EDITORIAL: Transnet guarantee a mixed blessing
Private partners must be brought in urgently to take over the lines and ports
So Transnet finally has another guarantee. It’s a mixed blessing for Transnet itself, albeit an urgent and essential one. The National Treasury couldn’t have been too pleased about transport minister Barbara Creecy’s insistence on a guarantee either. But it kicks the can of Transnet’s distressed finances down the road for the moment. And if it can be used as a lever to force Transnet to speed up turning around its operations and to put the pressure on the state-owned company and its parent department, transport, to pick up the pace on private participation, it might turn out better than expected.
The Treasury has refused to provide balance sheet support to Transnet, in line with its “tough love” approach, and the R47bn guarantee it approved in December 2023 came with stringent conditions, not all of which Transnet has yet met. It’s been reluctant to provide further guarantees, encouraging Transnet instead to apply for finance for specific infrastructure projects...
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