JOHANNESBURG – The Democratic Alliance (DA) has hit out at National Treasury after announcing a R47 billion support package for Transnet, as it faces a raft of financial and operational challenges.
The crisis at Transnet recently worsened following a backlog at some of the country’s major ports that threatened to cripple the economy.
The rail, port, and pipeline company was given a lifeline on Friday when Treasury conceded to a request by the Department of Public Enterprises.
Of the R47 billion granted, Transnet can only drawdown almost 50% for now to deal with liquidity matters, including settling part of its debt. And the SOE can only drawdown on the balance of that amount if it adheres to strict conditions.
The DA’s Dion George doesn’t believe the guarantee facility will help solve Transnet’s operational crisis.
“Transnet is hopelessly indebted, and is unable to pay back its debt, and it is also unable to do the job that it is required to do. We need a fundamental change to the state-owned enterprise’s model, and we need to ensure that the private sector capital is invested into Transnet and other broken state enterprises. In this way, we will then ensure that the entities become more efficient.”
Source : EWN
