Speaking at the Cape Chamber of Commerce's exporter of the year awards last week, Socikwa said the transport logistics company had to press ahead. "We cannot be discouraged by the set of circumstances we are operating in."
The Transnet capital expansion programme was announced by President Jacob Zuma during the state of the nation address in February. It would include huge investments into the Durban-Johannesburg transport corridor and manganese export facilities through the port of Ngqura in Port Elizabeth.
Transnet's chief executive Brian Molefe said in June the group planned to float a 500-million foreign currency bond to help with this capital expansion.
Socikwa referred to South Africa's economic problems including slow gross domestic product growth rate of less than 2.7% for this year and a spate of labour unrest. Further, the economic crisis in Europe and the slowing growth of China were other factors that had a bearing on South Africa.
These factors threatened Transnet's expansion, but abandoning it now was not an option. "We have to press on, but be smarter, focused and more innovative," Socikwa said.
"We must continue to invest through the sandstorm (as) the delivery of a modern supply chain platform is vital for sustained growth to better get through the crisis."
Socikwa said Transnet needed to reassure investors that it would be able to operate the new and upgraded facilities sustainably. This was key as the company went about raising money for the programme through bond sales.
Temi Ofong, Absa Capital's head of corporate banking, said the co-ordinated economic stimulus measures by the European Central Bank, the Bank of England, the People's Bank of China, the Bank of Japan and US Federal Reserve, should improve the global outlook. These would help to contain the extent of the global economic slowdown and debt crises in Europe.
Further, the stimulus measures boded well, particularly for economies that were linked with commodity exports.
Ofong said the recent weakness of the rand would help to improve South Africa's competitive advantage. "We would regard the rand as being under-valued by as much as 9% on a real effective exchange rate basis."
Cape Chamber of Commerce deputy president Gordon Meter said business welcomed the commitment to the expansion plan.
"The money spent on infrastructure has to plan (for) the future when exports rise," he said.
"Most of the work should at least have started, if not completed."
Transnet had to expedite plans to make the Cape an attractive destination for the refurbishment of oil and gas offshore rigs.
"Last year we had 168 rigs pass the Cape but few stopped for refurbishment (due to) the limited capacity of the ports," Meter said.
Source: Business Day
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