Transnet plans R80bn project

State-owned freight transport and logistics group Transnet plans to spend R80,3billion in the next five years to fund growth, of which R37billion will be borrowed mainly in the capital markets.

State-owned freight transport and logistics group Transnet plans to spend R80,3billion in the next five years to fund growth, of which R37billion will be borrowed mainly in the capital markets.

Maria Ramos, the group's chief executive, said yesterday the bulk of the budget would be spent in the first three years.

For the 2008-09 financial year Transnet plans to spend R19,9billion, of which R13billion will be raised in the financial markets and will be part of the larger R37billion borrowing requirement over five years.

"The bulk of the R13billion will be raised in the domestic capital markets," said Ramos.

She said the company was reviewing other funding proposals that included the issuance of bonds in foreign markets.

Transnet's freight rail will get the lion's share of the funding, amounting to R38billion, followed by the National Ports Authority at R9,6billion and pipelines at R11,9billion. The remaining amount will be split between rail engineering, port terminals and supporting services.

During the 2007-08 financial year, Transnet spent a record R16billion on mainly its ports and rail businesses. Major projects that contributed to the group's spending included the coal line expansion, ore line expansion, fleet renewal, Durban harbour widening and deepening and the New Multi-Products Pipeline.

Ramos warned that Transnet might face challenges along its growth path.

She said undersupply in electricity from Eskom might negatively affect Transnet's operations by reducing the volumes and quality of service. - I-Net Bridge

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