Transnet to purse investments despite weak economy



In a review of his organisation’s performance in the six months ending September 2014, Transnet CEO Brian Molefe, stated that the rail and port operator will still push ahead with its investment strategy in spite of the global economic slowdown.

Net profit for the period fell 25% to R2.14-billion, a factor which has been attributed to higher finance and depreciation charges, as well as the cost of retiring older locomotives.

On the main factors which affected his organisation’s performance, Molefe said: “A decline in the iron-ore price to $82 (R896) a ton from $102 a ton a year ago, a fall in the price of thermal coal from $80 a ton to $67.”

Transnet needs to raise R312-billion as part of its growth strategy, which encompasses boosting track capacity and acquisition of new locomotives.

According to the report, Transnet spent R18.7 billion on capital projects. Early this year, it signed a R50-billion deal for 599 electric and 465 diesel locomotives.

From a transformation perspective, Transnet locomotive acquisition strategy is interesting as a consortium that includes people from historically disadvantaged backgrounds has been engaged.

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