Transnet on Monday announced the termination of its relationship with Gupta-linked Trillian and Regiments Capital. The company indicated that it had also set aside R20 billion for future acquisitions as part of its plan to expand its services beyond its core business as a port and rail operator. This was according to the company’s chief executive Siyabonga Gama.

Transnet and Trillion were both mentioned in former public protector Thuli Madonsela’s State of Capture report which noted that both companies were worthy of being investigated.

In her report Madonsela said that both companies invoiced Transnet for work that was not done and that this needed to be closely looked at. In a media interview on Monday, Gama responded to this and said that he was satisfied that it got value for money from Trillian and Regiments Capital.

He did however add that “As Transnet we have resolved that a continued relationship either with Trillian or Regiments is no longer in our interests.”

An advocate has been appointed by Trillian chairman Tokyo Sexwale to look into Madonsela’s allegations.

Madonsela’s report also indicated that the investigation into Transnet will form part of “the next phase of the investigation”.

Transnet earnings take a knock from weak economy

Transnet announced its results for the first six months of the financial year on Monday and indicated that weak economic conditions continued to delay the implementation of its multibillion-rand modernisation programme.

Gama said he was going to look at ways to boost the level of consumer and manufactured goods transported on Transnet’s rail lines, as well as reduce a reliance on coal and iron ore. He said as much as 25% of revenue could be generated outside South Africa over the next five to six years.

While overall earnings at the company declined 0.3% to R13.9 bn in the six months to September, revenue increased 1.2% to R32.6 bn.

New avenues to be explored

Gama explained that Transnet expanded its capital-expenditure programme a year ago to as much as R380 bn over the next 10 year period. For now, chief financial officer Gary Pita said its current seven-year spending plan was for R277,8 bn.

Pita said the company would revise its planned capital expenditure based on projected demand from customers.

Gama said the company was considering looking at new services such as freight forwarding and shipbroking.  He added that Transnet was considering buying assets such as liquid-bulk facilities and inland terminals.

“We need to become much more acquisitive,” Gama said. “We are already looking even further afield to places such as India in terms of where we could participate, and also in the Middle East. But in the main we want to look at the African continent itself.”