Cosatu, the trade union federation and key ANC alliance partner, said on Wednesday it rejects the unbundling of state-owned freight transport and logistics company Transnet.
The union, which backed Cyril Ramaphosa’s campaign for the ANC presidency, has in recent times questioned his economic reforms, saying workers are never consulted. The union is also at odds with the Ramaphosa administration over moves by the state to slash the runaway public sector wage bill.
“The federation demands a moratorium on the decision to unbundle Transnet and for more honest and proper engagements to take place to discuss the future of SOEs [state owned enterprises],” said Cosatu spokesperson Sizwe Pamla.
He said the decision on Transnet will have serious consequences for workers “because if this new entity is declared an essential service, their right to strike will be curtailed”.
“The federation views this decision [unbundling] with suspicion and scepticism because it is not in line with the vision of the alliance and the ANC manifesto. This new method of unbundling SOEs has not been properly canvassed with relevant stakeholders and is at odds with the commitment to a developmental, interventionist state,” Pamla said.
He said the federation was deeply disturbed because “this decision was unilaterally taken without broad and comprehensive consultation of stakeholders and unions in particular”.
“It has become a habit for this administration to clandestinely take drastic decisions about state-owned companies without engaging unions or other social partners. The privatisation of SA Airways and this dismantlement and fragmentation of Transnet have been decided without unions being properly engaged. This follows in the footsteps of massive retrenchments at SABC that took place despite strong objections from labour,” Pamla said.
He said the situation raises the question of whose vision is being pursued by the unilateral decisions and “where does this mandate come from considering that even at a political level, there has not been any discussions about these decisions”.
On Tuesday, Ramaphosa announced the unbundling of Transnet in a move meant to boost the functioning of SA’s ports which have been hampered by inefficiencies and ageing infrastructure in recent years.
SA’s ports including Cape Town — which is strategically located on one of the busiest international shipping routes and is particularly important for the export of fresh fruit and wine — have been hard hit by operational issues which have delayed the processing of cargo, threatening trade and leaving exporters and importers frustrated. International trade represents about 59% of SA’s GDP, with the country shipping close to R2-trillion of goods in 2019.
A report released by the World Bank in May ranked SA ports among some of the worst performing in the world.
The unbundling of Transnet will see the establishment of the Transnet National Ports Authority as an independent subsidiary of the state-owned freight transport and logistics company; with a separate board appointed by the minister of public enterprises. An interim board will be appointed by June 30 to oversee the establishment of the new subsidiary, “ensuring that this process is concluded as quickly as possible”, Ramaphosa said.
In particular, the unbundling will mean that revenues generated by SA’s eight commercial ports can be invested in port infrastructure, both for the replacement of old equipment and for upgrading and expansion projects.
Ramaphosa has been pushing for the faster implementation of structural reforms to reignite SA’s sputtering economy. As part of efforts to address the crippling energy crisis amid Eskom failures, Ramaphosa announced early in June that the threshold for companies to produce their own electricity without a licence would be increased 10-fold to 100MW.
Ramaphosa said together with the restructuring of Eskom, which is being split into three separate entities, the unbundling of Transnet is part of ongoing efforts to reposition and transform state-owned enterprises so they can be profitable, sustainable, competitive and play a developmental role in the economy.
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