Transnet has dismissed reports that it is considering cutting down on its massive over R300bn capital expenditure as part of its Market Demand Strategy (MDS) - but a Reuters news agency report published today (Thursday) suggests otherwise.
Reuters cited two “well-placed” sources at the company as saying that Transnet was considering an up to R200 billion cut over the next three years as global demand for iron ore and coal stalls and prices continued to fall.
According to Reuters, one source commented that Transnet had held meetings last week during which it had decided to cut projects that were not guaranteed to generate revenue.
However Transnet spokesman, Mboniso Sigonyela, was quoted by online publication, Africa Trade News, as saying that the firm's capital expenditure plans were unchanged.
"We expect to continue with our programme in line with market demand. Our current seven-year rolling plan is R336.6 billion," he reportedly said.
Business Report also cited Sigonyela as saying the company said it would conduct a review of its freight demand only in February, noting that this would “be in line with customer requirements and it would adjust its forecasts accordingly”.
He reportedly added that utility was well within its budget projections and had so far spent close to R100bn since the launch of its MDS four years ago.
The R336bn plan includes orders for 1 064 new diesel and electric locomotives. In June this year, the company signed a R30bn loan agreement with China Development Bank to fund the programme to renew its ageing locomotives.
