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Transnet restructuring could pick up sp... Sentrachem's new broom sweeps clea... Toco quits the squabbling and restores ...
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Transnet restructuring could pick up speed
PRIVATISATION
A DRAFT report to Public Enterprises Minister Stella Sigcau by her private-sector advisers recommends widespread privatisation of the company's numerous subsidiaries, including rail operator Spoornet. The report (dated March 24), by UK investment bank HSBC and its local stockbrokers Simpson McKie James Capel, goes further along the privatisation route than Sigcau has publicly wanted to acknowledge to date. It suggests that the difference in outlook between Sigcau and the Department of Transport is narrowing. Earlier this month Ketso Gordhan, director-general of Transport, expressed frustration about the divided government responsibility over Transnet. The drive to restructure Transnet will be given a further push soon when, as expected, cabinet accepts recommendations by the Department of Finance to restructure the group's pension fund, which is saddled with an actuarial deficit of R8-billion. HSBC and Simpson McKie James Capel were appointed advisers to Sigcau in December last year. They acknowledge in their report that they have not represented all the possible options. "However, it focuses on those options which, in our preliminary opinion, are most likely to be practicable," they say. Their most surprising verdict is that on Spoornet, Transnet's largest subsidiary and previously considered a candidate for restructuring only. The report suggests that Spoornet be maintained either as a single entity or split into several operations running the various industrial lines, such as coal, iron ore or timber. Thereafter the new company, or companies, should be "privatised by means of trade sales or flotation". The advisers recommend the concessioning or elimination of Spoornet's unviable passenger service. Concessioning (contracting private sector operators to run a business) is also the favoured option for commuter rail group Metro. The advisers recommend only one option for SA Airways: "Privatisation by means of a strategic equity partner or flotation." This option was expressed by Gordhan earlier this month and echoed by Sigcau this week after it emerged that the airline will report a loss of R345-million in financial 1996/97. Among the other Transnet operations that should be privatised, according to the report, are pipeline operator Petronet, road freight and passenger operator Autonet, the heavily indebted parcel group PX, its telecoms arm Transtel, IT subsidiary Datavia and most of the properties once they are transferred to the relevant businesses. HSBC and Simpson McKie James Capel also advise a separation of the port infrastructure and operations currently falling under harbour operator Portnet. Both divisions could subsequently be privatised. An alternative to this option would the the creation of companies around individual ports, to be privatised later.
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