Transnet says it’s ready to implement Phase 2 of its Recovery Plan and has initiated a balance sheet optimisation project to improve its finances. Transnet Board chairperson Andile Sangqu updated the media regarding the recovery plan in Johannesburg on Friday.
Government gave Transnet a guarantee of R47 billion to allow it to meet its debt obligations and free up resources to improve operations. Sangqu says the utility now has a stable leadership to help it implement its key objections.
South Africa’s rail, port and pipeline company Transnet, has been in dire straits, which has cost the economy billions of rands in lost revenue.
The Freight Rail business unit has been under siege due to ageing infrastructure, rampant looting, and a leadership crisis.
Transnet launched its recovery plan in October last year, saying it is executing it to improve operational and financial performance.
Transnet is currently sitting on a debt of more than R130 billion. Sangqu says during the current financial year, Transnet will be working with the government to determine the optimal solution to improve its financial profile. This will be to mitigate risks and improve its financial ratios.
“There are legacy issues that need redress, and these are the high levels of debt and the maintenance backlog which we have reported on in the past and these require restructuring and optimisation of the balance sheet to better support the recovery plan,” Sangqu explains.
The board chairperson says Transnet will defend its procurement process after a legal challenge to the selection of International Container Terminal Services as the preferred bidder to manage the upgrade and development of Pier 2 at the Durban Container Terminal. It has emphasised its commitment to openness and transparency.
