Transnet board chair warns freight rail decline 'presents risks to SA economy'
This while Transnet is indebted to the tune of R130 billion. The entity's Parliament briefing comes a week after Finance Minister Enoch Godongwana warned of its impact on the economy.
CAPE TOWN - Transnet says its underperforming freight rail division is putting the country’s economy at risk.
On Wednesday, the struggling state-owned entity briefed Parliament's public enterprises portfolio committee on its annual results and poor performance.
Transnet’s board also told members of Parliament that it can’t afford to pay off its R130 billion in debt and needs financial assistance.
The Parliament briefing was the first since the resignation of CEO Portia Derby and freight rail division chief executive Siza Mzimela.
Transnet’s Parliament briefing comes a week after Finance Minister Enoch Godongwana warned of the entity’s impact on the economy.
Board chairperson Andile Sangqu reiterated Godongwana’s sentiments, saying there’s an urgent need to turn around Transnet’s operational performance.
“The decline in freight rail presents risks to the South African economy.”
Sangqu says Transnet’s debt obligations continue to be a major burden.
“We think that a debt obligation and a burden of R130 billion is more than what Transnet can handle. Interests of costs of R13 billion per annum is too much for Transnet.”
Public Enterprises Minister Pravin Gordhan said they remained committed to improving the company’s performance - saying there must be some cost cutting exercises.