Transnet to focus on freight

FINDING FUNDING: Transnet's Chris Wells. © UNknown.
FINDING FUNDING: Transnet's Chris Wells. © UNknown.

Maryanne Maina

Maryanne Maina

Rail, freight and port operating parastatal Transnet plans to sell bonds valued at between R2,5billion and R5billion this financial year to enable it to finance an expansion programme.

Funding would be sourced from foreign investors if favourable terms could be negotiated, Transnet chief financial officer Chris Wells said yesterday.

"If we can get cost-effective financing offshore, then we will do that," he said.

Transnet's assets will be sold off to raise cash for its main businesses.

The company intends to invest about R80billion in railroad tracks, pipelines and ship terminals to capture market share over the next five years.

The planned investments will include a R11,2billion fuel pipeline linking Durban and Johannesburg, a R1,3billion container terminal at the port of Durban and a R4,2billion expansion of Cape Town's port.

Transnet has already sold assets valued at about R10billion, including the Victoria & Alfred Waterfront in Cape Town, to focus on its primary freight and pipeline businesses.

A shortlist of five companies interested in buying Transnet's Blue Train passenger rail unit has been compiled and formal bids are expected to be submitted within a month, said Transnet head of restructuring Karl Socikwa.

"Transnet also intends to relinquish control over its Autopax bus unit to the country's Transport Ministry," he said.

Once the deals are completed, Transnet will only focus on freight.