The strike by employees at Transnet’s port and rail operations is going to cost the economy billions of rands and will likely set back the country’s efforts to drive a recovery, says business organisation Business Leadership South Africa (BLSA) CEO Busi Mavuso.
Some Transnet employees have downed tools in a dispute over wage increases.
Mavuso describes the strike as an act of economic sabotage that will damage government revenue, robbing it of the resources needed to provide poverty relief.
Industry body the Steel and Engineering Industries Federation of Southern Africa (Seifsa) states that the South African economy is already on its knees.
"Our economy is under siege as it battles a jobs, growth and hunger crisis. A devastating 63.9% of South Africans under the age of 24 are unemployed, consumer inflation is at a 13-year high and one-in-four people live below the food poverty line.
"A full-blown strike at Transnet will add to the damage suffered by the South African economy. This will be as bad as load-shedding in terms of economic impact. For an economy battling to maintain momentum, this could well be the final nail in the coffin," Seifsa CEO Lucio Trentini says.
The strike has forced Transnet to suspend all activity in its ports, snarling up imports and exports for the whole country. Miners and many other companies are losing billions while this goes on, with early estimates putting the costs at R6-billion a day, Mavuso states.
The unions have said the strike is indefinite and 15 000 workers are not going to be working today. All ports and freight rail are not expected to operate, she adds.
"This is disastrous not only to obvious sectors linked to direct imports like the medical sector, and exports, like the mining sector, but to the entire, interconnected economy. It further damages South Africa’s brand, with global cargo operators likely already moving on to other ports and further deprioritising South Africa. This is very bad news indeed," Mavuso asserts.
"The decision by United National Transport Union (Untu) and the South African Transport and Allied Workers' Union (Satawu), to go on strike last week, in the middle of negotiations that were ongoing at the Commission for Conciliation, Mediation and Arbitration (CCMA), is another severe blow to the economy.
“The strike is, at the very least, an act of bad faith, given that negotiations were under way at the time and several court cases are testing its legality. It caught both Transnet and government off guard," she adds.
Seifsa has appealed for a constructive approach that seeks to advance the interests of the country.
"Transnet, as with Eskom, is crucial to the country’s economy. Transnet’s rail and port facilities are key to exporting the country’s bulk commodity exports such as coal, iron-ore, chrome and manganese. A full-blown strike at Transnet, which seems unavoidable, will have a serious effect on the economy, as it will halt exports and put thousands of jobs on the line," Trentini notes.
Exporters rely heavily on efficient rail networks and ports, but Transnet has been operating below capacity for years as it grapples with a shortage of locomotives, cable theft, vandalism, poor maintenance and outdated and slow port infrastructure. This substandard service has had a significant impact on the local steel industry and its ability to manufacture steel to meet its customers’ demands.
In some instances, primary steel producers have had to shut down operating plants due to the unavailability of raw materials, at great cost to their businesses and the economy, states Seifsa.
"We know that it will not be easy to make compromises, but we appeal nevertheless for a win-win approach to the negotiations, as opposed to a winner-takes-all approach. Our plea to all the negotiators, and to those from whom they obtain their mandates, is that you rise above your narrow interests and put the interests of the South African economy first, and look to settle quickly," Trentini says...
