{"id":265355,"date":"2025-11-12T11:24:23","date_gmt":"2025-11-12T12:24:23","guid":{"rendered":"https:\/\/www.premium-partners.net\/?p=265355"},"modified":"2025-11-12T13:03:54","modified_gmt":"2025-11-12T13:03:54","slug":"transnet-has-not-yet-met-its-own-targets-but-there-is-progress","status":"publish","type":"post","link":"https:\/\/www.premium-partners.net\/fr\/builder\/transnet-has-not-yet-met-its-own-targets-but-there-is-progress\/","title":{"rendered":"Transnet has not yet met its own targets, but there is progress"},"content":{"rendered":"

This post<\/a> was originally published on this site<\/a><\/p>

<\/p>\n

Although Transnet has not yet met its own targets, the Medium- Term Budget Policy Statement <\/span>(MTBPS) notes that progress has been made. <\/span>In particular, the Treasury said that Transnet’s freight rail volumes increased in 2024\/25 and <\/span>port volumes have stabilised.<\/span><\/p>\n

\u201cReforms in freight logistics focus on upgrading poorly maintained infrastructure and <\/span>introducing private-sector participation in rail and ports. A rail infrastructure manager was <\/span>established as a separate division of Transnet in April 2025 and has opened slots on the freight <\/span>rail network to 11 private rail companies,\u201d the MTBPS said.<\/span><\/p>\n

Transnet is addressing a financial and operational decline as rail volumes have <\/span>declined from 226.3 million tonnes in 2017\/18 to 151.7 million tonnes in 2023\/24 due to <\/span>derailments, inefficiency and infrastructure damage. In 2023\/24, Transnet reported a net loss <\/span>of R7.3 billion, relative to R5.1bn in 2022\/23, largely due to increased finance costs.<\/span><\/p>\n

Additional debt and higher interest rates pushed finance costs to R14.3bn in 2023\/24, <\/span>placing further strain on cash flows.<\/span><\/p>\n

Transnet needs to stabilise and reduce its debt. Since 2018, Transnet has shifted funds <\/span>from capital expenditure to debt servicing. While this prevented default, the shift has <\/span>come at the expense of maintaining and expanding critical infrastructure. Government <\/span>provided a R47bn guarantee in December 2023, which Transnet used to refinance <\/span>maturing debt and take on new debt.<\/span><\/p>\n

In 2025\/26, government issued R145.8bn  in additional guarantees to Transnet to address <\/span>funding shortfalls, liquidity pressures and debt redemptions over the next five years, bringing <\/span>total guarantees issued to the entity to R196.3bn.<\/span><\/p>\n

The government is now providing direct support to critical infrastructure projects, such as the <\/span>expansion of the land\u2010side container terminal in Cape Town, while avoiding debt relief or <\/span>general balance sheet support and the Treasury said no further bailouts are anticipated.<\/span><\/p>\n

However, it is likely to take several years before Transnet can access capital markets without a <\/span>government guarantee.<\/span><\/p>\n

Statistics South Africa reported that rail transport payload declined by 12.0% in 2022 after a <\/span>6.9% fall in 2021 and a 11.1% drop in 2020, while road transport surged by 25.0% in 2022 after <\/span>growing by 10.4% in 2021. This meant that the percentage transported by rail fell to 15.6% of <\/span>total land transport payload in 2022 from 20.6% in 2021 and 23.5% in 2020. Transnet\u2019s <\/span>strategic plan was to have a 30% share of land transport. In 2024, the rail share of total <\/span>payload rose to 16.9% from 15.7% in 2023 and in the first eight months of 2025 there has  <\/span>been a 3.7% year-on-year (y\/y) improvement to 110.6 million tonnes.<\/span><\/p>\n

Although Transnet can access capital markets, its ability to raise more funding is constrained <\/span>by accumulated debt levels. These in turn have led to unsustainable interest costs and <\/span>refinancing risk, resulting in liquidity pressures.<\/span><\/p>\n

Optimising the entity\u2019s capital structure and returning it to profitability will require Transnet to <\/span>shed non-core assets, reduce its current cost structure and explore alternative funding models <\/span>for infrastructure and maintenance, such as project finance, third-party access, concessions <\/span>and joint ventures.<\/span><\/p>\n

To effect the roadmap, Transnet is working with the National Logistics Crisis Committee, <\/span>composed of government departments, rail and port users, and independent experts. <\/span>Two priority infrastructure projects involving Transnet assets were the Ukuvuselela Gauteng- <\/span>Eastern Cape High-Capacity Rail Corridor, which would upgrade the South Corridor railway line <\/span>and expand port infrastructure for automotive handling, with the construction phase of the <\/span>project yielding an estimated 10 000 short-term jobs, as well as the Cape Town Container <\/span>Terminal Expansion Phase 2B to expand landside capacity at the terminal.<\/span><\/p>\n

