Fin24

Transnet to borrow R100bn for new capex

2012-02-20 12:26

Johannesburg - Logistics group Transnet will borrow R100bn over the next seven years to pay for a R300bn infrastructure programme, its chief executive said on Monday.

The spending plan was heavily promoted in President Jacob Zuma’s state of the nation policy address this month, with government officials saying it will help create jobs and increase the country’s competitiveness.

State-owned Transnet, which moves commodities such as coal, iron ore and fuel, is looking to nearly triple its capital expenditure from its original plan of around R110bn to build and expand infrastructure in Africa’s biggest economy.

Bottlenecks at ports and rail lines run by Transet have slowed exports and economic growth.

“We will only need to borrow around R100bn by issuing bonds, domestic and international, bilateral loans,” Brian Molefe said.

He did not say when the bonds would be issued, with debt problems in Europe making projections difficult.

He did not foresee any problems in attracting interest for the bonds and was confident the company would find the money to pay for the rest of the expenditure from its own balance sheet.

Details of the new capital programme will be announced in the coming weeks, but Molefe indicated that 55% of that would be spent on new projects. The remainder would go for maintenance of existing infrastructure.

Comments
  • jacques.koorts - 2012-02-20 13:39

    Ok, so that we're on the same page: That is 20bn for corruptive deals, and 80bn for a projects where 50% will be delayed/shoddy work/make a loss. Eventually, the loan won't be paid back and the tax payer will foot the bill. That sounds more correct.

      kgatit - 2012-02-20 13:55

      Yep, that's sound about correct. But hope is all we have that this will improve the bottlenecks currently experienced. Remember a few years ago we had the was an issue with the bottlenecks at our harbors with cargo ships having to wait 1 week or so to off-load. The government (notice, I am not saying the ANC) then improved on the infrastructure and now that things are better, I've never seen any media coverage on those improvements... Sometimes as ppl we are quick to see the negative in these kinds of initiatives by the government and slow to give props when the governments delivers on it's promises.

  • Gregory Jurgens - 2012-02-20 14:32

    Big bonuses for transnet executives and tenders for their families .

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