Finance Minister Enoch Godongwana said National Treasury was mulling over the idea of injecting Transnet with enough cash to fully solve the issues at the embattled state entity.
“We need logistics to work because it’s quite critical for the economy,” Godongwana said.
Godongwana was speaking to media representatives at a pre-World Economic Forum briefing in Johannesburg on Thursday.
The minister acknowledged Transnet’s R130 billion debt burden and said that they would examine what was really needed to fix the rail company and this in turn would determine if a cash injection would be implemented.
RAIL AND PORT CRISIS
In mid December, Government said it was making progress in fixing the rail and port crisis in the country after work that had been done in the last few months.
Cabinet has approved the Freight Logistics Roadmap as the economy has suffered massive losses due to the crisis in the rail network and ports, amounting to R1 billion a day.
A consultancy firm has estimated that the economy lost around R353 billion in 2023 because of problems at Transnet.
R47 BILLION GUARANTEE
It should be noted that in early December Transnet acquiesced to a government guarantee of R47 billion.
This essentially was a lifeline for Transnet in order to address the faults facing South Africa’s port and rail infrastructure.
The financial support package provided for Transnet is a multi-billion rand guarantee facility against which Transnet will drawdown an initial amount of R22.8 billion to deal with immediate liquidity matters such as settling maturity debt.
INTERNATIONAL HELP WITH PORTS
According to The Maritime Executive, Transnet is also seeking international help in order to address the major backlog and logistical issues at its various port terminals.
Transnet has issued a number of tenders in order to bring in outside expertise as it fights of major delays at its ports in Durban and Richards Bay.
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