Road Freight Association welcomes Transnet lifeline by Treasury of R47bn
The Road Freight Association says whilst it welcomes the lifeline treasury has given to Transnet, this doesn't address the historical management and operational problems plaguing the ailing State Owned Entity.
Transnet, the largest part of the freight logistics chain, has been unable to service its debt from earnings, nor has it been unable to increase revenue due to its infrastructure woes.
On Friday, Treasury announced it's issued an R47 billion guarantee to Transnet towards its recovery plan and for it to deal with its immediate debt obligations.
This comes amid heavy backlogs at the country's ports, leaving thousands of containers stuck ahead of the festive season, which is usually busy with imports and exports.
Transnet has since managed to clear the backlog at the Cape Town Container Terminal. However, the Durban and Richards Bay harbours are still struggling with severe backlogs.
The FRA chief executive officer Gavin Kelly says the cash injection doesn't guarantee a successful turnaround at Transnet.
"We know that Transnet has received allocations and presumably more bailouts before, and the question will remain whether the management, operational foresight and control that was lacking for so many years will suddenly appear.
"It certainly hasn't done so before and are we going to see what we saw with SAA where countless bailout occurred and there was no sight of the desired results."
Kelly says his association is aware that there are infrastructure and equipment intervention interventions that require capital, but they are concerned by the potential impact of the historical debt on these key aspects.
"Why is there so much historical debt? How is that going to affect the attitudinal and management change that is required within Transnet, and those core support SOEs, that are hampering the logistics supply chain?"
Meanwhile, Treasury says Finance Minister Enoch Godongwana is positive that the necessary reforms needed to put Transnet back on track can be achieved if the entity commits to meeting the strict conditionalities attached to the guarantee and quickly implementing the reforms informed by the National Logistics Crisis Committee.
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