South Africa’s government said it will give Transnet additional guarantees so the troubled State ports and freight railway operator can settle all its debt that falls due and execute its capital-investment program.
Transport Minister Barbara Creecy announced the approval of a R51-billion guarantee facility for Transner last month and the process of giving it additional support will be finalized by July 25, according to the Department of Transport. The company’s five-year corporate plan shows it needs to repay 99.6 billion rand.
“The government will monitor the performance of Transnet to ensure it provides adequate support to it as it implements the reforms required by the government,” the department said in a statement on Thursday.
The new facility will provide another lifeline to a company that was given a R47-billion guarantee in 2023 and had accumulated almost R138-billion of debt by the end of March the following year.
Transnet has been working to turn its operations around after years of mismanagement, during which it lost billions of rand to graft. Its container ports rank among the least efficient globally, according to the World Bank and S&P Global Market Intelligence.
Moody’s Ratings on May 16 warned that the company would run out of cash for operations and debt-servicing within three months if the government didn’t step in.
Source : ENGINEERING NEWS
