Transnet begs for assistance, tells MPs its R130bn debt too much to handle
Transnet was briefing Parliament’s public enterprises on its annual results.
CAPE TOWN - Struggling state entity Transnet is begging for assistance because it can’t afford its escalating debt of R130 billion.
The board of the government-owned logistics giant said the debt on the interest alone was too much for Transnet to service, as the company reported a loss of R5.7 billion.
Transnet also said that the failure of its freight rail division would have a negative impact on the country’s economy.
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Transnet was briefing Parliament’s public enterprises on its annual results.
Transnet said that it lost revenue of over R6.5 billion because of the recent floods in KwaZulu-Natal, as well as labour unrest and crime.
The loss in revenue means the company can’t fulfill some of its obligations, like its debt-service costs.
Board chairperson Andile Sangqu: "We think that a debt obligation and a burden of R130 billion is more than what Transnet can handle. Interest costs of R13 billion per annum is too much for Transnet."
He said that Transnet needed help urgently.
"We must just look at it dispassionately and make that call that it is too much for Transnet to handle. We have to get some form of assistance."
Sangqu said the country’s economy was also at risk because of the decline of Transnet freight rail, which contributes 43% of the group’s revenue.
