An aerial shot of the Port of Cape Town. During a visit to the port last week President Cyril Ramaphosa announced the establishment of the Transnet National Ports Authority as an independent subsidiary of Transnet, in line with the National Ports Act of 2005. Picture: Ian Landsberg African News Agency (ANA)
An aerial shot of the Port of Cape Town. During a visit to the port last week President Cyril Ramaphosa announced the establishment of the Transnet National Ports Authority as an independent subsidiary of Transnet, in line with the National Ports Act of 2005. Picture: Ian Landsberg African News Agency (ANA)

Experts and unions have mixed reactions to Transnet's planned changes

By Vernon Mchunu Time of article published Jun 29, 2021

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DURBAN - A MIXTURE of views continued to flow in this week amid the planned structural changes at Transnet, with an economist and a shipping expert hailing proposals as key to improving efficiencies while angry unions fear for job losses.

Citing previous similar experiences, two unions within the Transnet operating environment have slammed the announcement of a two-pronged reconfiguration plan for the state-owned entity, which has been announced by President Cyril Ramaphosa.

Transnet National Ports Authority (TNPA) would no longer remain a division within the parent Transnet, but would be turned into an independent subsidiary with its own board, said Ramaphosa, who made the announcement during a visit to the Port of Cape Town last week.

In addition, private businesses are to be roped-in to enter into a partnership with Transnet’s other division, the Transnet National Ports Terminals (TNPT), a move Ramaphosa said would help improve the efficiency of the ports’ operations.

“The establishment of a new subsidiary will separate the roles of the TNPA as the owner of the ports infrastructure and TNPT as the terminal operator. This reform will enable the reinvestment of port revenues in port infrastructure and will ensure that the terminal operators are treated fairly and equally, enabling greater private sector participation in terminal operations,” said Ramaphosa.

Flanked by Transport Minister Fikile Mbalula and Public Enterprises Minister Pravin Gordhan, Ramaphosa said the measures were being implemented as part of the government’s broader strategy to enhance the performance of the ports and invest in the expansion and upgrading of ports infrastructure.

Singling out Gordhan for a stinging attack, United National Transport Union (Untu)’s general secretary Steve Harris and the general secretary of the South African Transport and Allied Workers Union (Satawu) Jack Mazibuko said the minister had misled organised labour on the issue.

“The unions are furious with Gordhan’s misleading statement that ‘two unions’ have welcomed the decision. Whoever the minister talked to, they were certainly not representing the 3 135 employees,” the two said in a joint statement.

They did not believe the government’s sudden decision to implement the National Ports Act of 2005 (in terms of which the changes are based) is in the best interest of South Africa, Transnet itself or its employees.

“The government ignored the unions representing Transnet employ

ees when the act was crafted 15 years ago and has done so again. For the past 15 years Untu and Satawu were given the assurance by numerous stakeholders, including the various former ministers of public enterprises and former chief executives of Transnet that this act would never be implemented.

“The government tried a similar exercise with Transwerk, a former division of Transnet, in 1999, and it resulted in job losses. Transnet is already pleading poverty, yet will have to carry the cost of an additional board,” said Harris.

Mazibuko said that “irrespective of whether the president says this new process will create jobs, what this means is those jobs will not be sustainable”.

“The process will create temporary jobs but it will take away the key role that the state must play in its own institutions. If you look at the involvement of the private sector, to start with, it’s for them to make profit and then after that they will leave the SOE in tatters,” he said.

“It’s not the first time this kind of process is taking place. Within Transnet, there used to be an entity called PX Containers. That entity was privatised and today it does not exist. Going forward, we are engaging the president, because there was never proper consultation between labour and the SOE,” said Mazibuko.

He threatened that should organised labour receive no assurance about job security, the process would be derailed through Section 77 of the Labour Relations Act, which allows workers to go on a protected strike.

Master mariner and shipping expert Malcolm Hartwell, of Norton Rose Fulbright South Africa, hailed the move, saying its effect included that TNPA’s income and expenditure would be independent from that of the rest of Transnet.

“It has generally been accepted that the government’s delay in complying with its obligations under the National Ports Act is because TNPA’s income has been used to cross-subsidise other divisions in Transnet which were and remain unprofitable,” he said.

“Port users and consumers have accordingly been subsidising unprofitable divisions in Transnet.

“This, in part, has been the reason why South Africa’s port fees have become among the most expensive in the world and this has contributed to their decline in the global port rankings,” Hartwell added.

“This establishment of TNPA as a separate corporate entity will only come into effect once the necessary legislation has been promulgated and made its ways through Parliament. Given the current status of Parliament’s legislative programme, it is not clear when this will be.

“Once effect has been given to the President’s announcement, the ports’ tariffs will hopefully be reduced to assist in making South Africa’s ports more competitive again and reverse the move of sub-Saharan African cargo to our neighbours such as Namibia and Mozambique, who have taken advantage of this situation,” he added.

Professor Irrshad Kaseeram, an economist at the University of Zululand, said: “Considering the bigger picture where SOEs need to become globally competitive, these changes are necessary.”

“Yes, in the short term, some superfluous workers will lose their jobs. In an efficient high growth economy these retrenched workers will quickly find new placements. It’s critical that our firms and SOEs become efficient productive operations.”

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THE MERCURY

An aerial shot of the Port of Cape Town. During a visit to the port last week President Cyril Ramaphosa announced the establishment of the Transnet National Ports Authority as an independent subsidiary of Transnet, in line with the National Ports Act of 2005. Picture: Ian Landsberg African News Agency (ANA)

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