By Lehlohonolo Lehana.
State-owned logistics company Transnet has recorded a R1.6bn loss for the six months to end-September citing lower port and rail volumes.
The company recorded a profit of R159m during the same period in 2022.
Rail utility, a key player in the country’s railway, ports, and pipeline networks, has weathered a series of challenges that have significantly impacted its overall performance.
The company blamed collisions and community unrest on its coal railway lines, as well as equipment challenges, for lower volumes of ore and coal delivered.
Derailments, cable theft and power outages also affected all lines, Transnet said.
“The first half of the financial year was clouded by uncertain economic conditions, perpetual operational challenges, load-shedding and subdued business performance,” the logistics firm said.
The government, in its capacity as the owner and overseer of Transnet, may find it necessary to intervene to address the underlying problems and aid the company in its return to profitability.
In addressing these issues, the government will need to balance the need for immediate action with the recognition of the complex, systemic challenges facing Transnet and other public enterprises.
Transnet is currently executing a recovery plan backed by a R47 billion government support package to help meet immediate debt obligations.
The program is in its third month and is expected to be fully executed in 18 months. It’s aimed at improving operations and recovering volumes by enhancing the availability and reliability of critical equipment.