Transnet gets R94.8bn in fresh government guarantees

Source: Archive

This follows the R51bn in guarantees announced in May 2025, which included R41bn to meet funding needs through to 2026/27, and R10bn for debt servicing and capital investments.

Guarantee breakdown

According to the ministry, the latest guarantee comprises R48.6bn to cover debt redemptions over the next five years, with an additional R46.2bn to protect against potential credit rating downgrades.

The government is backing Transnet’s five-year turnaround strategy, which aims to restore annual freight rail volumes to 250 million metric tonnes. In the 2023/24 financial year, volumes dropped to 152 million tonnes—down from a peak of 226 million tonnes in 2017/18.

Transnet has faced growing operational challenges due to equipment shortages, maintenance backlogs, cable theft, and infrastructure vandalism.

Rising debt and financial losses

Chairperson Andile Sangqu told Reuters that the company’s debt has risen to R145bn from R138bn at the end of the 2023/24 financial year, while its net loss widened to R7.3bn from R5.7bn the previous year.

Exporters—particularly coal and iron ore producers, who account for nearly 70% of Transnet’s freight volumes—have reported billions in lost revenue as a result of service disruptions. With rail capacity constrained, much of South Africa’s chrome is now being transported to ports by road, increasing logistics costs and damaging road infrastructure.