Transnet commits R45bn to infrastructure upgrades

Leonard Neill TRANSNET IS to address its infrastructure backlog by spending more than R45 billion on new and existing services during the next 10 years, says Public Enterprises Minister Jeff Radebe. He announced what amounts to one of the biggest investment drives by a parastatal in recent years at the release of Transnet's annual results in Johannesburg last week. "The move will help fuel economic growth, create jobs and make inroads into the big infrastructure in South Africa's ports, railways, roads and airline sector,he said. "It will also help reduce inefficiencies and delays in our ports and rail network. "The time has now come to address the infrastructure backlog which is estimated by some to be in the region of R16 billion accumulated over the last 20 years.Ó Transnet's chief financial officer Sindi Mabaso disclosed that R9,1 billion had been budgeted for the current financial year, R11,4billion in 2004 and R4,8billion in 2005. The remaining R19,7 billion has still to be finalised in terms of time of deployment. More than half the figure will go to South African Airways to enable it to fund its fleet renewal programme, which involves 41 new Airbus aircraft coming into the country during the next decade. Spoornet will receive around 22%, mainly aimed at its locomotive and infrastructure upgrade programme. The National Ports Authority is to get 16%, with the bulk going towards building the new harbour at Coega in the Eastern Cape. The balance will be used in funding other Transnet wings. Mabaso said Transnet would source much of the current year's funding needs from the capital markets. Borrowings were essential, said Transnet chief executive Mafika Mkwanazi, but apart from this the group also planned to use other strategies to fund the programme. These include project finances, operating leases, joint ventures, equity partners and public private partnerships.