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Ramaphosa talks tough over Transnet incompetence as ports nightmare rages on

President Cyril Ramaphosa

President Cyril Ramaphosa

24th November 2023

By: News24Wire

  

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President Cyril Ramaphosa vowed that Transnet would shed itself of incompetence and address the major backlogs at the country's ports.

If not, it could see the economy continue to bleed.

On Thursday, the president visited the port of Richards Bay after Transnet said it was considering blocking trucks from delivering cargo to the port due to a "logistics nightmare" caused by hundreds of coal trucks snarling up the road into town. 

The Road Freight Association slammed the plan as "completely crazy".

Richards Bay is far from the only port facing severe difficulties.

According to the South African Association of Freight Forwarders (SAAFF), Transnet inefficiencies at the country's ports were costing the economy R98-million a day in direct, sunken costs and at least R26-million a day in indirect costs.

Port chaos was impeding at least R7-billion worth of goods from moving every day.

Around 71 000 containers are stuck on ships outside the port of Durban, a backlog which port officials say they will only be able to clear by next year.

In an address to reporters, Ramaphosa expressed confidence in Public Enterprises Minister Pravin Gordhan and Transnet executives' ability to resolve issues contributing to the slow movement of goods at the ports.

"In a while, we are going to get rid of the backlog," he said.

The president admitted there had been a lack of maintenance of Transnet infrastructure, and that the state-owned entity had failed to maintain a close relationship with its customers.

Ramaphosa said that he was, however, optimistic that a positive change would take place following an internal diagnostic process by Transnet.

"The plans that we have for this precinct are plans of high quality, there's going to be a lot of investment, up to R160-billion.

"I've made it clear to Transnet that I want all the problems solved by next year. By the end of the first month [next year], we must see some improvement," he said.

"The incompetence and lack of action that we have seen here must be a matter that is dealt with immediate effect."

The president also vowed that heads would roll, adding, "Consequence management is going to be the order of the day, accountability is going to be at the top of the issues that we are going to deal with and now, we are involved in a process where we are looking at the capabilities of the people who are working at our state-owned enterprise."

SAAFF commended some of the plans recently announced by Transnet to address congestion and other issues, including the sourcing of second-hand cargo-handling equipment from customers as a temporary measure.

SAAFF director Mike Walwyn, however, told News24 they still had some concerns.

"While there were encouraging signs from Transnet over the past week, there are still no concrete plans or timelines for rehabilitation of the rail service to Richards Bay," he said.

Walwyn said they were also asking questions about how Transnet, which is about R100-billion in debt, would afford to buy second-hand equipment "given Treasury's reluctance to provide any further funds to Transnet".

Business Unity SA had already urged Transnet to resolve the crisis at the ports or the economy would continue to bleed.

"The current state of these ports indicates a substantial gap between their current operational performance and the desired benchmarks in multiple critical aspects of maritime logistics, often referred to as demonstrated capacity," it wrote in its Cargo Movement Report.

"Transnet must improve its performance or the SA economy will continue to bleed unnecessarily. Nevertheless, as we have often mentioned, logistics take place on a shared infrastructure with shared responsibility by all parties. It is not only Transnet that must improve its performance, but indeed all role-players operating within the extended logistics network."

While retailers have said their stock for Black Friday and the festive season are unlikely to be affected severely, Mr Price warned persistent instability at SA's ports could impact autumn fashion lines. This echoed a similar warning earlier in the week by clothing retailer Truworths.

Umhlathuze municipality

Meanwhile, the City of Umhlathuze, which includes Richards Bay port, vowed to continue with its plans of legal action against Transnet over the high volume of trucks causing traffic jams on local roads. 

The mayor, Xolani Ngwezi, said a meeting was held with Gordhan and Transnet on Wednesday, ahead of Ramaphosa's visit.

Ngwezi told News24 the minister sought to persuade the municipality against litigating Transnet, but they had maintained their position.

"We've been raising concerns over the high volumes of traffic, damage to infrastructure, lack of maintenance of the railway system, and environmental issues for two years, but Transnet has failed to respond to our satisfaction," he said.

He said, so far, Umhlathuze had issued a letter of demand, in which they had requested "tangible plans" from Transnet to address congestion, local infrastructure damage, environmental concerns and neglect of the local railway system, among other issues.

Ngwezi said Transnet had made several offers, including assistance with overtime payments to traffic officials, who manned the congested roads to the ports.

He said, however, they wanted Transnet to submit all their plans on paper.

"We want Transnet to give us plans that can be monitored and enforced by the courts," he said.

Transnet did not respond to News24's query on the matter. Its response will be added once received.

Gordhan's spokesperson, Ellis Mnyandu, said, "A technical committee has been established by Transnet and the municipality to work at issues affecting the port."

He would not be drawn to respond to queries about the committee, its history and mandate, as well as other queries about Gordhan's meeting with Transnet and the City of Umhlathuze.

At the same time, Ngwezi said they were aware that Ramaphosa had visited Transnet offices on Thursday.

"We don't know what he said because none of our officials were with him during the visit," he said.

"We were told the day before his arrival and his visit clashed with our monthly council meeting," said Ngwezi. 

Edited by News24Wire

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