Transnet’s inability to rail sufficient volumes of commodities to ports is expected to cost the economy around R353 billion in 2023.
This follows a radical shake-up at board level in July, with nine new appointments. Minerals Council vice-president Andile Sangqu has been appointed as chair, a move seen as shifting Transnet closer to its most important client, the mining sector.
“It’s refreshing to see a minister talk so directly about the problems facing Transnet and demand accountability and action in the way that he has,” says Havenga.Breaking down the losses to the economy, GAIN Group director Dr Zane Simpson says Transnet’s inability to rail sufficient volumes of commodities to ports cost the economy R411 billion in 2022, adding that an economic loss of around R353 billion is likely for 2023.
Iron ore suffered a direct forex loss of R18 billion due to lost export sales, a figure that balloons to R54 billion when the broader impact on the iron ore mining sector is considered.Transnet’s inability to meet the demand for export rail volumes meant exports had to ship by road, representing a further cost of R95 billion to the economy in over-payment for transport.
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