CEO calls for a new kind of ‘essential services’ – to stop strikers crippling South Africa

Big business has called for grassroots operations like Transnet to be considered essential services to prevent workers from crippling South African operations with strikes.

Transnet suffered heavy losses from a prolonged wage strike, with hundreds of millions, if not billions of rand lost every day.

The strike led by both the South African Transport and Allied Workers Union (Satawu) and the United National Transport Union (Untu) has reached its ninth day, shutting down critical import and export infrastructure.

More than 40,000 employees have fallen tools. Transnet proposed a general increase of around 4.5%. The unions, however, rejected the employer’s revised offer, noting that something better in line with consumer inflation at 7.6% would be preferable.

The Minerals Council of South Africa says mining companies are losing more than R800 million in export revenue every day the strike continues – similar effects are also weighing on South Africa’s agricultural sector which is heavily dependent export of products.

Compared to the same period last year, the losses already amount to 50 billion rand.

Research by the South African Association of Freight Forwarders (SAAFF) has shown that logistical delays in the supply chain are costing our economy between R100 million and R1 billion a day, but with ports now at the shutdown, more than R8 billion of goods every day are not being processed.

SAAFF CEO Dr. Juanita Maree said that when calculating the full economic cost, the final consequence of the devastating impact is far greater, Mavuso added.

Mavuso said it has become clear that with the Transnet strike this week – and the Eskom strike earlier this year which took the country to Stage 6 of load shedding in June – it is doubtful that the can be trusted to work as a social partner to promote the interests of the country.

“His actions show he is fully prepared to hold the economy to ransom as he demands clearly unaffordable and unrealistic wage increases,” Mavuso said. “Given the inertia in reforming the wider transport and rail systems, I also wonder if the government itself fully appreciates the urgency of the situation.”

The logistics sector needs to be fundamentally changed to allow private sector involvement in infrastructure assets, maintenance and movement of goods. BLSA believes this will strengthen Transnet’s revenue streams and sustainability, not weaken them.

Unfortunately, repeated offers from organized companies to help speed up this reform and various other reforms aimed at putting Transnet on a sounder operational and financial footing have been rebuffed.

Likewise, the government appears unable or unwilling to act against incidents of wanton sabotage of railway lines, including cable theft, which is clearly being carried out by organized criminal syndicates, Mavuso said.


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Michelle J. Kelley