Use our pull-down menus to find more stories
  


OR subscribers use AllAfrica's premium search engine


Click here to read or make comments on this topic »

South Africa: Transnet's Turnaround


Business Day (Johannesburg)
 

Email This Page

Print This Page

Comment on this article

Business Day (Johannesburg)

EDITORIAL
1 July 2008
Posted to the web 1 July 2008

Johannesburg

OF THE many numbers that Transnet released yesterday as it reported its year-end results, perhaps the most telling was that rail tariffs per ton per kilometre are on average 40%-60% cheaper than the cost to transport the same goods by road.

Yet the bulk of SA's freight business still goes by road, not rail, because most businesses still don't trust the railways to get their goods from City Deep to Durban (for example) safely and reliably.

Until they do, the turnaround in Transnet's rail operations is far from done. But it has at least begun: in the latest year general freight volumes showed their first increase for more than a decade. And Transnet reported healthy gains in productivity at its port and pipeline operations, as well as in the rail division.

This is important, because though there's no question that CE Maria Ramos has succeeded in turning around the group's finances in the four years since she took over a Transnet that was ailing in every way, it's the operational turnaround that's essential to make it easier and less costly to do business in SA, in line with the objectives set out in the government's growth strategy.

Transnet is well aware that regaining a competitive edge for its freight rail business remains a challenge. But its strategic focus has now shifted "from turnaround to growth".

Financially and operationally, the figures do show a group that appears well poised to grow its rail, port and pipeline businesses, into which it is investing R80bn over the next five years.

But life may not be quite as easy as it has been. The downturn in the economy is likely to have an effect . So too are the tighter regulatory constraints that Transnet is facing, particularly in its port and pipeline businesses. It has won the battle to prevent a government move to separate the ports out into a separate business, but as it succeeds, the group could well face new challenges.

Relevant Links

Will Ramos be around to oversee the growth strategy? That's the big question, given that her contract is due to expire soon.



AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.

 
Share this on:
Facebook
Digg
Del.icio.us
StumbleUpon
Muti


Copyright © 2008 Business Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here.

Make allAfrica.com your home page | RSS Feed

Top | Site Guide | Who We Are | Advertising | Search | Subscribe

Questions or Comments? Contact us. Read our Privacy Statement.

HOME
allAfrica.com


Relevant Links




Stand Up for EAC Common Market
Oil, Gas Not Real Wealth - LNG Boss
First Alliance Applauds Pencom's Activities
NPA Irresponsible, MD Admits
New Power Plant for Kaduna, Kano And Katsina