DEPARTMENT: PUBLIC ENTERPRISES
REPUBLIC OF SOUTH AFRICA
NATIONAL ASSEMBLY
QUESTION FOR WRITTEN REPLY
QUESTION NO.: 311
DATE OF PUBLICATION: 07 MARCH 2014
311. Adv A de W Alberts (FF Plus) to ask the Minister of Public
Enterprises:â
(1) What is the (a) amount and (b) percentage of the capital expansion
programme of Transnet and the Passenger Rail Agency of South Africa (Prasa)
that (i) Transnet, (ii) Prasa, (iii)(aa) South African and (bb)
international banks and (iv) (aa) South African and (bb) international
institutions (aaa) are financing and (bbb) will be financing;
(2) Which sections of the capital expansion programme are under
discussion in each entity;
(3) (a) which (i)(aa) South African and (bb) international banks and
(ii)(aa) South African and (bb) international institutions are involved
with the capital expansion programme in each case and (b) how was their
involvement obtained? NW364E
According to Transnet:
(1)(a)(i) R209 billion of the R312 billion capital investment plan will be
funded by Transnet from internally generated cash and R103 billion will be
funded through the debt capital markets.
(1)(a)(ii) Not applicable. The Passenger Rail Agency of South Africa
(PRASA) does not report to the Department of Public Enterprises (DPE).
(1)(a)(iii) Table 1 below indicates the funding sources between domestic
and international:
|(aaa-bbb) |(aa) |(bb) |
|Status |South African |International |
|Financing as at 30 |R46Â 682 |R34 048 |
|September 2013 | | |
|Will be financing |~R62 200 |~R41 400 |
(1)(b)(i) 66% of the R312 billion capital investment plan will be funded by
Transnet Treasury from internally generated cash and 34% will be funded via
the debt capital markets.
(1)(b)(ii) Not applicable. PRASA does not report to DPE.
(1)(b)(iii) Table 2 below indicates the percentage in terms of funding
sources:
|(aaa-bbb) |(aa) |(bb) |
|Status |South African |International |
|Financing as at 30 |58% |42% |
|September 2013 | | |
|Will be financing |~60% |~40% |
(2) In terms of the Compact signed with DPE, with reference to the PFMA,
approval for any acquisition or disposal of a significant asset which has
an estimated total cost exceeding the materiality amount agreed in the
Compact must be obtained from the Shareholder.
All acquisitions or disposals below the agreed Compact materiality amount
are approved in terms of the Transnet Delegation of Authority with various
approval limits up to the Transnet Board of Directors level.
To date the following investments were approved by the Shareholder
Minister:
⢠Coal Line expansion to 81mt
⢠Ore Line acquisition of 32 Class 15E locomotives
⢠Ore Line Expansion to 60mt
⢠Acquisition of 1 064 locomotives for Freight Railâs General Freight
Business
⢠New Multi-Product Pipeline
It should also be noted, that all projects and programmes making up the
R312 billion portfolio are approved by the Transnet Board of Directors
during the Annual Corporate Plan and budgeting process and contained in the
Corporate Plan, which is submitted to the Shareholder Minister by
28Â February of each year.
(3)(a) Transnetâs funding strategy aims to ensure that the Company has
sufficient liquidity to meet all its operational and capital investment
funding requirements by raising its required funding cost-effectively from
diverse funding sources, through the Domestic Medium-Term Note Programme
(DMTN), Global Medium-Term Note Programme (GMTN), Export Credit Agencies,
Development Finance Institutions, financial institutions as well as new
sources whilst maintaining its investment credit rating. As at September
2013, funding has been obtained from the following investors, see tables:
(3)(a)(i)(aa) Table 3 domestic banking institutions
|South African Banks |
|Standard Bank Corporate Investment Bank |
|Nedbank Ltd |
|ABSA Bank Ltd |
|RMB/ Division of FirstRand Ltd |
(3)(a)(i)(bb) Table 4 international banking institutions
|International Banks |
|Standard Bank London |
|The Bank of Tokyo Mitsubishi Ltd |
|French Development Bank |
|Sumitomo Mitsui Banking Corporation |
|African Development Bank |
(3)(a)(ii)(aa) Table 5 domestic funding institutions
| Main South African Institutions |
|Sanlam Capital Market Ltd |
|Sanlam Investment Management (Pty) Ltd |
|Blue Titanium Conduit Limited |
| |
|Bonds, Repoâs & Commercial Papers issued in SA |
|Issued under DMTN |
(3)(a)(ii)(bb) Table 6 international funding institutions
|International Institutions |
|American Family Life Assurance Co. |
|Export Development Canada |
| |
|Bonds issued internationally |
|Issued under GMTN |
(3)(b) The Bonds, Commercial Paper and Repurchase Agreements (Repoâs) are
part of the DMTN/GMTN program and are raised via auctions. Other loans are
subject to commercial negotiations.
Funding is obtained following the approval of the Board of Transnet and the
Shareholder, the DPE, in terms of the Transnet Delegation of Authority and
the Public Finance Management Act.