Transnet CE unpacks market demand strategy

Addressing the Gordon Institute of Business of Business Science forum in Johannesburg on Thursday (19 April 2012) evening, Molefe said the capital expenditure programme - which underpins the strategy - would result in additional capacity across all the commodities it carries.

Export coal will increase 44% from the current 68 million to 98 million tons, export iron ore will rise 57% to 83 million tons from 53 million tons and general freight business will increase 113% to 170 million tons from 80 million tons. Maritime containers will also significantly increase over the seven-year period.

Molefe said 58% of the R300 billion capex would be used for expansion purposes, rather than for maintenance. The parastatal used over 60% of its R118 billion capex in the past seven years on maintenance.

"We have not laid a new rail line in South Africa for the past 30 years. So this is going to be possible for the first time after a very long time."

These investments are projected to lift Transnet's revenue to R120 billion, from the current R46 billion.

"In seven years' time, we hope to achieve what we have set out to achieve. This will be a different company, growing three-fold from what it is currently," he said.

Transnet's strategy also aims to reduce the cost of doing business by promoting a shift of freight from road to rail. Molefe said Transnet would increase its market share to 35% over the review period from the current 15%.

The strategy is expected to create 588,000 job opportunities at its peak with a large focus on skills and capacity building, while improving Africa intraregional trade.