Government approves R48.6 billion guarantee to support Transnet

 image: Transnet

by Kelebogile Matlou

The South African government has given Transnet an extra R48.6 billion to help it pay off its debts and keep running smoothly over the next five years. This decision was made on Friday as part of efforts to fix Transnet’s financial problems.

Earlier in May, the government had already given R51 billion in guarantees R41 billion to cover future costs and R10 billion to help with daily cash needs. In total, Transnet has now received R94.8 billion in government support. Transnet is a key company in South Africa that moves goods around the country by rail and ports. But it has been struggling with money problems and poor service, made worse by credit rating downgrades.

To prevent more financial trouble, the government also set aside another R46.2 billion to protect the company from more credit risks. Transport Minister Barbara Creecy said last month that the government will work closely with Transnet to fix its operations and finances. This is part of a bigger plan to improve the country’s transport and logistics systems, with help from private companies.

The government says helping Transnet is important because the company plays a big role in supporting South Africa’s economy by moving goods and keeping businesses running.