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.