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nearly 200 locomotives , secret meetings between former CEO Brian Molefe and the Guptas , and the illicit movement of cashfilled suitcases to fulfill corrupt tenders .
Paul Holden of Shadow World Investigations exposed irregular tenders engineered by the Guptas and their collaborators within Transnet , initially valued at R41.2-billion but now closer to R60-billion due to the passage of time .
Despite some improvements , Transnet faces critical challenges . Better security of infrastructure , new management , and a clear roadmap for competition have been achieved , but they fall short of solving the underlying problem .
The organisation is now at a point of potential failure . Restructuring Transnet , determining the right investment modality for rail , and addressing the debt crisis are urgent priorities . The stakes are high : hundreds of billions of rands in potential investment and thousands of jobs hang in the balance .
The interim rail regulator will seek feedback from potential private sector entrants to the rail network . Their insights will shed light on what is wrong with Transnet ’ s proposed ‘ Network Statement ’ and the associated access fee .
ADDRESSING THE DEBT CHALLENGE
Havenga concurs with the trade unions that the government must shoulder the burden of the state capture debt , which stands at approximately R60-
Transnet ’ s debt burden necessitates strategic decisions .
Chandlervid85 | Freepik . com
Despite some improvements , Transnet faces critical challenges .
billion . Allowing this debt to persist would continue to erode the government ’ s balance sheet , a situation that could take decades to rectify , even in the most optimistic scenarios .
Furthermore , Havenga contends that the rail network requires an annual subsidy of R20-billion to compete with road transport , which is also subsidised . To address these challenges , two critical components come into play . First , the remaining debt ( approximately R700-billion ) must undergo restructuring , facilitated by development bank financing . This financing would offer low-interest rates and extended repayment terms spanning 30 years or more .
Bearfotos | Freepik . com
With these measures in place , Transnet stands a chance of regaining solvency and opening its infrastructure to competitors under favorable conditions . However , the R47-billion loan guarantee from the National Treasury , granted to Transnet in December 2023 , falls short of resolving the long-term issues . These issues include an estimated R200-billion backlog in infrastructure spending necessary to elevate the railway network to global standards .
One proposed reform , outlined in the recently published Network Statement , advocates for separating rail network ownership from infrastructure management – a concept aligned with the White Paper on National Rail Policy . This approach mirrors the operational model of the South African National Roads Agency ( Sanral ), where the state owns public roads , the private sector handles maintenance and toll collection on key routes , and drivers provide their own vehicles . CLA
REFERENCES
1 . Transnet Recovery Plan
2 . https :// shadowworldinvestigations . org / projects-and-publications / the-state-captureproject /
3 . Bloomberg : https :// www . bnnbloomberg . ca / transnet-needs-more-than-a-plan-to-fixsouth-africa-s-logistics-1.2002809
4 . Moneyweb
Operational improvements are becoming evident , with reduced vessel backlogs at ports and increased tonnages shipped by rail . However , Transnet faces significant challenges as it looks ahead .
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