LETTER | Transnet chair is buttering us up for another bailout

South Africans are desperate for good news, especially from our failing state-owned enterprises (SOEs). Who can blame them?

In recent years taxpayers have forked out R283bn in SOE bailouts, never mind debt guarantees. Our return on the taxpayer investment has been horrendous.

It’s not surprising if many are inclined to believe the yarn Transnet chair Andile Sangqu spun on these pages last week. Sangqu told readers Transnet is on the right track, congestion at ports has improved and publication of the Rail Network Statement is a large achievement and significant step in giving access to third-party rail operators.

While there are improvements, this is very much only part of the story, the most convenient part. In the same week, Sangqu gave an interview to another publication where he said it's unlikely third-party rail operators will make it onto the tracks in the next three years — tracks Transnet does not have enough money to fix, never mind upgrade as it drowns in debt interest payments.

Why the sweet talk from Sangqu? Why leave out all the inconvenient facts? One can’t help but wonder if Sangqu is punting the “good story” narrative out there because he is trying to butter up the public for another bailout. In September last year, Transnet had used R27bn of the R47bn debt guarantee it was granted little over a year ago. Sangqu told the  publication last week he is hoping for a R20bn bailout in the next year, another R20bn the year after and R10bn after that.

Unfortunately parts of the ANC are eager to support the addiction. Recently ANC transformation committee chair Zuko Godlimpi called for “something massive”, arguing Eskom would not be working had it not been for the staggering R245bn support package the Treasury gave the company. We must understand this is a false correlation: load-shedding has stopped not because of bailouts but because of private-sector involvement, and Eskom’s financial position remains dire.

Bailouts do not work, and at a time when we’re spending R20 of every R100 in tax revenue on debt service costs, we cannot afford them.

The next injection of money into Transnet must come from the private sector. There are options available, all explained in the freight logistics roadmap the cabinet approved more than a year ago. One is for private-sector investment to come in the form of concessioning not only ports but rail lines themselves, leaving the private company responsible for repairing and upgrading the vital infrastructure. All this needs to happen this year, not in half a decade from now.

What South Africans are perhaps more tired of than the story of broken SOEs is a campaign to string us along with promises of a dawn just over the horizon if only we give SOEs one more bailout.

— Mark Burke, DA spokesperson on finance

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