Leonard Neill
TRANSNET IS to spend R4,5 billion a year for five years on building and upgrading infrastructure held by Spoornet, Portnet and SA Airways, managing director-designate Mafika Mkwanazi announced last week.
This represents a 'pay back' for the important role these three parastatals have played in helping Transnet turn its loss of the previous year to a R1,78 billion profit, he said.
Mkwanazi, in announcing the utility's results for
the six months ending September 2000, said government would now receive its first dividend from Transnet in eight years.
He said Transnet had underinvested in infrastructure for a number of years, leading to deteriorating facilities and the lessening of safety regulations. The lack of investment was due in part to previous losses and high gearing levels, while previous uncertainty about government's restructuring plans had also been a setback.
The target now is to grow Transnet's operating profit 14% over the next five years, he said, making it clear he was determined that there would be a consistent profit shown during that period. The growth of South Africa's economy and global economics in general will play a major role in this undertaking.
Spoornet and SAA had turned their 1999/2000 interim losses of R266 million and R99 million respectively into profits of R207 million and R289 million. Portnet saw net profit rise during the same period from R633 million to R996 million.
The overall draft restructuring policy has now been submitted to the public enterprises department. Mkwanazi said the go-ahead was expected by end March next year, but warned that removal of
certain operations from Transnet's control might hinder profit growth.
The way Transnet is restructured will affect the profit. If, for example, Spoornet's coal and iron ore lines as well as the port authority in the hands of Portnet are taken out of Transnet, we may not be able to achieve our profit projections.
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