South Africa

Transnet collapse shown in two graphs

Transnet rail maintenance expenditure and South Africa’s plummeting rail freight volume clearly show the collapse of the state-owned enterprise.

Transnet made headlines in recent years for all the wrong reasons – mismanagement, corruption, collapsing infrastructure, strike action, and criminal syndicates stealing cables.

These factors reduced the South African rail, port and pipeline company’s ability to deliver services to the country’s businesses and citizens.

Another reason for Transnet’s poor performance in its railway services is that it spent significantly less on infrastructure maintenance than it used to.

In 2012, Transnet generated revenue of R28 billion and spent R3.44 billion (12.4%) on railway maintenance.

Since 2012, Transnet has significantly reduced this expenditure, spending only R2.7 billion (7.1%) on railway maintenance during the 2022 financial year while generating R38 billion in revenue.

The prolonged maintenance expense cutbacks are a material contributor to the operator’s deteriorating infrastructure.

Transnet is also struggling to come close to operating at full capacity, and some reports have highlighted that it is operating at only 25% capacity at times.

Professor of industrial engineering at Stellenbosch University Jan Havenga said Transnet’s inability to operate at full capacity greatly contributes to its infrastructure problem.

He explained that trains that are standing idle offer opportunities for further vandalism and cable theft.

The product of these factors can clearly be seen when looking at Transnet’s operational results.

Since 2016, Transnet has experienced substantial decreases in the number of goods it transported on its railways.

During the 2022 calendar year, Transnet could only transport 155 million tonnes of goods, compared to 230 million tonnes in 2017.

Because of Transnet’s rail freight problems, road freight was forced to pick up the slack and transport anything from coal to ore.

Total goods transported by road have experienced eye-watering increases since 2016.

In 2016, road freight totalled 617 million tonnes. This increased to 839 tonnes in 2022 due to weak performance from Transnet and a two-week strike in October 2022.

The chart below clearly shows the decline in rail freight and the increase in road freight over the last seven years.


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