Transnet Expects Capital Expansion To Cost R336.6 Billion
South Africa’s State-owned logistics firm Transnet expects its capital expansion plan will now cost R336.6 billion. This is an increase from R312.2 billion estimated year ago.
Transnet is 4-years into a 7-year plan to expand railways, pipelines and ports in South Africa. The increase is partly due to higher costs as the rand loses value against major currencies.
Reports are that in the first 3 years, Transnet spent R92.8 billion.
So at about 43% of the 7 year timeline, the capital plan is at about 27% of the 7 year target. Will the pace of Transnet’s capital execution quicken in the face of the 2013-17 expected global commodities slowdown?
What is your opinion?
Reports are that Transnet now channels about 45% of its investment into maintaining existing assets and the rest to increase its capacity.
Recent government reports confirmed that there is quite a bit of differed rail maintenance to catch up with.
According to published sources, Transnet’s total capital expenditure spending over the last 3-years now stands at R92.8 billion with the rail mode accounting for 74% of the total spent.