Photo by: Duane Daws
State-owned freight logistics group Transnet has revised its seven-year rolling capital investment figure to R312.2-billion, from R307.5-billion, and reveals in its latest annual report that sustaining capital will comprise 51% of that total.
The group released its three-volume annual report at the weekend, comprising an integrated report, annual financial statements and a sustainability report.
The documents reaffirmed the centrality of the Market Demand Strategy (MDS), with its emphasis on counter-cyclical investment. But they also stressed that the MDS required ongoing attention to “bring aspirations closer to economic reality”, with volumes having been adjusted downwards in line with market sentiment.
Transnet Freight Rail (TFR) was poised to consume the lion’s share of the investment from 2015 to 2021, with capital expenditure of R209.9-billion planned.
The TFR investments would be directed towards the purchase of locomotives and wagons, as well as the expansion of infrastructure.
During 2013/14, Transnet invested a record R31.8-billion and CEO Brian Molefe said last month that it planned to invest a further R33-billion in 2014/15, despite the sluggish South African economy.
The integrated report stated that the strategic focus areas for 2015 had been refined, but remained largely unchanged. “Volume and revenue projections have been adjusted to reflect capacity delivery constraints and lower market demand.”