As the 2025 edition of the Investing in African Mining Indaba comes to a close, it is an opportune moment to reflect on the catalytic role played by Transnet, South Africa’s state-owned logistics provider.
A vital artery of the South African economy, its success is critical for the country and region’s growth and development. By facilitating trade, supporting key industries and driving economic growth it is the engine that keeps the economy moving. Mining Indaba 2025 once again laid bare the expectations focused on Transnet. To that, our message was clear — we are on the right track.
Turning around Transnet’s fortunes is a complex and ongoing process — but we have reason to be upbeat. The government’s commitment to Transnet’s recovery, new executive leadership, our deep focus on efficiency, customer collaboration and the pursuit of private-sector partnerships give us a sense of optimism about the future.
As we near the end of the Transnet recovery plan, it is important that we ponder on the journey thus far. When we set out on the recovery path, our immediate priority was to implement a number of tactical initiatives to arrest operational decline, improve operational efficiency and protect core business elements critical to long-term viability.
South Africans will recall that, not long ago, we were battling congestion at our ports as we struggled with a shortage of equipment critical to moving containers and bulk goods. That we no longer have the congestion is a sign of progress. In the past year, we have invested in new equipment such as rubber-tyred gantries and focused on operational efficiencies. Most importantly, we have seen the benefits of collaboration. We have actively engaged our stakeholders and discussed our challenges as well as opportunities. This has opened the door for the co-creation of solutions. Together with our valued partners, we are putting in the hard yards.
We are, however, not oblivious to the need to accelerate efforts to modernise our infrastructure and invest in additional equipment as we embed a customer-centric culture where our efforts and priorities are aligned with the needs of our customers.
Rail is the most efficient and cost-effective way of getting goods to the ports, but the state of the rail network continues to hold us back. Derailments, a shortage of locomotives, and even problems with signalling are just some of the challenges that result from years of underinvestment and, of course, the aftershocks of state capture. We are heartened by the improvement in volumes moved in the past year even though we are not yet where we are supposed to be in terms of the targets we have set for ourselves.
The most critical priority at this point of our journey is the need to have a safe and reliable rail network. Notwithstanding the exciting possibilities of open access, the backbone of a thriving logistics network is a rail network that operators can use with as little interruption as possible, which means we must invest money and capital to fix the network.
Reforms are at the centre of our efforts to overcome our current challenges and fulfil our role as a key enabler of economic growth. In December 2024, our shareholder published the Final Network Statement, which is an important document outlining the rules for the entry of private operators onto the South African rail network. On the other hand, work is under way to implement the corporatisation of the Transnet National Ports Authority (TNPA), a move that will enhance governance, attract investment, improve service delivery and support economic growth.
By improving operational efficiencies, increasing competition, enhancing competitiveness, and attracting investment and innovation these reforms have the potential to unlock Transnet’s full potential
By improving operational efficiencies, increasing competition, enhancing competitiveness, and attracting investment and innovation these reforms have the potential to unlock Transnet’s full potential.
Regarding the future of Transnet, it is abundantly clear that we must think and do things differently from how we have managed and operated in the past. We are embracing that new reality and the possibilities that come with it.
Transnet is implementing these improvements amid structural issues that we still must address. These include our constrained balance sheet. This is a significant challenge for us because it limits our ability to invest in crucial infrastructure and equipment, thus stifling our long-term growth and prospects. Transnet is taking a number of steps to address the constrained balance sheet, including exploring different options to restructure our debt through a balance sheet optimisation initiative.
Collaborating with our partners, Transnet will be initiating a number of private sector participation (PSP) initiatives during the course of the year. These PSPs are crucial for our future success and underscore our commitment to crowd in private sector investment for the benefit of the logistics system as a whole.
In conclusion, Transnet’s performance in the past year is showing signs of improvement, especially in volume and revenue. We are, however, not oblivious to the challenges that lie ahead. We are betting on our employees to drive operational excellence and the agility to improve our efficiencies, as well as deepening our co-operation with trade unions to drive long term sustainability.
We believe that working together with government, our customers and industry broadly, we are making significant strides in reviving the logistics sector because we understand that when Transnet works, the economy thrives.
• Sanqqu is chair of the Transnet board
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