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Transnet urged to use Budget Facility for Infrastructure to fund project partnerships

12th March 2025

By: Terence Creamer

Creamer Media Editor

     

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While Finance Minister Enoch Godongwana said that additional guarantees will be considered to refinance Transnet’s maturing debt and its capital investment programme, no equity support was announced in the delayed Budget.

Instead, emphasis was given to Transnet drawing on the reconfigured Budget Facility for Infrastructure (BFI), where multiple bid windows are now planned rather than a single yearly window.

The BFI is an appraisal review process that supports the consideration of large-scale infrastructure proposals valued at more than R1-billion and that require fiscal support to cover a “viability gap”.

Ahead of the March 12 Budget speech, the National Treasury published a call for proposals under the new system, with the first window to close on April 16, and with three additional BFI windows planned for the 2025/26 financial year.

As part of the restructuring, financing decisions to determine the appropriate fiscal mechanism to support projects have also been separated from the evaluation and budget processes.

“Should Transnet require gap funding for its private sector participation (PSP) projects, the BFI will consider these after proper packaging and financial structuring,” Godongwana said.

For the 2025 Budget cycle, the BFI has approved nine projects with a total value of R55.5-billion, including the Cape Town Container Terminal Expansion (Phase 2B), with R15.3-billion to be funded by the facility.

Godongwana also announced that the Department of Transport and Transnet would engage the market on PSP projects in the following areas:

  • The ore, chrome, coal and manganese lines;
  • The expansion and automation of the ferrochrome and magnetite terminal at the Port of Richards Bay;
  • The container and automotive sectors, including the potential designation of the South African container port system as a regional trans-shipment hub for major shipping lines; and
  • the establishment of an independent rolling stock leasing company.

Edited by Creamer Media Reporter

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