BUSINESS REPORT<\/strong><\/p>","protected":false},"excerpt":{"rendered":"

Although Transnet has not yet met its own targets, the Medium- Term Budget Policy Statement\u00a0(MTBPS) notes that progress has been made.\u00a0In particular, the Treasury said that Transnet’s freight rail volumes increased in 2024\/25 and\u00a0port volumes have stabilised.\u201cReforms in freight logistics focus on upgrading poorly maintained infrastructure and\u00a0introducing private-sector participation in rail and ports. A rail infrastructure manager was\u00a0established as a separate division of Transnet in April 2025 and has opened slots on the freight\u00a0rail network to 11 private rail companies,\u201d the MTBPS said.Transnet is addressing a financial and operational decline as rail volumes have\u00a0declined from 226.3 million tonnes in 2017\/18 to 151.7 million tonnes in 2023\/24 due to\u00a0derailments, inefficiency and infrastructure damage. In 2023\/24, Transnet reported a net loss\u00a0of R7.3 billion, relative to R5.1bn in 2022\/23, largely due to increased finance costs.Additional debt and higher interest rates pushed finance costs to R14.3bn in 2023\/24,\u00a0placing further strain on cash flows.Transnet needs to stabilise and reduce its debt. Since 2018, Transnet has shifted funds\u00a0from capital expenditure to debt servicing. While this prevented default, the shift has\u00a0come at the expense of maintaining and expanding critical infrastructure. Government\u00a0provided a R47bn guarantee in December 2023, which Transnet used to refinance\u00a0maturing debt and take on new debt.In 2025\/26, government issued R145.8bn\u00a0 in additional guarantees to Transnet to address\u00a0funding shortfalls, liquidity pressures and debt redemptions over the next five years, bringing\u00a0total guarantees issued to the entity to R196.3bn.The government is now providing direct support to critical infrastructure projects, such as the\u00a0expansion of the land\u2010side container terminal in Cape Town, while avoiding debt relief or\u00a0general balance sheet support and the Treasury said no further bailouts are anticipated.However, it is likely to take several years before Transnet can access capital markets without a\u00a0government guarantee.Statistics South Africa reported that rail transport payload declined by 12.0% in 2022 after a\u00a06.9% fall in 2021 and a 11.1% drop in 2020, while road transport surged by 25.0% in 2022 after\u00a0growing by 10.4% in 2021. This meant that the percentage transported by rail fell to 15.6% of\u00a0total land transport payload in 2022 from 20.6% in 2021 and 23.5% in 2020. Transnet\u2019s\u00a0strategic plan was to have a 30% share of land transport. In 2024, the rail share of total\u00a0payload rose to 16.9% from 15.7% in 2023 and in the first eight months of 2025 there has\u00a0 been a 3.7% year-on-year (y\/y) improvement to 110.6 million tonnes.Although Transnet can access capital markets, its ability to raise more funding is constrained\u00a0by accumulated debt levels. These in turn have led to unsustainable interest costs and\u00a0refinancing risk, resulting in liquidity pressures.Optimising the entity\u2019s capital structure and returning it to profitability will require Transnet to\u00a0shed non-core assets, reduce its current cost structure and explore alternative funding models\u00a0for infrastructure and maintenance, such as project finance, third-party access, concessions\u00a0and joint ventures.To effect the roadmap, Transnet is working with the National Logistics Crisis Committee,\u00a0composed of government departments, rail and port users, and independent experts.\u00a0Two priority infrastructure projects involving Transnet assets were the Ukuvuselela Gauteng-\u00a0Eastern Cape High-Capacity Rail Corridor, which would upgrade the South Corridor railway line\u00a0and expand port infrastructure for automotive handling, with the construction phase of the\u00a0project yielding an estimated 10 000 short-term jobs, as well as the Cape Town Container\u00a0Terminal Expansion Phase 2B to expand landside capacity at the terminal.BUSINESS REPORT<\/p>","protected":false},"author":1,"featured_media":112561,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-265355","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-builder"],"_links":{"self":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts\/265355","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/comments?post=265355"}],"version-history":[{"count":1,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts\/265355\/revisions"}],"predecessor-version":[{"id":265356,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts\/265355\/revisions\/265356"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/media\/112561"}],"wp:attachment":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/media?parent=265355"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/categories?post=265355"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/tags?post=265355"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}