted by 1.8% in 2009 but we now see recovery with growth of 2.6% in 2010. The predicted average annual GDP growth rate across the 2010-2014 forecast period is now 3.2%, a fraction less than the 3.3% figure achieved in the preceding five-year period. The effect on our freight traffic forecasts across the two five-year periods is therefore marginally negative. Freight transport statistics do not cover all modes in South Africa, but to draw an overall picture, we make BMI freight carried estimates for road haulage, maritime cargo, and pipeline throughput. We expect road haulage to grow virtually on a par with GDP, although poor road quality in some areas will be a restraining factor. Rail freight will lag behind the economy's general growth rate due to an ongoing investment shortfall, and despite current catch-up attempts. Sea freight will be broadly ahead of GDP, supported by port expansion plans. Airfreight has expanded relatively slowly in recent years, although once the current downturn has been worked through, the expansion of low-cost carriers and an increasing focus on the African regional market should inject some extra dynamism in the tail end of the forecast period. Combining all factors, our conclusion is that total freight volume across the different modes, measured in million tonnes-km, will rise by an annual average of 3.1% in the 2010-2014 forecast period, a little ahead of GDP. According to our latest estimates, transport and communications GDP fell by 1.6% in 2009, 0.2 percentage points (pps) less steeply than overall GDP, which we estimate to have contracted by 1.8%. For the 2010-2014 period, we expect the transport and communications sector to expand on a par with the economy as a whole, at an annual average rate of 3.2%. The total value of transport and communications GDP will rise to US$39bn in nominal terms by 2014, representing 8.2% of South Africa's GDP. In the years before the current downturn, South Africa's rate of economic expansion had been spurred by domestic consumption, investment growth, and international demand for commodities. This resulted in strong demand for transport services, as buoyant consumption maintained the need for import growth; while, export shipments of gold, platinum group metals, chrome, manganese, and coal all necessitated increased freight services. Although the 2009 story is one of recession, future GDP growth will also be supported by South Africa's plans to foster regional expansion in southern Africa, and this entails improving and extending the transport network. South Africa exports significant amounts of grain and other foodstuffs to other African countries, particularly using its own rail network to the borders of neighbouring countries, and is involved in the extension of these routes into these states. BMI believes the global slowdown and domestic problems, such as power shortages, are feeding through and have had a negative impact on the transport sector in the short term. However, we should now begin to see a moderate recovery. The overall freight volume transported by road is forecast to increase by an annual 2.7% for the rest of the review period. We assume that adequate dockside facilities and port throughput will not constrain the growth of container trade, with volumes falling on the short term as a result of the recession. BMI expects maritime freight carried to grow by an annual average of 6.9% in 2010-2014. We expect airfreight to achieve growth of 2.9%, while pipeline throughput at 2.5% a year and rail at 2.3% will bring up the rear. Get Full Details About This Report >> |
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