Pretoria, South Africa – The Portfolio Committee on Public Enterprises expressed serious concerns about the impact of theft and vandalism on Transnet’s revenue, following a briefing from the entity on its annual report and financial statements for the 2022/23 financial year.
According to parliament of South Africa, Transnet reported a significant increase in cable theft in the freight rail division over the past five years, with security-related incidents of theft and vandalism of infrastructure rising by 179 percent. This escalation has led to soaring revenue losses and repair costs. Committee Chairperson Mr. Khaya Magaxa highlighted the alarming amount spent by Transnet on private security, a concern also raised by labor union representatives questioning the efficacy of the security companies hired.
The committee observed that efforts to combat theft and vandalism are falling short, as evidenced by the low conviction rate of perpetrators. Another area of concern is the underspending on capital projects, which could further impact Transnet’s revenue-generating capacity.
The committee noted that Transnet failed to meet various targets in the reviewed year, with only 26.3% of targets achieved, a decline of 12.3%. Members emphasized the need for a turnaround plan to ensure tangible progress and vowed to monitor developments closely.
Board chairperson Mr. Andile Sangqu agreed with the committee’s observations, citing the lingering effects of state capture. He also highlighted Transnet’s need for assistance in addressing its substantial debt of R130 billion.
On the topic of privatization, Minister of Public Enterprises Mr. Pravin Gordhan reassured that no such plans are in motion. However, leveraging private-sector participation is necessary given Transnet’s debt level and operational constraints.
The committee also expressed dissatisfaction with meeting Transnet and its new board post the resignation of three top executives, noting that the entity reported a loss of R5.7 billion in the 2022/23 financial year.