The collapse of Transnet has severely impacted South Africa’s economic performance, with estimates placing the cost of its poor performance on the economy at R353 billion in 2023.
South Africa’s second-largest state-owned enterprise , Transnet, has collapsed from posting a R5 billion profit in 2019 to a net loss of R5.7 billion in 2023. It also has over R120 billion in debt.
Analyst at Coronation, Humaira Surve, outlined in a recent research note how Transnet has collapsed and why South Africans can be optimistic about its turnaround. From a social perspective, increased rail usage in South Africa would make our roads safer for all users and lower the cost of consumer goods through lower transport costs.
Given South Africa’s commodity-rich economy, we have excellent origin/destination pairs, with mines on one end and ports to the rest of the world on the other, Surve said. This means that electric locomotives, which are extremely cost-effective, cannot run on half of the corridor, which requires the use of diesel locomotives on the affected sections.
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