The state-owned company cannot continue relying on debt for operating cash and was at risk of not meeting repayments at the present rate
Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.Transnet is falling well below its target of shifting 200 million to 220 million tonnes of freight a year, at which point — it is estimated — it will begin to make a meaningful contribution to the economy. Its current target is 170 million tonnes a year.
“This is a cause for concern because if the guarantee facility is exhausted and Transnet is unable to secure funding for refinancing, it might default on its debt repayments. Such a default could have severe consequences.”But the auditor general cautioned that Transnet’s liabilities exceeded its assets by R61 billion, which suggests that it may not be able to pay its short-term debts as they become due and payable.
“Furthermore, the lenders have been providing the waivers for an extended period of time and there is an increased risk that they will call on their debt or impose stricter conditions should the current position not improve.” The auditor general noted that this made for a maintenance backlog of R6.05 billion compared to the planned required maintenance of R10.5 billion and “a cumulative backlog maintenance of R26.5 billion” that arose as a result of funding constraints, as well as theft and vandalism.
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