Business

Transnet gets R3bn for rail investment

29 June 2010

Transnet has secured a loan of up to US$400-million (over R3-billion) from the African Development Bank to revitalise and expand South Africa's rail infrastructure, as part of a five-year, R93-billion capital investment programme that will improve regional integration and lower the cost of doing business in the country.

In a statement on Friday, the Bank said the loan would help Transnet to "revitalise and expand vital rail infrastructure" and thus to stimulate trade and boost sustainable economic growth.

"It also aims to support local suppliers and increase their competitiveness," the Bank said.

Creating capacity

The Bank said the loan would go towards financing Transnet Rail's capitalised maintenance plan, which forms part of Transnet's capital investment programme.

"The programme addresses South Africa's freight logistics strategy of creating capacity ahead of demand through improvements to freight transportation infrastructure."

A successful turnaround at the state company had laid the foundation for the current growth strategy, whose overarching theme was improving customer service, growing volumes and providing capacity.

"It is expected that the scope, integration, and reliability of infrastructure coverage and services will greatly improve as a result of the investment programme, with significant increase in operational efficiency and productivity in all of Transnet's business areas."

Expanding regional footprint

The Bank said it looked forward to Transnet increasing its regional footprint.

"The project is well-aligned to South Africa's national priorities and the Bank's country assistance, regional integration, and the private sector strategies."

The Bank added that its participation Transnet's investment programme would provide direct support for infrastructure development, which was a key focal area for the institution.

"By improving the South African transportation network, regional trade and integration will be facilitated."

Sapa



	Early morning winter mist across freight containers waiting to be unloaded at the rail depot in Alrode, Johannesburg (Photo: Chris Kirchhoff, MediaClubSouthAfrica.com)