5 questions: Transnet’s Tau Morwe on derailments, daring ventures and finding those funds
Transnet acting group CEO Tau Morwe invited Fin24 to speak to him upon one of Transnet’s blue passenger steam trains on the side lines of this past week’s Investing in African Mining Indaba at Cape Town’s International Convention Centre.
The renowned Blue Train is designed to impress passengers from its design to its comfort factor. Transnet is hoping that its business propositions for investors in mining, manufacturing and other hard sectors will be just as compelling.
However, the state-owned freight rail company must confront operational and governance challenges if it hopes to close a dark chapter in its history and proceed to help investors take advantage of an economy that is ready to do business with them.
Fin24: What message does Transnet have for investors now?
TM: We are at this event because a large chunk of our customers are in the mining sector. We hope to outline that we are offering world-class infrastructure and services to support their businesses. We have met with several businesses already.
Fin24: What has the response from investors been like?
TM: So far it has been positive. We are looking at opportunities for partnerships and line linkage, not only with other companies, but with other countries. We are having meetings with Swaziland and Botswana to this effect as well.
Fin24: What have you been doing on the front of regional logistics for business?
TM: One thing we are looking at is a feasibility study on the port of Boegoe Baai in the Northern Cape. After that is done, we must work to engage those lines. Companies have approached the Department of Mineral Resources to find out how Transnet can help them meet their needs.
Fin24: What are some challenges when it comes to keeping this infrastructure in shape for investor use?
TM: One challenge we have been dealing with is derailments. We have had to shut down coal and export lines because of this. Instances of derailment are usually categorised as derailment due to neglect and derailment due to sabotage. We have had close to R1bn worth of write-offs on infrastructure because of derailments. But we are putting a programme in place to address this through increased visibility of management and staff education.
Fin24: And what has Transnet done so far to recover funds in the procurement space?
We have been revisiting certain contracts where wrongdoing was found, to try and speak to original equipment manufacturers about recovering those funds. In fact, we will start this month to establish what was lost in the locomotive contract where money was lost and approach affected suppliers.
Fin24 also asked about precautionary suspensions announced at the utility. The article can be found here.