Sasol to fund maintenance and repairs of Transnet Freight Rail ammonia tankers to ensure their deliveries

  • Sasol and Transnet Freight Rail, an operating division of Transnet and owner of South Africa’s railway, ports and pipeline infrastructure, today announced a first-of-its-kind public-private partnership to improve rail transport reliability in South Africa. 
  • Under the five-year agreement, Transnet will deliver ammonia from Sasol’s Secunda and Sasolburg facilities to the company’s customers through a dedicated fleet of 128 ammonia tankers.
  • In turn, Sasol will fund Transnet’s maintenance and repair programme for the fleet.

“Sasol’s partnership with Transnet is an investment in South Africa’s rail infrastructure network, a critical economic driver for the country and a key business enabler for Sasol,” said Sasol Vice President for Base Chemicals, David Mokomela. “The result will improve service to our customers and give us the transport capacity and reliability we need to respond to growing market demand. As one of South Africa’s largest companies, we are proud of this public-private partnership, which signals progress in advancing the country’s growth objectives.”

“This strategic partnership with Sasol demonstrates what is possible through collaboration and partnership—a foundational element of TFR’s Response Strategy,” said Acting TFR Chief Executive Russell Baatjies. “We appreciate Sasol’s support of this deal. It is a significant step toward addressing the industry’s current capacity challenges and protecting the ammonia rail supply—a critical material used in South Africa’s agriculture, mining and chemical markets,” he added.

TFR and Transnet Engineering (TE), who will execute the Sasol ammonia fleet’s maintenance and repair work, expect additional revenue generation from anticipated increased haul volume and the Sasol-funded maintenance and repair work.

TFR, which is Transnet’s largest Operating Division, provides the rail network infrastructure and operates rail services across major corridors to transport a broad range of bulk and general freight commodities, including mining, agricultural, manufacturing goods, bulk liquids, containerised freight and automotive units and components for export, regional and domestic markets. Freight Rail is recognised as a heavy haul rail operator for coal and iron ore on export lines and recently extended this capability to export manganese on the iron ore and Gqeberha lines. The Freight Rail network and rail services provide strategic links between ports, freight terminals and production hubs.

Transnet, who has debts of 130 billion rand and recorded a loss of R5.7 billion in the last financial year, has seen freight volumes decline to 150 million metric tons in financial year 2022/23 from 226 million tons in the 2017/18.

In December last year the South African government, using tax payers money, handed Transnet a R47 billion bailout to help the state-owned rail and ports firm meet its immediate debt obligations. Transnet has struggled to provide adequate freight rail and port services in South Africa due to poor planning, corruption, failing equipment and maintenance backlogs.

Sasol Chemicals produces and sells more than 540 000 tonnes of ammonia annually. It is used to make a variety of fertilisers and industrial chemicals for the agriculture, mining, textile, and metalworking industries.

Sasol, who reported a 34% drop in profit this week, is the world as the world’s largest greenhouse gas point source emitter. Read more

Sasol says that despite some operational improvements in South Africa, persistent underperformance of the state-owned enterprises involved in Sasol’s value chain and the weaker global growth outlook continue to impact Sasol’s business performance. Revenue of R136,3 billion is lower than the prior period of R149,8 billion, mainly as a result of the lower chemical product prices across all regions. Earnings before interest and tax (EBIT) of R15,9 billion is R8,3 billion (34%) lower than the prior period. Read more

Author: Bryan Groenendaal

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