The current recovery process at Transnet must be seen as a transition period, with the rail and port entity’s long-term goal being to reach a state of reliability and sustainability, says Transnet group CEO Michelle Phillips.

Participating in a panel discussion on ‘Progress through private sector partnerships’ at the Investing in African Mining Indaba 2026 in Cape Town this week, Phillips cast a spotlight on the main challenges the transport rail and ports entity faced as it moved to reinvent itself.

“Transnet has a long way to go. We still have issues of asset reliability and funding. We are working as hard as we can with what we have. We have to do more with less.

“We have applied to government for funding through the Budget Facility for Infrastructure (BFI), for very specific projects, and we hope we’ll be successful.”

The BFI is a National Treasury mechanism for funding large-scale public projects (R1-billion-plus) to drive economic growth.

Phillips added that security remained a challenge, with Transnet last year losing around 4.5-million tons on its system owing to theft and vandalism.

“We continue to collaborate with customers to protect the system.”

“The other challenge as we move into next phase – beyond stabilisation to scale-able, bankable partnerships – is that we want to make sure we deliver quality transactions to the market,” noted Phillips.

“We do not want to be caught up in court battles because people have lost bids. We want to work with business to ensure we manage this well.”

Phillips said Transnet also struggled with costs, but perhaps not in the way that might first come to mind.

“Because we are a State-owned enterprise, it means that we pay a premium for everything we purchase.

“We find that our customers are able to go to market for the same product, the same parts, at a fraction of the price, and much shorter delivery periods.

“We are going to focus on further reducing our cost of doing business.

“We think we are only seeing the tip of the iceberg in terms of the type of pricing that we get from the market compared with what our private sector partners get.”

Transforming the Logistics Landscape
While Transnet had been working with the private sector in recent years to rehabilitate the country’s rail and port system, the real impact of private-sector participation would only be felt as the State-owned entity moved from recovery mode to executing bankable, long-term transactions, explained Phillips.

“That is what we believe will transform the logistics landscape – that shift from ad hoc, crisis-driven support to structured participation and scale.

“What do we need? We need bankable partnership models. You’ll see us advancing private-public partnerships across our business – rail operations, rolling stock, port terminals, corridor infrastructure. We intend, certainly, to move faster from design to execution in these transactions.”

“Mines play a critical role because they make these transactions bankable,” added Phillips.

“They are able to provide certainty in the long term – 25 years and longer – about where the product is going to come from. We think mining will play that critical role for us in providing the certainty that investors want to get these projects going.”

At the end of the day, it was important to note that while the current recovery process was a positive joint venture with the private sector, the real growth the country required would only come through “structured, disciplined, properly governed partnerships”, emphasised Phillips.

“You’ll see us over the next weeks and months going to the market, putting out transactions and inviting the private sector to bid and to come in with us and manage these projects and businesses going forward.”