Cape Town — Crisis-hit rail network, Transnet, has received a R47b bail-out from National Treasury despite Public Enterprises Minister confirming that they will receive third party access from the private sector.
Transnet was experiencing trouble at the Durban port with many ships stuck out at sea and failing to deliver containers to the port, despite multiple empty bays in busy areas, with DA leader John Steenhuisen urging Ramaphosa to address the crisis.
The National Treasury tabled a support package to Transnet for a bail-out of R47 billion, according to Moneyweb.
The National Treasury’s hand has been forced to make this emergency move with Transnet’s woes worsening in the last month.
“The Minister of Finance has concurred with the Minister of Public Enterprises, Pravin Gordhan, to issue Transnet with a R47 billion guarantee facility effective immediately in support of its recovery plan including meeting its immediate debt obligations. Transnet plays a central role in the South African economy and the government’s goal of inclusive growth,” Treasury said in a statement.
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Gordhan said they wanted to increase the volume of products transported and planned to out an additional 50 million tons on the rail, including manganese, iron ore, ferrochrome, and magnetite in the next couple of years, IOL reported.
In order to provide industrial segments with more access to global trade and commercial networks, Transnet is repositioning its rail network and terminals to improve operational efficiency and capacity expansion,” Gordhan said.
Gordhan said they want to improve the performance of Transnet and they will bring in third party players.
“For the first time, Transnet Freight Rail (TFR) will no longer be the sole provider of freight rail services, as private train operating companies (TOCs) will be able to operate on the freight network. TFR must be vertically separated into its component parts, namely operations and infrastructure, as part of the envisaged policy reforms and the Freight Logistics Roadmap’s recommendations,” Gordhan said.
Gordhan added that the appointment of an interim rail infrastrucutre manager (RIM) on 1 November was proof that the process is well underway, and that the establishment of a RIM is essential to build stronger cooperation between Transnet and the private sector and develop a vibrant rail sector.
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Compiled by Matthew Petersen
