Investing extensively in the broader economy of the African continent could be a game-changer state-owned freight rail carrier Transnet, as well as contributing to the continent's integration - and few are in a better position to argue this than Chief Executive of Transnet International Holdings Petrus Fusi.
Transnet International Holdings, a subsidiary of Transnet, was launched in March 2018 to facilitate various rail, port and pipeline projects across Africa. Its foray into the rest of the continent comes as global economic superpowers are also looking to make their mark on the African continent and capitalise on its growth potential.
Fin24 sat with Fusi on the sidelines of the 2020 Investing in African Mining Indaba in Cape Town earlier this month.
Driving economic growth
He said that through the establishment of Transnet International Holdings, Transnet hoped to use its 32 000 km rail network and other catalytic infrastructure under development to drive the growth of the continent's economies through diversely funded projects.
"Transnet International Holdings uses Transnet rail, port and pipeline networks to align services across Africa. We are a wholly Transnet-owned subsidiary.
"We will look at viable projects, but we do not intend on financing these from our balance sheet," Fusi said.
Fusi told Fin24 that Transnet was one of few state-owned entities that did not approach the national fiscus for its projects. Saying this, he expressed confidence that Transnet International Holdings could draw investor appetite for major projects around the continent.
"We expect corporate banks and commercial lenders to come in and participate. We not exposing the balance sheet. But we are not going into the rest of Africa just for its own sake. We want to help grow the continent," Fusi said.
Fusi named the Botswana rail partnership as one example of a venture outside of South Africa that Transnet International Holdings was involved in which would pay dividends to both countries.
"The Botswana rail partnership is now operational.
"We have teams doing conditions assessments on site and working on refurbishing rolling stock. The details are currently being ironed out and the tons it will carry will be informed by the additional wagons on the network," Fusi said.
'We remain hopeful'
He said Transnet International Holdings was also at an advanced stage of a project which involved refurbishing Ghana’s rail network.
He said the company was also making progress on its North-South corridor development.
"We have engaged with the Democratic Republic of Congo. Zambian Railways already has a rolling stock revitalisation proposal.
"The Zimbabwe coal development transaction time has expired because of challenges in due diligence. We do remain hopeful that they will take if back to market," he said.
Transnet International Holdings looks to fill investment gaps in projects around the continent, said Fusi - for example, the General Electric Consortium that pulled out of a rail concession in Nigeria, handing over leadership of that concession to Transnet International Holdings in 2018.