Transnet to invest $8 billion in 5-year turnaround plan

Transnet, South Africa’s state-owned freight and logistics company, will spend more than R129 billion ($7.81 billion) over the next five years to restore its financial sustainability and rebuild market credibility, according to Group Chief Executive Officer Michelle Phillips.

Speaking at the 48th annual SAPICS Conference in Cape Town on July 20, 2026, Phillips told more than 500 supply chain professionals that the company’s turnaround strategy is already tackling long-standing rail bottlenecks and port inefficiencies that have weighed on economic activity.

Reinvent for Growth strategy gains traction

At the center of Transnet’s recovery is its “Reinvent for Growth” (R4G) programme, structured around three pillars: “Fix and Optimise,” “Transform,” and “Grow.” The initiative is focused on restoring freight volumes, renewing critical equipment, redesigning institutional frameworks, and expanding private sector participation.

Phillips noted that Transnet Freight Rail volumes are projected to grow by approximately 4.7% between the 2026/27 and 2027/28 financial years, signaling early signs of operational recovery after years of decline.

Procurement overhaul drives savings

A major component of the turnaround effort is a comprehensive overhaul of procurement systems. Transnet is shifting from fragmented, transactional processes to a centralized, digitally enabled procurement model with stronger governance controls.

The shift to a centralized, digitally enabled procurement model with stronger governance controls has already delivered measurable results, including a 50% reduction in irregular expenditure, a 75% cut in procurement turnaround times, a 78% decline in operational cycle times, more than 10% in direct cost savings through strategic sourcing, and total realized savings exceeding R2 billion ($121.05 million), with Phillips noting that these improvements are helping to restore financial discipline while enhancing efficiency across the organization. 

Private partnerships support recovery

Transnet also reported stabilizing freight rail volumes following years of structural decline, alongside improving container throughput at key ports due to accelerated equipment upgrades. Phillips emphasized that strengthening supply chain systems within Transnet is essential to broader economic recovery in South Africa, given the company’s central role in trade and logistics.

“Transnet’s recovery is South Africa’s growth,” she said. “The strategy is working, the recovery is real, and the future is sustainable.”

The SAPICS Conference, which runs until July 22, 2026, also marks the 60th anniversary of the supply chain industry body, under the theme “Legacy to Leadership: 60 Years of Connection, Collaboration and Transformation.”