The Democratic Alliance (DA) criticised the African National Congress’s (ANC’s) decision to request a bailout for State-owned rail and ports operator Transnet, saying the party appeared to be “undermining” policymaking in the Government of National Unity (GNU) by insisting that Transnet gets a substantial bailout.

The ANC announced its intention of asking the National Treasury to consider a one-off debt-relief package for Transnet before next month’s budget.

The party pointed out that the survival of Transnet and its efficient operation were critical for the steel, mining and manufacturing industries.

The DA wants government to conduct a full asset, process flow, and portfolio analysis to inform a breakup, devolution and private sector competition strategy.

DA spokesperson on Appropriations Dr Mark Burke explained that clarity must be provided for potential investors, and it must be ensured that the next injection of funds into Transnet comes from the private sector, not taxpayers.

“We cannot afford another Transnet hostage situation. The DA insists that preparations begin immediately to secure a sustainable future for South Africa’s ports, railways, and freight infrastructure,” the party said.

The DA reiterated its refusal to support any further bailouts for State-owned enterprises (SOEs), noting that conditional arrangements imposed by Treasury on past bailouts had mostly been ignored.

“…therefore, support to SOEs is not a bailout; it is a hostage situation,” he noted

Burke explained that South Africa could not afford to spend more money on failing SOEs, and that past bailouts had led to a debt-to-GDP ratio at 75% while SOEs remain trapped in a debt spiral.

“In the 2024 MTBPS, the GNU committed itself to limiting any further fiscal support to SOEs, and we expect that to remain in place,” he said.

He pointed out that Transnet had been subjected to proposed reforms under Operation Vulindlela - but the reform programme had stalled to the point where it was a major break on economic growth.

“If Transnet continues to frustrate the reform progress, the DA is of the view that it is time for the immediate devolution of Transnet’s operational components, as well as bold and far-reaching reforms that bring private-sector competition into port and freight rail logistics,” he highlighted.

He pointed to SAA and Eskom, highlighting that managing incremental reform in SOEs was lengthy for minimal performance improvement.