Transport Dept to work closely with Transnet to improve its operations, financial stability
This follows a recent credit downgrade by Standard & Poor's, which cited high debt levels, negative cash flow, and Transnet's growing reliance on government support.
In response, the department has committed to a total of R94.8 billion in additional financial support to help manage the impact of the downgrade on Transnet's existing debt.
'Government has approved an additional R48.6 billion guarantee for Transnet to ensure that all debt redemptions will be covered over the next five years and that the entity also maintains sufficient liquidity levels,' said department spokesperson Collen Msibi.
'Government has also considered the impact of the credit downgrades on Transnet's existing debt and has therefore also approved R46.2 billion for it to mitigate the risk of such ratings.'
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Daily Maverick
a day ago
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The R145bn Transnet back brace to fix the spine of the South African economy
A visit to the Port of Cape Town reveals the complex reality behind Transnet's recovery efforts, and why the state's massive financial intervention might just be the lifeline the South African economy needs. 'You can't take a picture of that (the liquid bulk terminal) because many of our laws were written under apartheid,' harbour master Captain Alex Miya explains as the tugboat cruises past. 'In those years, Umkhonto weSizwe would use those images to plan sabotage attacks on these kinds of things.' The irony hangs heavy in the salty air. Here we are, three decades into democracy, still governed by security regulations crafted to protect infrastructure from liberation movements that now form the government. 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The Union of South Africa in 1910 necessitated economic consolidation, and the disparate railway systems were amalgamated into the South African Railways and Harbours (SAR&H), controlling 11,000km of track and all major harbours. The decision to operate these assets as a state-owned enterprise, rather than private businesses, was driven by fears that a single private owner could wield excessive power over the nascent economy. This created a foundational contradiction that would define the organisation for more than a century: expected to operate on 'business principles' while serving a broad, often unprofitable, developmental mandate. High-value industrial freight subsidised below-cost transport of agricultural products – a cross-subsidisation model that opened the interior for development, but created mounting financial pressures. Dark history Under apartheid, like most of the state infrastructure, it became an instrument of racial engineering. 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Marine operations delays dropped from 1.2% to 0.2%. These aren't marginal improvements; they're operational transformations reminiscent of the efficiency gains that first made these railways economically viable in the 1800s. The planned Culemborg Logistics Park represents transformational thinking rooted in historical precedent. This R2.5-billion, 30-hectare development aims to create 2,500 construction jobs and 25,000 indirect jobs by 2030, bringing logistics services closer to the port. It echoes the original railway strategy of reducing transport costs and travel times to unlock economic development. Infrastructure improvements at Container Terminal Phase 2B will expand capacity from one million to 1.4 million TEUs, with strengthened quayside infrastructure and improved rail connections. A dedicated truck staging area will remove 220 trucks from public roads – addressing congestion that has plagued the port since the original colonial designs proved inadequate for modern volumes. 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Without this investment, the system would deteriorate further, potentially triggering the kind of economic disruption the Union founders feared from private monopoly control. A new lease on life New equipment purchases tell the recovery story: a R240-million ship-to-shore crane for Port Elizabeth, 20 straddle carriers, and nine rubber-tyred gantries for Durban represent R3-billion in operational improvements. At Cape Town, shore tension units from Rotterdam have reduced the time the boats stay in the berth from 2,881 hours to 690 hours – technical solutions with a massive economic impact. The early signs from Cape Town are encouraging: operational improvements that translate directly into economic efficiency, private sector partnerships that leverage state investment and infrastructure developments that create jobs while enhancing capacity. The fog of frequent omissions is lifting over Cape Town harbour, revealing not just the port's operations, but perhaps a clearer vision of how this historical institution might finally evolve beyond its colonial and apartheid origins. DM
eNCA
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Presidency reports much progress made
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The Citizen
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