South Africa: Over U.S.$5,2 Billion Needed For Transnet's Turnaround Plan

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South Africa: Over U.S.$5,2 Billion Needed For Transnet's Turnaround Plan
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Transnet, a pipeline, rail, and port enterprise owned by the South African government, is asking Treasury for more than U.S.$5,2 million (R100 billion) over the course of the next two years, according to Engineering News. The U.S.$5,2 million comprises a proposal that the Treasury assume responsibility for at least U.S.

Harare — Transnet, a pipeline, rail, and port enterprise owned by the South African government, is asking Treasury for more than U.S.$5,2 million over the course of the next two years, according to. The U.S.$5,2 million comprises a proposal that the Treasury assume responsibility for at least U.S.$3 billion of its debt and give U.S.$2 billion in equity in the form of a subordinated loan, that in the event that performance goals are met, can be converted to equity.

Allotments to Transnet were absent from the government's medium-term spending strategy, which was presented in the February 2023 budget. With the Treasury ordering all ministries to reduce their 2024 - 2025 budgets, the fiscal framework is already severely strained. Upon the presentation of the medium-term budget policy statement on November 1, 2023, some modifications to the in-year allocations are also anticipated.

The newly expanded board was requested by Public Enterprises Minister Pravin Gordhan in September 2023, to promptly draft a recovery strategy and assess the performance of the management team. As a result, Ali Motala, the head of the Northern Corridor coal line, and Sizakele Mzimela, the CEO of Transnet Freight Rail , as well as Group CEO Portia Derby,the National Logistics Crisis Committee's Freight Logistics Roadmap, which is mostly consistent with the turnaround plan.

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