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Open Letter on Transnet’s impasse and its debilitating impact on local economy

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Dear MyPE

The following letter was sent to the persons named herein: Chairman of Transnet, Mr Popo Molefe, Honourable President, Mr Cyril Ramaphosa, Minister of Public Enterprises, Mr Pravin Gordhan, Minister of Trade and Industry, Mr Ebrahim Patel, Eastern Cape Premier, Mr Oscar Mabuyane, Acting Group CEO of Transnet, Mr Mohammed Mahomedy.

The Nelson Mandela Bay Business Chamber (NMBBC) has been consistent in positioning itself as one of the leading catalysts for economic development in Nelson Mandela Bay. To achieve this, it influences the factors and key stakeholders that create a competitive and enabling local business environment. The NMBBC represents the interests of local businesses who employ over 120 000 employees.

Transnet National Ports Authority (TNPA) and Transnet Port Terminals (TPT), as our members, are strategic economic drivers in the region and major contributors in the area of job creation. Over the years, we have watched keenly the work Transnet has done in the Nelson Mandela Bay Metropolitan (NMBM) region. NMBBC is encouraged by some of the successes in the last 10 years, most notably the Port of Ngqura. Its strategic location has ably anchored a number of key industries including the automotive, citrus and manufacturing sectors which account for the region’s core exports.

It is against this background that the NMBBC expresses its deep concerns about the current impasse at the Port of Ngqura and Port of Port Elizabeth (PoPE) where exporting activities have literally ground to a halt due to the ongoing go-slow by TPT employees. The NMBBC is thus concerned by the debilitating impact that this impasse has on the local economy as it has a potential of retarding the city’s economic growth trajectory – this is a region that desperately needs economic development as it is located in one of the poorest provinces in South Africa. More concerning is that the prolonged go-slow could potentially depress South Africa’s manufacturing export figures and ultimately the GDP number for 2019. Additionally, it pauses reputational damage to companies that have an export footprint and face stiff international competition.

In the automotive sector, one big manufacturer stands to lose an estimated R15-million worth of production per day due to down time. When extrapolated to sector level the numbers are estimated at R42 million losses per day which is catastrophic. This is creating a ripple effect for the company as they will be forced to implement costly triple shifts for its thousands of workers to regain lost ground. The down time has forced these companies to send staff home and this translates to huge loses in income and wages.

The citrus industry has also been badly affected as they have not been able to transport their perishable goods, putting their international reputation and market share at risk. There are reliable estimates that the go-slow is costing the region’s citrus exporting industry between R50-100 million per week.

We note that the go-slow action started on 28 June 2019 and thus far no concrete solutions have been communicated by Transnet. We are unsure if Transnet is following the correct legal dispute resolution mechanism to urgently address the matter.

It is doubtful that some of these companies and sectors will be able to recover from these losses in a Metro with the highest unemployment rate in the country.

The go-slow has contributed to reduced productivity. Furthermore, loss of productivity as shown by the reduced throughput levels (i.e. 10 containers per hour as opposed to capacity of 60 containers per hour) at both Ports, due to lack of maintenance of the cranes and associated equipment is of great concern.

In light of this, we request an urgent intervention by all relevant stakeholders and a faster resolution from Transnet to put an end to this drawn-out matter so that normalised operations can resume as soon as possible.

Yours sincerely

Dr Andrew Muir
NMBBC President

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Port Elizabethan

This author is a 'catch-all' for occasional articles and letters written to MyPE. The Author of each article can be found in the signature at the bottom of each individual article.