The Finance and Public Enterprises Ministers have agreed to issue Transnet with a R47 billion guarantee facility effective immediately to support its recovery plan and meet its immediate debt obligations.
This as the embattled ports and freight rail entity faces significant operational, financial and governance challenges including congestion at three of the country’s major ports.
South African ports have been battling congestion and delays due to equipment and port infrastructure failures resulting in billions worth of goods currently unable to berth into ports.
National Treasury says Transnet will drawdown an initial amount of R22.8 billion from the R47 billion guarantee facility to deal with immediate liquidity matters such as settling maturity debt.
Government says a Guarantee Framework Agreement between National Treasury, Public Enterprises, and Transnet will include strict guarantee conditions that will be continuously be reviewed and amended if/when necessary.
It says any further drawdowns will be subject to Transnet meeting its conditions.
Government says is confident that the implementation of the Transnet Recovery Plan will be sufficient to resolve the entity’s challenges going forward.
Spotlight on Transnet operations’ impact on the economy: