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Compiled by the Government Communication and Information System --------------------------------------------------------------- Date: 04 Jul 2006 Title: Transnet to spend R64.5b on core businesses --------------------------------------------------------------- By Sello Tang, tel: (012) 314-2404 Johannesburg - Transnet has committed R64.5 billion to be spent on core businesses over the next five years. This comes in the backdrop of this year's sound financial performance posted by all Transnet subsidiaries. The state-owned transport company has posted a massive 57 percent increase in operating profit from R3.1 billion last year to R8.5 billion this year. The government's freight enterprise has set aside R6.3 billion for South African Ports Operations (SAPO), R4.9 billion for Petronet, R2.6 billion for Transwerk, while R18.6 billion will go to the National Ports Authority (NPA). Spoornet will receive a bigger chunk of R31.5 billion. Much of the spending on Transnet's budget would be channelled towards maintenance and upgrading activities in various subsidiary structures, said Transnet Chief Executive Maria Ramos today. Ms Ramos said that her group was planning to beef-up Spoornet services, indicating that they would order extra locomotives in the five-year plan. "We treat service delivery to our clients as a very important component of our daily activities," she said, urging that a lot of work should be put in this regard to keep clients satisfied. As part of its four-point turnaround strategy, the group has finalised its "Port and Rail Master Plan". The four-point turnaround strategy of the group includes lowering the cost of doing business by improving on corporate governance and risk management, re-engineer its business, human capital development and restructuring the balance sheet. Ms Ramos noted that this plan was imperative to the group's future growth. Regarding its turnaround strategy on human capital development, the group has completed its medium term capacity-building and skilling programme. "We have also introduced a new reward and performance management system and the roll out has begun," she said. Regarding the fund to be channelled to NPA for upgrading and expansion, Durban would receive R8.7 billion, while Cape Town was allocated R3.9 billion, Ngqura R2.5 billion and Richards Bay R1.4 billion. "We also are in tough negotiations with our future suppliers in line with our Vulindlela project," said Ms Ramos, adding she hoped that their efforts would deliver significant improvement in the group's efficiency, cost reduction and customers' service. The sales of non-core operations of the group were also confirmed to be well on track, with the first transaction of selling shares worth 82 million in MTN and M-Cell already concluded. Other non-core operations up for sale include V&A Waterfront in Cape Town, Freightdynamics, Viamax, VAE Perway and Autopay. Processes are also underway to transfer the South African Airways (SAA) to the Department of Public Enterprises. "The challenge ahead now is to ensure that we sustain the performance so that Transnet delivers a reliable service to all its customers; an acceptable economic return to its shareholders; and is sustainable and a choice employer," said Ms Ramos. - BuaNews |
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