Though applauded for prudent “financial engineering” and the selling of assets, Transnet has been criticised for lack of operational efficiency, notably in the rail sector. Acting chief executive Chris Wells concedes:

“In rail we have a way to go; we were constrained by the age of the rolling stock and a history of a lack of maintenance.”

But Transnet has invested R6 billion a year on maintenance and is showing marked improvement in availability and reliability of rolling stock, which translates into better service for the customer. New locomotives and continued maintenance have been two enablers, Wells says, but efficiency still needs to improve. He is quoted saying:

“We had areas of low productivity and inefficiency largely because of a lack of investment in required equipment and infrastructure, and a lack of planning – and interaction with customers, to identify their needs and issues”.

While Transnet is self-funding, Wells points out: “To continue as a business we do not need government support but we need clarity on how new infrastructure will be paid for”. While Transnet raised R11.6 billion during the year and spent R19.4 billion, 56% of which was on expanding capacity and the rest on maintaining infrastructure and assets (without any governmental funding assistance) it has to find R80.5 billion for the infrastructure development programme.

While freight traffic volumes held up until October 2008, “the drop since then has been sharp”. Releasing financial results for the year to 31 March, Wells said volumes fell about 12.4% in the year till then. The economic slowdown has been pronounced in general freight business and containers, where volumes decreased 19% and 12%.

Related posts:

1. TRANSNET RESULTS
2. TRANSNET STILL COMMITTED TO SPEND
3. TRANSNET IN THE YEAR AHEAD
4. TRANSNET RESULTS: TRE
5. TRANSNET CONFIDENT ABOUT ITS CAPEX PLAN
6. TRANSNET RESULTS: TFR
7. TRANSNET INTERIM RESULTS
8. TRANSNET INTERIM RESULTS: OPERATING DIVISIONS

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