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Transnet's service delivery hurdles having a negative impact on the economy remain worrisome while the entity loses billions in profit as companies find other ways to transport goods.
The Sunday Times reported its service delivery problems see congested ports and blocked roads as more mining companies rely on trucks to export and import commodities and other goods and this was suffocating the economy.
The state-owned logistics company's problems has seen it lose R5.7bn in the financial year that ended in March.
Rudi Dicks, joint head of President Cyril Ramaphosa’s much-vaunted turnaround plan, Operation Vulindlela, said government was working on short-term interventions to resolve the issues.
“We are working on a number of short-term interventions, and in the longer term some structural changes. We are co-ordinating work with Transnet. There are maintenance and equipment issues to be fixed,” he said.
Transport analyst and Heavy Vehicle Transport Technology Africa director Dr Paul Nordengen previously said it could take about 10 years for Transnet Freight Rail to effectively fix service delivery challenges and smoothly export most mining products again as trucks take over the business.
Nordengen said it would not be an easy fix to get mining commodities such as magnesium, coal and iron ore fully back on trains despite being a cheaper alternative.
“Transnet Freight Rail has a critical role to play. About 85% of freight is on road at the moment. To go from 85% to 75% — in other words increasing rail freight — is not something you can do in a year or two. It will take a decade, if Transnet does well over the next 10 years and gets delivery service going on the main corridors, especially the mining side,” Nordengen said.
During his medium-term budget policy statement finance minister Enoch Godongwana blamed Transnet for the loss of 5% of GDP in 2022.
He said: “No modern economy can thrive and grow new industries if rail lines are beset by delays, and ports are unable to efficiently handle incoming and outgoing cargo. Transnet’s performance in this regard has been underwhelming and its operations have been strained by a worsening financial state.”
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