KIGALI – South African state rail-freight operator Transnet is embarking on a major expansion drive in the rest of the continent, offsetting a slowdown at home caused by the slump in commodity prices, chief executive Siyabonga Gama said on Wednesday.
Transnet, which operates nearly three quarters of all Africa’s rail network, was opening offices in West and East Africa and looking to deploy its expertise in running ports and pipelines as well rail, Gama told Reuters on the sidelines of the World Economic Forum on Africa in Rwanda.
“We have spent seven or eight years trying to fix our issues at home and we have not paid enough attention to the rest of the continent,” he said.
“The time is now ripe for us to do that.”
Any regional expansion would be financed on a project-by-project basis, rather than centrally, he added.
“We don’t intend as South Africa to fund all these things. We are looking at project finance. We are looking for the countries to come in as well,” Gama said.
At home, Transnet has struggled with declining commodity export volumes stemming from the slump in minerals prices. Even though there are signs of a tentative recovery, this year’s results were likely to be worse than last year, he added.
“It’s starting to go up but it’s very slow. My sense is that we’ve bottomed out and it’s beginning to rise again,” he said. “But our sense is that the trading numbers in 2016, if you look at our volumes, will be less than 2015.”
The firm, one of the best-managed of South Africa’s state-run companies, was almost fully financed for this year and had no plans to issue any bonds, he said.
Any further funding if required would come from drawing down existing credit lines, most notably the outstanding $1.5 billion of a $3 billion loan facility with the China Development Bank, he said.