Revised capex plan will fast-track infrastructure upgrades

The Department of Public Enterprises is set to double – or even treble – the capital expenditure of Transnet in an effort to speed up infrastructure investment. While Public Enterprises Minister Malusi Gigaba would not commit to a figure, he said the increase in capital infrastructure would be “significant” and be announced no later than February next year. “We are working on a revised capital expenditure programme. We have asked Transnet to expand its capital expenditure plans. The president should be able to make interesting announcements in his state of the nation address in February next year,” said Gigaba at the annual Southern African Rail Conference in Johannesburg last week. He said it was clear that on the current budget stateowned freight and logistics company Transnet was not able to address infrastructure backlogs as the money was being spent mostly on maintenance. “We need to fast-track the programme significantly if we want to really address infrastructure issues,” he said. According to Gigaba the Industrial Development Corporation (IDC), the biggest development finance institution in the country, has been tasked to work more closely with government to meet growth targets. “Transnet, Eskom and the IDC are working together to find new ways of borrowing more money over shorter periods of time. Both Minister of Economic Development, Ebrahim Patel, and I are impatient that we should find a model that can be used across the spectrum of state-owned enterprises.” But, said Gigaba, it was just as important for the private sector to come on board. “The private sector needs to invest much more in the real economy of the country than what they are doing at present,” he said. “It is no use if all of us are clambering to invest in infrastructure, when the real economy is not growing as it should.” According to Transnet Freight Rail CEO Siyabonga Gama, they were in the process of formulating a new fleet plan that would significantly increase TFR’s rolling stock capacity while taking into account future growth. The accelerated spend on infrastructure is aimed at creating increased capacity on TFR’s general cargo, coal and iron-ore lines, said Gama. Both Gigaba and Gama said they were hesitant to talk about how Transnet was to double or treble its capital budget only saying they were talking to various finance people including the Development Bank of Southern Africa.