In a continued bid to keep Transnet afloat, the South African government has approved an additional R51 billion guarantee facility for the embattled state-owned logistics giant. The funding is expected to help the company meet upcoming debt obligations and push ahead with its capital investment programme.
The Department of Transport, in a statement issued Thursday, confirmed that Transport Minister Barbara Creecy had already announced the approval last month, and the process of finalising the guarantee would be completed by 25 July 2025.
This comes just two years after Transnet was extended a R47 billion government guarantee in 2023, and with its total debt having reached a staggering R138 billion by March 2024. The company’s latest five-year corporate plan estimates it needs to repay R99.6 billion in the medium term.
“The government will monitor the performance of Transnet to ensure it provides adequate support to it as it implements the reforms required by the government,” the Department of Transport said.
The new funding facility is yet another lifeline for Transnet, which has struggled to recover from years of financial mismanagement, misgovernance, and large-scale corruption that saw billions siphoned from the SOE. Despite restructuring efforts, its operations – particularly its container ports – continue to lag behind global standards. In fact, the World Bank and S&P Global Market Intelligence consistently rank its ports among the least efficient in the world.
Transnet’s troubles have had ripple effects across the South African economy, impacting supply chains, hampering exports, and costing jobs across multiple sectors.
The crisis deepened earlier this year when Moody’s Ratings, on 16 May, issued a stark warning: Transnet would run out of operational and debt-servicing cash within three months if the government did not intervene. That red flag appears to have accelerated government action.
Read | Transnet Strikes Wage Deal with Unions, Averting Major Strike Action
Despite the financial injections, analysts remain cautious about the future of the state-owned entity, noting that guarantees don’t equate to direct cash infusions, and that without meaningful operational reforms and leadership accountability, the guarantees could simply delay an eventual collapse.
South Africa’s broader SOE landscape remains fragile, with Eskom, SAA, and now Transnet, becoming increasingly reliant on the National Treasury’s support.
Transnet has promised a turnaround plan that includes improved governance, infrastructure upgrades, and public-private partnerships to revitalise key rail corridors and port operations. However, with decades of decay to reverse, the road to recovery is likely to be long and fraught with political and financial risks.
As the July deadline for the full guarantee drawdown approaches, all eyes will remain on whether Transnet can finally begin delivering on its commitments or if this latest bailout will join a growing list of unsustainable lifelines.
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