Transnet’s planned expenditure of more than R129 billion over five years is being supported by a broader restructuring of how the organisation procures goods and services. The introduction of a centre-led procurement operating model, digital procurement transformation, stronger governance and formal supplier relationship management could materially affect how contracts are planned, consolidated, awarded and managed across Transnet’s operating divisions.
For suppliers and industry stakeholders, the significance extends beyond the scale of the proposed spending. Transnet reports substantial reductions in irregular expenditure, procurement turnaround and cycle times, alongside more than R2 billion in realised value and savings. The effectiveness of these reforms will be tested by whether they produce a visible procurement pipeline, faster contract awards, improved equipment availability and sustained freight rail and port performance.
- Transnet plans to spend more than R129 billion over the next five years.
- The Reinvent for Growth strategy is structured around three pillars: Fix and Optimise, Transform, and Grow.
- Transnet is introducing a centre-led procurement operating model.
- Its procurement reforms also include digital procurement transformation, supply chain management governance, supplier relationship management and inclusive growth.
- Transnet reports a 50% reduction in irregular expenditure.
- Procurement turnaround has reportedly been reduced by 75%.
- Process redesign has reportedly reduced procurement cycle times by 78%.
- Strategic sourcing has generated cost savings of more than 10%.
- Transnet reports more than R2 billion in realised value and savings.
- Transnet Freight Rail volumes are forecast to increase by approximately 4.7% between FY2026/27 and FY2027/28.
- Freight rail volumes are stabilising, while container volumes are improving across key terminals.
- Transnet says private sector partnerships are gaining traction and port equipment interventions are being accelerated.
Transnet will spend more than R129 billion over the next five years to restore the SOE’s sustainability and credibility, Group Chief Executive Michelle Phillips said in her opening keynote presentation at the SAPICS Conference in Cape Town.
More than 500 supply chain professionals from across Africa and around the world have convened for the annual event that is hosted by supply chain industry body SAPICS and enables supply chain professionals to learn, share knowledge and network. Now in its 48th year, the SAPICS Conference is Africa’s leading event for the profession. In her presentation, Phillips told South African supply chain managers impacted by Transnet’s challenges – including severe rail bottlenecks and port inefficiencies – that the organisation’s turnaround plan is working and already delivering tangible results.
The “Reinvent for Growth” (R4G) is taking hold, improving financial and operational discipline, enabling equipment renewal and private sector partnerships that are restoring confidence in Transnet, Phillips said. R4G has been developed to recover volumes, drive institutional reform and realignment through organisation redesign, and improve Transnet’s commercial focus. She outlined the three pillars of the R4G programme: “Fix and Optimise”, “Transform” and “Grow” and noted that these are bearing fruit. Freight rail volumes are stabilising after years of decline. Container volumes are improving across key terminals, reflecting early operational stability. Private sector partnerships are gaining traction. Accelerated port equipment interventions are aimed at improving reliability and lifting overall efficiency.
Reforms and the R4G will support continued volume recovery over the next five years while enabling the market repositioning of Transnet. Transnet Freight Rail volumes are forecast to increase by approximately 4.7% between FY26/27 and FY27/28, Phillips told SAPICS attendees.
She discussed procurement reform and outlined how the SOE is addressing long-standing structural inefficiencies and repositioning procurement as a strategic enabler. To build a modern, strategic procurement function, Transnet is focusing on key procurement reforms, namely: a centre-led procurement operating model, digital procurement transformation, supply chain management governance, supplier relationship management and inclusive growth. Phillips said that measurable outcomes include a 50% reduction in irregular expenditure, a 75% reduction in procurement turnaround, a 78% cycle-time cut via process redesign, more than 10% in cost savings through strategic sourcing, and realised value and savings of more than R2 billion.
Procurement has been transformed from a transactional support function into a strategic value engine that supports business recovery, operational excellence, and sustainable growth, she stated.
Transnet’s recovery is South Africa’s growth, Phillips stressed, and assured SAPICS Conference attendees that the “strategy is working, the recovery is real and the future is sustainable”.
The 2026 SAPICS Conference runs until 22 July 2026. This year’s event celebrates the 60th anniversary of supply chain industry body SAPICS. This milestone is reflected in the Conference theme “Legacy to Leadership: 60 Years of Connection, Collaboration and Transformation”. The conference programme has brought together local and international speakers, industry experts, thought leaders and supply chain practitioners who are sharing practical insights into the opportunities and challenges shaping modern supply chains. “As SAPICS celebrates six decades of advancing the supply chain profession in South Africa and across the continent, this year’s landmark event not only reflects on the past but is helping to shape the future of supply chain excellence,” the organisation says.
