Acting Chief Executive Chris Wells said the cost for the expansion would be "significant" and the company does not have money to pay for it alone.
Coal exporters have criticised Transnet for failing to transport all of their coal to the specialised port at Richards Bay, whose expansion to 91 million tons is due to be complete by the end of this month.
"If we come to an agreement on what it's going to cost, what that translates into as a tariff to utilise the service, then there is a chance that the move to 91 million tonnes would be a medium term move, on a five to six year framework," Wells told Reuters on the sidelines of a media briefing.
He said that while Transnet would operate the railway line, there were various options for the industry to participate.
"It might be ownership of rolling stock, it might be setting up an SPV (special purpose vehicle)... we will look at what works at that time," he said.
Wells said the company was in talks with the mining industry, but added that even the initial expansion to 81 million tonnes, which the company said would happen by 2015, was contingent on the mining firms signing 10-year contracts.
He expects contracts to be signed within the next 6 months.
In an earlier presentation, Wells said Transnet expects the government to endorse a framework for private sector participation in its project pipeline by the end of 2010.
CAPEX
Wells said the group plans to raise capital expenditure for the next five years to 93 billion rand ($12.69 billion) from 80 billion to boost rail and pipeline infrastructure. More than half of that will go to improve its rail line, he added.
The increase in capital spending is linked to a change in project scope and owing to a rise in costs, especially for steel.
Wells said the company estimates it would transport by rail a total of 62 million tons of coal in the financial year to the end of this month, just slightly up from 61.9 million the previous year.
For the next financial year, Transnet expects to carry more than 65 million tons of coal.
Wells said the company had no plans yet to build a rail line to the Waterberg coal field, expected to become South Africa's next main coal hub, but said that this may change.
The group will need to borrow as much as 41.1 billion rand over the next five years by tapping into both domestic and international markets.
Transnet expects to generate 73 billion rand from operations over the next five-year period, Wells said.
Transnet estimated it would transport 44.6 million tons of iron ore this financial year, up from 36.8 million last year, and raise that figure by 10 percent in the upcoming 12-month period.
The expansion of the line's capacity to 60 million tons from 47 million was on track to be completed in 2012, he said. (Reuters)
