The crisis at Transnet has led to a backlog of containers to be offloaded. File Picture
Before writing this article, I had to go down memory lane to Thirtsy’s Dockside Tavern, which was closed in 2007. This was a famous restaurant around the Durban Point Waterfront where many Durban people and visitors, including many international guests, who enjoyed outdoor entertainment used to go to for breakfast and lunch with excellent sea views.
This was a famous restaurant area because people would sit outside, enjoying their very cold beers and other alcoholic beverages with light meals, while watching Transnet workers happily doing their work.
A Transnet boat would come carrying a Transnet Sea Pilot; who would be picked up by a Transnet helicopter to take him/ her to a vessel/ship which was next in line for being steered/manoeuvred into the Durban Port. It was fascinating to watch the manner in which this seemingly complicated process was being carried out by Transnet people.
Those were the good old days; unfortunately, that great place was closed down to make way for the expansion of the Durban harbour. During those days, one never saw so many ships and/or trucks spending days or weeks while waiting to offload cargo.
WHAT WENT WRONG?
The Transnet National Port Authority (TNPA) has recently been at pains to explain what went wrong or what is going wrong; even going to the extent of blaming the weather. The basic truth about the Transnet port challenges is that they are all man-made; many people have dropped the ball somewhere whether intentionally and/or unintentionally. It is for this reason that Transnet was one of the state-owned entities (SOEs) that attracted the prime findings of corruption at the Zondo Commission of Inquiry.
Let us look at some of the excuses advanced for these backlogs:
They say they have old-fashioned cranes and other loading or offloading equipment. That is a clear sign of management incompetence. The role of management is always to ensure the highest standards and highest levels of effectiveness and efficiencies of its operational, financial, human resources, and other resource management utilisation. This is even more pronounced because one would regularly see Transnet and Transnet National Port Authority top executives in different parts of the world purportedly there “for benchmarking visits”.
What is even worse with SOEs like Transnet and Eskom is that most of us find it so easy and very convenient to blame it solely on their very top management, though it is clear that not only is the fact that the fish rots from the head; it is equally clear that their workers are part of the major problem because of their regular “industrial action”, for whatever reasons, which have at times been responsible for further delays.
Because of all these delays, Transnet said it has a backlog of at least 70,000 containers, with at least three weeks’ waiting period for offloading; and it added that some of these backlogs may only be cleared as late as in February or March next year. What is worrying about these backlogs is that some of the goods stuck there also include goods which could have been sold during this week’s Black Friday retail extravaganza and some for the Christmas period. This means a major opportunity cost for the South African economy.
Some businesses have even resorted to flying their goods instead of shipping them; this means that there will be additional costs of doing business because of this, and this means the consumers will in turn face higher prices, which will in turn reduce the demand for such goods.
Furthermore, some businesses are now going to impose a Congestion Surcharge of about $210 per 20-foot (about R4,000 per 6m) equivalent container as from next month. This is also going to increase the cost of doing business, hence raising the final selling price, which will in turn lower the demand for those goods.
It is disappointing that Transnet seems not to appreciate how serious their problems are. The Minister of Finance, Enoch Godongwana, recently remarked that the National Treasury did not allocate any additional funds to the financially troubled Transnet because Transnet was “trying to negotiate with the National Treasury via the media”. Godongwana said that they expected Transnet to come to them and clearly explain, in detail, what they planned to do to turn around the fortunes of this SOE.
We would expect, under the circumstances, that Transnet would be going out of its way to ensure it gets all its ducks in a row to save Transnet from effectively collapsing. The outsourcing of the Durban Port operations to reputable foreign operators like the Phillipines-based multi-national port operator ICTSI can be one such turnaround strategy. Let’s not allow pure ideological disagreements from using the best strategies possible, especially because the Transnet constituencies who are opposed to such turnaround strategies are the very same people who have been part of the problem at Transnet.
*Prof. Dumisa is an independent economic analyst
**The views expressed do not necessarily reflect the views of Independent Media or IOL