Transnet wants R35 billion more from the government

South Africa’s transport minister said the nation’s state-owned ports and rail operator is seeking as much as R35 billion from the National Treasury for projects through 2030.

“We are going to put in requests to National Treasury’s Infrastructure Budget Facility for about R35 billion, for projects going out to 2030,” Barbara Creecy told Bloomberg in an interview in Cape Town on Thursday. 

The request will be in addition to the R13 billion that Transnet has already received from the Budget Facility for Infrastructure.

This included R11.2 billion to repair iron and coal corridors and to improve the efficiency of the Durban container terminal. 

The cash will be used to finance upgrades and equipment orders that Transnet needs to turn around the company after years of underperformance and graft. 

Fixing the company is critical to reviving an economy that has expanded by less than 1% a year on average for more than a decade, with transport constraints repeatedly cited as a brake on faster growth.

Transnet recently concluded rail access agreements with 11 new train operating companies that were allocated slots on its core network.

The inclusion of private operators is expected to add 24 million tonnes of freight capacity to the network, which could be achieved over the next 18 months, she said.

“Transnet will probably have to spend about R35 billion to upgrade railways so that the new network operators have a chance,” said Creecy.

“They will have to obtain rolling stock. So I expect the hoped-for increase of 24 million tons could take place in around 18 months.”

Other measures the state-owned enterprise is taking to improve its performance include plans to introduce a privately operated floating dock at the Port of Cape Town to expand ship-repair capacity and a “port community system”, Creecy said. 

This would involve shipping agents and owners in the operations rooms of the ports, increasing coordination, she said.

“This would really be helpful for the citrus fruit sector, which usually needs to ship out containers during a potentially very windy season,” she said.