Public Enterprises Committee concerned about impact of increasing theft and vandalism on Transnet’s revenue
10 November 2023
The Portfolio Committee on Public Enterprises received a briefing yesterday from Transnet on the entity’s annual report and financial statements for the 2022/23 financial year and it was deeply concerned about the impact of theft and vandalism on Transnet’s revenue.
In its presentation, Transnet indicated that in the freight rail division, the company has experienced a huge spike in cable theft over the past five years. In the same period, security-related incidents of theft and vandalism of infrastructure increased by 179 per cent. This has contributed to escalating revenue loss and repair costs, something the committee said needs to be urgently addressed.
Committee Chairperson Mr Khaya Magaxa was also alarmed to hear how much Transnet spends on private security. In a previous meeting the committee had with organised labour, labour union representatives questioned the quality and capacity of the companies appointed by Transnet to protect its assets, Mr Magaxa reported.
The committee is of the view that the battle against theft and vandalism is being lost, despite all efforts to address the problem. The low conviction rate of the perpetrators is also discouraging. The committee also noted with concern the underspending on capital projects, as this will also impact negatively on Transnet’s ability to generate revenue.
Another concern for the committee is that Transnet missed various targets in the year under review, in which 26.3% of targets were met in comparison to 38.6%, a decline of 12.3%. The committee pointed out that a turnaround plan should ensure that recovery plans achieve tangible progress and said it would monitor progress in this regard as part of its oversight responsibility.
Committee members said the shareholder compact, which has not yet been signed, will have a tremendous impact on the ability of the department and the committee to do their oversight work. However, Transnet informed the committee that it will not be able to achieve some of the shareholder targets due to various challenges within its operating environment.
Board chairperson Mr Andile Sangqu said he agrees with the committee’s observations. “There are a myriad of reasons, living with the aftershock of state capture and manifest in figures and financial statements.” Transnet also needs help to address its debt obligation of R130 billion, he added.
On the issue of privatisation, the Minister of Public Enterprises, Mr Pravin Gordhan, reassured the committee that no privatisation is being planned. However, given Transnet’s level of debt, the poor fiscal situation, and operating constraints, it is important to leverage private-sector participation and equity where necessary. This is to avoid the state losing control of key institutions and projects.
Mr Magaxa also expressed the committee’s displeasure in meeting Transnet and its new board after three of its top executives have resigned from the company and with no accounting before the committee. Transnet reported to the committee that the entity made a loss of R5.7 billion in the 2022/23 financial year.
Issued by Yoliswa Landu, Media Officer, Parliamentary Communication Services, 10 November 2023
