SOE REBOOT
Transnet unveils 100 private sector leasing opportunities at its ports
Ailing state-run logistics company Transnet is touting dozens of leasing opportunities to the private sector at its seven seaports. With no more government bailouts on the horizon, Transnet has found some low-hanging fruit to boost its sagging coffers. It’s an indication that new CEO Michelle Phillips wants to get the ball rolling.
Transnet National Ports Authority (TNPA) said on Thursday that the leasing opportunities were part of its “real estate growth strategy” as it is the landlord of South Africa’s commercial seaports.
“Within the lease opportunities on offer, facilities will be repurposed for economic activity, while vacant buildings will be available for office, recreational and industrial purposes, opening business opportunities within the port cities,” TNPA said in a statement.
“Out of the current approximate total gross lettable area of 26 million square metres, the total extent covered by properties which have been issued for leasing opportunities amounts to 438,719 m².
“While these leasing opportunities allow TNPA to fully optimise the use of land within the ports, they undoubtedly present an untapped opportunity for business to unlock the future of South Africa’s trade economy whilst opening up the market for new entrants,” Dr Dineo Mazibuko, acting TNPA general manager for commercial services, was quoted as saying.
The lease terms range from one to 15 years, with the bulk of opportunities in Cape Town and Durban – each has 26 to offer.
“The RFP [request for proposal] documents were issued on 1 March 2024 with submissions closing on 5 April 2024 promptly at 12h00. RFP advertisements containing further details on accessing the RFP documents are accessible from the National Treasury’s e-tender publication portal and the Transnet website,” TNPA said.
This is a development that will no doubt be welcomed by business and is an indication that Transnet’s new CEO, Michelle Phillips, wants to get the ball rolling.
The perennial decline of Transnet’s freight rail and port operations is compounding the economic damage wrought by Eskom – and other examples of state failure – and needs to be urgently addressed.
It will be of more than passing interest to see what companies take up the offer and if there will be space for them to fill some of TNPA’s functions.
And with no more government bailouts on the horizon, Transnet has found some low-hanging fruit to boost its sagging coffers.
If it has buildings standing vacant and it is the landlord, it makes sense for it to monetise the assets by leasing them.
Why this wasn’t done years ago indicates mismanagement and dysfunction at the SOE.
But then, in the past, it could rely on capital injections from the Treasury.
It received around R6-billion in bailouts before last year’s R47-billion guarantee on its debt.
Now Transnet needs to find its own ways to remain solvent. DM
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Surely this is a half baked proposal?
Not many companies are going to spend money to upgrade a building if they can only use it for 15 years.
Look no further than Maputo harbour in Mozambique which is operated by Grindrod and reportedly performing exceptionally well. Michelle Philips, CEO # ????, no doubt a loyal ANC cadre. Same old movie and same old outcome. Watch the Unions go nuts over the prospect of privatization and any sane private enterprise will stay far away from Transnet.
Leasing of presumably, unused buildings, for a maximum of 15 years is hardly the answer.
It has been done for years in Cape Town. Buildings of the old closed down rail freight operations yards at the Coulenburg train station were rented out. The rail freight operation was moved to Belleville. But only those close to accessible local streets and roads were mostly chosen by price enterprises and thus thrived. It also helped that those buildings were next to an operating and safe CBD. Even those close to Salt River and Woodstock are still in use.
A host of Transnet buildings in Cape Town have been allowed to go to waste. They’ve either been squatted or condemned by now. Tried to rent one years ago, and despite a billboard with contract details, no-one ever responded or answered a phone call. I thought it was s scam, but just couldn’t work out the angle. But it was probably just disinterest, turns out.