The New Development Bank (NDB) formed by the BRICS bloc of emerging economies has awarded Transnet, South Africa’s national railway, a $283.53 million loan worth 5 billion rand. The loan, guaranteed by South Africa’s government, is aimed at supporting Transnet’s extensive turnaround strategy. Director General Duncan Pieterse disclosed the loan during an exclusive NDB meeting held in Cape Town recently.
It has been noted that Transnet lacks reliable freight rail and port services because it is entangled in about R130 billion in debts, as a result of under-investment over many years. The turnaround strategy, led by Chief Executive Michelle Phillips, aims at reviving its operations while improving efficiency levels. Some key initiatives include:
- – Splitting up the freight rail subsidiary into two separate units, namely: an infrastructure management company and an operating unit;
- – Reducing port backlogs; and
- – Introducing private operators onto its rail network.
With this loan, Transnet takes a giant step in its journey towards transformation and revitalization. In the same spirit of collaborating on issues such as infrastructure challenges and facilitating regional economic growth, NDB has demonstrated why they were formed in the first instance.
