Transnet seeks urgent bailout to fix R500 billion disaster

South Africa’s embattled state-owned freight-rail and ports company identified areas that require immediate state support in a turnaround plan that is being submitted to the government.

Transnet’s board plans to meet the Ministry of Public Enterprises and the Ministry of Finance this week to discuss the plan, it said in an emailed statement on 14 October.

Once approved by Public Enterprises Minister Pravin Gordhan’s department, it will be discussed with labour unions, employees, customers and lenders, the company said.

Last week, a plan was submitted to the presidency setting out ways to reverse the collapse of Transnet, which has cost Africa’s most industrialised economy R505 billion ($26.7 billion) since 2010.

Volumes of iron ore and coal shipped through the company’s freight rail network for export have dropped because of issues including vandalism, idle locomotives and cable theft.

The government has begun talks with the World Bank for a $1 billion loan to upgrade Transnet’s rail infrastructure and support state power utility Eskom’s transmission unit, Johannesburg-based newspaper Business Day reported.

Transnet’s turnaround plan sets out operational and financial initiatives that must be implemented over the next six, 12 and 18 months to stabilise the business, according to the statement.

It’s prioritized the filling of three executive positions following the resignations of its chief executive officer and head of its freight-rail division earlier this month. Former Chairman Popo Molefe also quit the board last week.