Rabia Mayet | rabiamayet@radioislam.co.za

28 October 2025

2-minute read

In order to revitalise state-owned entities under the Rail Revitalisation Plan, government has launched a series of requests for information to the private sector participation.

At a press briefing in Pretoria on Sunday, it was made clear that while the state would retain ownership of all rail and port infrastructure, space would be open for private investment to improve efficiency and expand rail services.

According to SAFTU’s Newton Masuku, this move by government is a “backhanded method to introduce privatisation” and is consistent with the core ideas of Operation Vulindlela, a PPP or private-public partnership, coming from the World Bank. The PPP has been tried and has failed in other countries due to the main problem of the public carrying the risk of the investment while the private sector reaps the profit.

Newton mentioned that the role of state-owned entities is to enable “universal access,” a mandate wherein the public has a right to electricity, water, roads and public transport at a reasonable cost. SAFTU’s contention is that public transport must remain in state hands so that they can aid in the “developmental trajectory of the country.”

By privatisation, the state will be at the mercy of private proprietorship as in the case of the steel industry where South Africa is now at the mercy of international exporters and vacillating prices. “We do not believe that the private sector should be involved in this,” Newton emphasized.

State entities were built with the “blood, sweat and tears of the working class,” and this move that is solely for profits will underride them. Furthermore, the cost of private investment is carried by the National Treasury and by extension, the public, meaning that if it fails, the state, and not the private sector, will have to pay back the investment. The profits and rewards are not commensurate with the risk.

Citing the example of ESKOM and the certainty of the costs of ever-increasing tariffs, Newton mentioned that apart from corruption and mismanagement, independent power producers want to be guaranteed profits, which are then subsidised by the public.

“The government has the capacity to spend in excess of the revenue it collects,” Newton stated, and should not be viewed as a “household.”  Options to revitalise the railway system include revamping the infrastructure thereby creating jobs reflecting in the form of taxation. When you shrink expenditure in the economy, effectively, you are killing demand, leading to poor economic growth.

Listen to the full interview with Ml Ahmad Waja, Ml Ibrahim Daya and Newton Masuku here.