Deputy Minister Obed Bapela says Transnet is turning the corner

Deputy Minister Obed Bapela says Transnet is turning the corner

Deputy Minister of Public Enterprises Obed Bapela believes Transnet will turn the corner with plans afoot to revive the railway network and fix the ports.

He said the R47 billion that was given to Transnet by Finance Minister Enoch Godongwana will help the freight logistics company with its recovery plan.

Bapela said they wanted to resolve the crisis in the logistics sector as it impacts on the economy.

The poor performance of Transnet was said to be costing the economy billions a year.

There were plans to fix the railway network and upgrade the ports because they were using an old equipment.

“We need to ensure that the logistics sector is resolved soonest. We are also looking at other options other than to depend on the fiscus. But the money that was allocated by the Minister of Finance in the Budget towards Transnet will help a lot in now beginning to push maintenance, repairs and replacement because a lot of vandalism and theft have taken place,” said Bapela who was answering questions in Parliament.

“We will ensure the ports are operating maximally. We have looked at Mozambique and Namibia, they have roped in the private sector. Grindrod, our own company is operating in Maputo, All the trucks are now diverting from our ports to go there. It’s something not good for an economy of our size,” he said.

“We will ensure we optimise those ports and we bring in new equipment because one of the things that killed Transnet is old equipment. The management of Transnet is going to be focusing (on that) with the money that is starting to flow in from April 1. We will be rolling in that money to ensure that our ports operate optimally. We will definitely have to have concessions, to allow for concessions as they did in Mozambique and as they are doing in Namibia,” Bapela said.

“But the infrastructure will remain 100% state owned and the concessions will come in for 25 years or 30 years and leave the infrastructure after the return on investment to allow for the modernisation of our infrastructure so that the logistics (sector) can perform and not affect the economy as it did.”

Transnet has seen a drop in its performance in the last few years. Last year the freight logistics company posted a loss of R5.7bn.

This was down from a profit of R5bn the previous year.

President Cyril Ramaphosa set up the National Logistics Crisis Committee to resolve some of the challenges in the sector.

He said recently they were beginning to see the results of the committee.

He said there was an improvement in the performance of Transnet. Ramaphosa said most of the backlog in the ports has been cleared.

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