OWN CORRESPONDENT, Johannesburg | Wednesday 10.00am.
TRANSNET has been cross-subsidising some of its business units, using its profitable companies to subsidise its loss making one, the transport department’s Moving South Africa study suggests.
The transport parastatal has long denied crossfunding, despite widespread speculation within the sector that it is a common practice by Transnet.
The study — the government’s long-term transport strategy — indicates, however, that profitable business units such as Portnet are not able to reinvest at sustainable levels because their excess capital is being shifted to other business units. The study said that South African Airways’ balance sheet has been muddied by its association with Transnet, with Transnet’s ability to crossfund SAA insulating the airline from outside economic pressure.
Turning to the role of minibus taxis in South Africa, the report said it expects the market share of the informal taxis to decline sharply in the next 20 years. Taxis, the report envisions, will serve primarily as feeders to busses and trains. Urban transport corridors carrying up to 10000 passengers a day will be run by busses and trains, the report said.