Transnet group CEO Michelle Phillips says the State-owned rail, ports and pipeline logistics group is putting measures in place to ensure that it no longer over-pays for goods and services.

Speaking at the SAPICS 2026 conference held in Cape Town this week, she said recent reforms within the entity included rolling out a catalogue of market-pricing, so that “if a part is R1.50, and you put in R1 500, the system will not allow you to buy that”.

Addressing the supply chain industry body, she emphasised that the days of collusion and over-charging within Transnet were over.

“Transnet cannot afford to pay anything other than what the market pays.

“If a private company is paying R1.50, I will not be paying more than R1.50,” warned Phillips.

“It cannot be that because we are government, people think there is this big, black hole of money and that they can charge anything they want.

“We cannot pay 30%, 50%, in some cases a 1 000%, 3 000% more than what the market pays. It will come to an end.

“In the last week we have blacklisted seven companies because of that behaviour. We have dismissed a number of employees because of that behaviour. And there are more coming who will be blacklisted, and there will be more employees who will be dismissed.

“I will not do business if it is not clean business,” noted Phillips.

She said the additional costs associated with collusion and over-charging inevitably filtered down to ordinary South Africans in the prices they paid for goods.

It was also vital for Transnet to grow its competitiveness, especially given the entry of private participants into the logistics market.

Phillips was equally unhappy with middlemen.

“Some middlemen feel that we have to buy from them, although they are buying from [manufacturers] overseas. We are a transport and logistics company – I don’t need people to import on my behalf.

“How does that make sense? You import on my behalf and then you charge me an arm and a leg?”

“We can do that. What we need to do is get local manufacturing started in the country. The real challenge is to get these businesses started.”

Capex Programme and Rail Target
Phillips said Transnet had a capital expenditure (capex) programme of R129.1-billion for the next five years, with R116-billion to be allocated to initiatives aimed at maintaining reliability and protecting existing volumes.

“That is the size of the pie when it comes to capex. You can see the majority of that is sustaining capital. We would have liked that to be expansionary, but we’ve got too much to fix and that is where the money will go.”

Phillips also noted that Transnet Freight Rail (TFR) was currently 3.16-million tons behind its target of moving 180-million tons of goods this financial year.

She remained confident, however, that TFR would see an overall improvement this year compared with the 167.9-million tons of goods moved in the 2025/26 financial year.

R5bn Security Spend
Phillips also highlighted that Transnet had been forced to spend almost R5-billion a year on private security to “protect the network” from criminals stealing and vandalising cables and the rail track, for example.

She noted that Transnet in the last two years had also seen a sharp increase in instances of sabotage, rather than pure criminal behaviour, linked to its efforts to reform the State asset.