Johannesburg, South Africa — 12 March 2013 – South African national transport carrier Transnet might have to cut its planned R300 billion capital expenditure programme by R50 billion if economic growth proves disappointing or strikes affect the sector.
Revealing this possibility at a conference hosted by Bank of America Merrill Lynch, Transnet CEO Brian Molefe said that at present there were no plans to curtail the programme‚ scheduled to take place over the coming seven years, reports Fin24. “We may have to cut the capex programme by R50 billion, but so far we are not taking the decision … at the moment I think it is unlikely‚” he added.
Transnet’s road‚ rail and port expansion projects are the backbone of the government’s ambitious infrastructure spending plans, and are aimed at boosting economic growth and investment.
Earlier this month‚ Molefe said Transnet’s plans were premised on an annual economic growth rate of about 3%. The economy expanded by 2.5% last year and is expected to pick up slightly to 2.7% this year before accelerating to 3.5% next year.
Molefe said that Transnet “did not anticipate going to the government for fiscal transfers‚ subsidies or guarantees for its capital expenditure programme.”
Source: Fin24. For more information, click here.