|TRANSNET would keep the key capital spending projects in its R80bn capex programme on course, even though volumes were now well down on the projections of a year ago, but it might be able to defer some smaller, less essential projects, Transnetâ€™ s new acting CE Chris Wells said yesterday.
The major projects accounted for more than R60bn of the total programme, but there were a myriad of smaller projects, worth anything from R1m to R200m, some of which could be deferred if the growth in the businesses that underpinned the reasoning for them was no longer there, Wells said. â€œBut we are confident that all those projects that are important to establish the capacity that is likely to be needed in the next five years will go ahead,â€ Wells said.
The group was also confident it could fund the projects. The capex programme is a big part of the R787bn in public sector infrastructure investment that the government hopes will help to support growth in the short term as well as to make SAâ€™s economy more competitive in the longer term.
Wells said Transnetâ€™s R12,7bn Durban-Johannesburg fuel pipeline would start pumping in the first quarter of 2011, in line with the licence conditions set by the National Energy Regulator of SA. Fuel companies including BP objected last week to Transnetâ€™s application to the regulator for a 65% increase in pipeline tariffs to help finance the investment , but Transnet responded yesterday that the 1,2% increase in the price of fuel that would result from this would â€œclearly not be inflationary and will not negatively effect gross domestic product growth and jobsâ€.
The group also plans to spend R19bn on its coal and iron-ore railway lines, R24bn on general freight business and R12,7bn on container terminals at the ports.