INFRASTRUCTURE: A slow train
Transnet reins in spending due to lack of customers
One of the major disclosures in the budget was that logistics and railway operator Transnet will cut back on capital expenditure due to lower demand.This comes on the back of a modest 5.3% increase in the company’s revenue to R65.5bn for the year ended March, assisted by a small tariff hike in the fuel pipeline business.Overall, government will cut expenditure by R85bn. A large part of this will hit national projects, including those at Transnet."Over the next three years, Transnet will scale back its capital investment plans due to weaker than expected demand," treasury says in the Budget Review.Transnet, which operates the country’s ports, fuel pipelines and goods trains, has over the past few years spent hundreds of billions of rand on expanding its rolling stock capacity.The most high-profile of these tenders was the R54bn acquisition of 1,064 locomotives from Canada, the US and China over the past four years.The transactions have been mired in controversy amid allegations of c...
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