Transnet declares turnaround

Cape Town - Transnet, the state-owned rail, ports and pipeline utility, gave a glowing report of its achievements to parliament on Wednesday, with the acting chief executive, Chris Wells, telling MPs that the company has effected a successful turnaround over the past five years.

Wells, who has made it clear that he is not making himself available to fill the seat previously occupied by Maria Ramos, told the public enterprises committee that there has been a continuous increase in revenue from R25.3bn in 2004/05 to R33.6bn this year. The outturn of this budgeted figure is in the process of being finalised.

Earnings before interest, taxes, depreciation and amortisation have shown a 75% improvement in the first four years of that period, and even though the recession has hit the carriage of containers and general freight the current year is budgeted to be 13% above 2004/05.

Wells told the committee that a number of areas still need focused attention however. He said that the rail network carried only 13% to 14% of the containers transported in this country. "We think it could be double that," he said, adding: "Containers on rail are 30% cheaper than on the road."

He said the company was badly afflicted by cable theft - as were the other utilities Eskom and Telkom. He said that Transnet is using expert security services, but admitted: "It is an area that needs additional focus."

Inkatha Freedom Party MP Mario Ambrosini pressed for an answer as to why Transnet - now that it no longer needs government help - should not be privatised.

Enoch Godongwana, the deputy minister, replied that the ANC has decided that it must stay in state hands. "There is no reason why the state should not own profitable enterprises," he said.

The financial results of the company for the year ending 31 March 2009 will be presented next Wednesday, June 24.

- I-Net Bridge