Cabinet says local DFI could take equity in stand-alone TNPA
Cabinet has mandated Transnet National Ports Authority (TNPA) to investigate the feasibility of one of the country’s development finance institutions (DFIs) becoming a minority equity partner, after endorsing its full separation from the Transnet group.
Minister in The Presidency Khumbudzo Ntshavheni indicated that the option of including a DFI as a shareholder was discussed by Cabinet at its latest meeting, which included an update on the implementation of reforms aimed at improving the competitiveness of South Africa's freight and logistics system.
Cabinet, she said, supported the separation of TNPA so that it could operate as a stand-alone company owned directly by the State.
Cabinet also decided that TNPA’s separation should be implemented using the following principles:
- Fair compensation for Transnet based on an independently assessed valuation of TNPA;
- Ensuring long-term financial sustainability and an equitable allocation of liabilities to both the Transnet group and TNPA;
- The protection of employees and customers;
- The preservation of strategic State ownership and control of national ports infrastructure; and
- Improving investment capability and infrastructure development.
The vertical separation and corporatisation of TNPA, which develops and maintains the infrastructure at the country’s commercial ports while providing key marine services, has been delayed for a number of years.
Nevertheless, it has also been flagged as important for levelling the playing field for private and public terminal operators and for ensuring that its revenues are reinvested in the ports rather than used to cross-subsidise other Transnet entities.
No timeframe for the separation was provided in the Cabinet statement, nor was the identity of a possible DFI shareholder. However, the Development Bank of Southern Africa has a public infrastructure mandate.
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