Corporatisation of an important state-owned entity remains incomplete 21 years after it was initially announced

The corporatisation of the Transnet National Ports Authority (TNPA) remains incomplete more than 21 years after it was initially announced.

The separation of TNPA from the rest of Transnet into an independent, wholly owned subsidiary was promulgated in 2005 as a key requirement of the National Ports Act.

The move was touted as a critical step in restoring the competitiveness of South Africa’s ports, which had been used to cross-subsidise the country’s rail network for years.

A clear separation would allow the TNPA to reinvest revenue from the ports back into port infrastructure, replacing ageing equipment and expanding port operations.

Yet despite the supposed urgency with which the Department of Transport has previously discussed the issue, the move has been delayed for more than 2 decades.

The separation was brought to national attention again in 2021 as part of Operation Vulindlela, the South African government’s initiative to drive reform under President Cyril Ramaphosa.

The President designated TNPA’s corporatisation as a top priority for the Operation, with a deadline for its completion set for December 2023.

“This reform will have a direct impact on port users and our export industries,” Ramaphosa said at the time. “They will benefit from increased efficiency, lower costs and new investment in port infrastructure.”

“It will also have an impact on the lives of ordinary South Africans, who will benefit from lower prices of goods and more jobs throughout the export value chain.”

However, five years on from this announcement and nearly three years after the proposed deadline, there is still no clear indication of when the reform’s implementation will be complete.

The plan has instead seen brief mentions in Vulindlela’s quarterly reports, with no information other than indications that it was supposedly still on track.

Reform still underway but no clear date

Despite the more than 20 years of delays, Transport Minister Barbara Creecy said the corporatisation of the TNPA remains a top priority at her department.

While she said work was still being done to implement the reform, she did not provide specific dates or timelines for its completion.

“We have been working for a long time together with the National Treasury and Transnet on their balance sheets,” Creecy said. “We hope this year to be making announcements in that regard.”

“We want to ensure that both entities will be able to operate on a sustainable financial basis, and obviously, both will contribute in a meaningful manner to improving our freight logistics system.”

When asked, Creecy has also avoided discussing the reasons behind the reform’s numerous delays over the past two decades.

A report from Maritime Review indicated the release of two tenders relating to the reform towards the end of April 2026, reaffirming that it was still in the works.

However, the timelines for these two tenders indicate that the separation of TNPA from Transnet is unlikely to occur this year.

The first tender seeks consultation on financial advisory services for the corporatisation of the TNPA, with an allocated timeframe of 12 months.

The second tender seeks to appoint a service provider to review, over a 3-month period, the conditions that a corporate TNPA must meet, as set out by the National Treasury.

“The detailed scope attached to both of these tenders highlights that there are still a good number of unknowns ahead,” Maritime Review said.

“It’s also clear that the completion of the tasks associated with each contract will not magically create a corporatised TNPA.”

Maritime Review’s report estimated that the actual corporatisation of the TNPA will likely not occur before the second half of 2027, at the earliest.