"We will keep the infrastructure and rolling stock in the company," Freight Rail CEO Siyabonga Gama told the Johannesburg Press Club.

Gama said although the policy regarding the future of the rail monopoly would ultimately be made by the government, its sole shareholder, Transnet Freight Rail, would not recommend vertical separation of the company.

He said rail operators in Britain and Sweden, whom Spoornet at the time was emulating, were also rethinking their strategies about the separation of infrastructure and operations functions.

In terms of the original plan, Freight Rail was going to focus solely on operating trains while an independent, preferably private, entity was going to be responsible for the maintenance and building of rail infrastructure.

The idea of vertical separation of operations and infrastructure in Europe came at the height of privatisation in the late 1980s. It was influenced by the belief at the time that the private sector was far more efficient and competent than the public sector.

The other objective was to encourage new entrants to participate in the freight and commuter rail markets.

But concerns about allowing the profit-focused private sector to run a rail infrastructure were raised after a train accident in Britain in 2000.

The accident was allegedly caused by lack of maintenance on the rail track and the rolling stock. There have subsequently been calls for the renationalisation of British railways by labour unions.

It was not clear if these developments, coupled with SA's labour unions' opposition to privatisation, had contributed to Gama's change of heart.

However, he gave hints the plan could have been cancelled as far back as 2005. He said at the time that: "Concessions are not a panacea. Just because assets and services are state-owned does not mean that they are inefficient. The private sector often only focuses on maximum profit and short-term gains."

Gama said yesterday his management team was confident Freight Rail would be turned around by 2012. The company would invest R35bn in the next five years to renew its fleet.