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National Logistics Crisis Committee to tackle transport emergencies in parallel to reform agenda

National Logistics Crisis Committee to tackle transport emergencies in parallel to reform agenda

Photo by Creamer Media

13th June 2023

By: Terence Creamer

Creamer Media Editor

     

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The National Logistics Crisis Committee (NLCC) will adopt a two-pronged approach to addressing the rail, port and road crises currently undermining growth and job creation in South Africa, whereby several urgent interventions will be pursued in parallel to a reform agenda with longer-term implications, including the opening of rail and port networks to private operators.

The Presidency’s project management office head Rudi Dicks tells Engineering News that government and business have already agreed to jointly support the workstreams that will be formed under the NLCC, the final terms of reference for which are likely to be signed off later this week.

Business has also agreed in principle that a portion of the R100-million Resource Mobilisation Fund, created to finance the injection of private-sector expertise into the National Energy Crisis Committee (Necom), can also be used to support the NLCC.

In addition, former Exxaro Resources CEO Mxolisi Mgojo and Toyota South Africa CEO Andrew Kirby will serve as CEO-level representatives on the NLCC, supported at a technical level by Business Unity South Africa deputy chairperson Khulekani Mathe and Integrated Supply Chains executive consultant Ian Bird.

Government is still in the process of finalising its representatives, but Dicks reports that key Ministers, including Enoch Godongwana, Khumbudzo Ntshavheni, Sindisiwe Chikunga and Pravin Gordhan, will participate and will be supported at a technical level by either directors-general or deputy directors-general.

Likewise, Transnet will be expected to direct senior executives to participate in the workstreams, as has been the case with Eskom executives within Necom.

Operation Vulindlela will play the role of secretariat and several of the transport-related reforms that it is pursuing will be folded into the work of the NLCC. The secretariat will continue to draw in technical support from specialists such as Jan Havenga, Sarah Truen and Jaap van der Merwe.

The NLCC will be chaired by President Cyril Ramaphosa, who will meet with the structure every six weeks.

Dicks reports that a workstream will be created specifically to address several urgent problems across the logistics sector, with a particular focus on key corridors handling commodities such as coal and iron-ore, as well as containers.

Volume recovery targets have not yet been finalised, but these are likely to be central, given Havenga’s estimate, as reported by News24, that South Africa’s logistics crisis may have lopped as much as 6.68% off of the country’s gross domestic product last year.

There will also be an intervention to combat ongoing cable theft, as well as serious maintenance and spares backlogs across Transnet’s port and rail systems, including the problem of long-standing locomotives that has arisen as a result of a contractual impasse between Transnet and CRRC, of China.

In addition, the congestion that has developed along key road corridors, such as the N2, N3 and the N4, as well as at certain land borders will receive dedicated attention, with the NLCC aiming to draw in all the public sector departments and agencies responsible for border management.

Particular priority will be given to the extreme delays that have developed at the Lebombo border crossing at Komatipoort, as a result of a combination of increased road haulier volumes to offset the degeneration in the rail service, as well as technical problems at the border itself.

The steep decline in Passenger Rail Agency of South Africa volumes will also receive urgent attention, but Dicks says any devolution of responsibility for passenger rail to metropolitan councils is likely to form part of a more medium-term reform process.

Workstreams will also be established to address ongoing procurement problems at Transnet, as well as the reforms required to support greater private sector participation across the rail and harbour networks.

Dicks insists that government will take the lead in the workstream on private sector participation so as to avoid any potential conflict of interest that could arise given the interest that certain businesses have expressed in the opportunities that are likely to arise.

“It’s vital that we manage these kinds of risk so that this initiative is not perceived as a form of ‘capture’,” Dicks says, arguing that a level of protection is provided by the fact that government is engaging with business through organised formations rather than individual companies.

He argues that, through Necom and other Operation Vulindlela projects, including work on the new visa regime, private sector expertise have been drawn in without allowing business to dictate policy direction.

“But we still have to manage this very carefully, including by being as transparent as possible.”

Dicks also stresses that there is no intention to use Necom or the NLCC to “co-manage” the State-owned enterprises or to create parallel boards or executive structures.

“We are there to offer specific support, for specific interventions aimed at addressing particular challenges.”

Edited by Creamer Media Reporter

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