Still plans to raise funds partly through debt.

JOHANNESBURG (Reuters) - South Africa's Transnet Ltd has raised its five-year budget for projects by 16 percent due to soaring costs and will delay a new oil pipeline by a year, the Business Report newspaper reported on Wednesday.

The paper said the logistics group, which plans to upgrade rail infrastructure for transporting iron ore and coal, would now spend 93 billion rand on new projects from its previous budget of 80 billion rand.

"Transnet has 7 billion cash on hand and its capital expenditure budget has risen to 93 billion rand," the Business Report said, quoting Transnet's general manager for projects and execution Neville Eve as saying.

Estiamted costs of Transnet's new multi-purpose pipeline to be built between the port of Durban and Johannesburg had risen by over 20 percent to 15.4 billion and its construction, which was initially due for completion next year, will now be delayed until 2012, the Business Report said.

The pipeline, which is expected to replace a 45-year-old line that has reached the end of its life cycle, will have the capacity to transport 1.2 million litres of oil products per hour, the company said.

Transnet said it was on track with plans to tap U.S. and European bond markets to raise an initial $500 million for various projects.

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