Estimated 10% of GDP lost to Transnet inefficiencies; ARIA calls for private sector intervention

Transnet's latest annual report highlights net profits of R5bn - marking a significant turnaround from the R8bn in losses in the prior financial year - but the African Rail Industry Association (ARIA) says don't be fooled. ARIA CEO Mesela Nhlapo spoke to Michael Appel about the state of the country's ports and rail authority in a climate in which South Africa should be perfectly positioned to take advantage of high coal and commodity prices - but isn't. ARIA wants the monopoly of Transnet broken, with greater private sector involvement for which there is significant appetite. This particular beleaguered state-owned entity is fast becoming South Africa's next Eskom, says Nhlapo. She warns that decades of underspending on maintenance and the propensity to throw good money after bad at Transnet comes at a huge cost to South Africa's economy. Nhlapo quotes Professor Jan Havenga, head of logistics management at Stellenbosch University, as estimating the cost of a floundering and ineffective Transnet at R385bn a year, or approximately 10% of GDP. Learn more about your ad choices. Visit megaphone.fm/adchoices