Business Leadership SA CEO Busi Mavuso has criticised cash-strapped Transnet for capitulating to union strike threats and agreeing to above-inflation increases of 6% each year over a three-year period, saying this was economic blackmail as unions treated the state as an “endless ATM”.
The pay deal, she said, represented a failure of leadership on both sides: “Militant unions holding the country hostage with strike threats, and management caving to their demands without a fight”.
“While SA businesses slash costs and workers face retrenchments, Transnet workers will get pay rises that are double the inflation rate, funded by taxpayers already struggling to make ends meet. Inflation is running at 2.7% and the economy is expected to only grow 1.4% this year,” Mavuso said in her weekly newsletter.
“The news came days after National Treasury had agreed to give Transnet additional guarantees to enable it to manage its huge debt pile.
“In the private sector, the bleak economic outlook is leading to severe belt-tightening. Managers everywhere are having to find ways to save and try to hoard cash to be able to trade through tough conditions. Inevitably, some firms are going to fail, and workers will find themselves out of a job,” she said.
“Yet the unions threatened to bring the entire logistics network to a standstill unless their excessive demands were met, showing complete disregard for the economic factors that affect us all. It is even more shocking when you consider the role Transnet plays in perpetuating our economic predicament.
“Transnet’s poor performance has been a major contributor to our dismal growth outlook. Stellenbosch University professor Jan Havenga has estimated that Transnet costs the economy R1bn everyday thanks to its poor performance in moving goods around the country and out through our ports. That is equivalent to wiping out the entire annual budget of a midsize municipality every day. It equates to about 5% of GDP.”
Mavuso said the unions knew exactly what they were doing: “They understand that by threatening strikes at Transnet, they can hold the entire economy hostage. They know that the government will always cave rather than face the economic disruption of a logistics shutdown. This is economic blackmail, pure and simple, and taxpayers are footing the bill while the economy suffers.”
The government needed to find a way of confronting union militancy at state-owned enterprises, or else taxpayers would continue subsidising this “destructive cycle while our economy stagnates. The unions need to be called upon to contribute to solutions of rebuilding our economy rather than exacerbating its challenges”.
The Transnet wage deal follows the conclusion of a conciliation process by the Commission for Conciliation, Mediation and Arbitration (CCMA) last week.
Under the agreement members of the SA Transport and Allied Workers Union (Satawu) and the United National Transport Union (Untu) will receive increases of 6% each year from 2025 to 2028.
SA’s inflation rate edged up from March’s 2.7% to 2.8% in April.
“The above-inflation wage agreement represents a 18% wage increment over the three-year period. It includes increases to basic salary and related components, viz. 13th cheque, pension fund contribution, medical aid subsidy and housing allowance,” Transnet said in a statement.
“The finalisation of the three-year wage agreement provides labour stability and will enable the company to focus on its immediate strategic priorities of improving operational and financial performance, while positioning the organisation for future growth, thereby ensuring job security and economic growth.”
Transnet reported a R2.2bn loss for the six months ending September. Interest on Transnet’s R100bn debt consumes R1bn a month and economic pundits have said the company would require financial assistance from the state to fulfil its role as a crucial player in the economy and retain access to capital markets.
In May, Business Day reported that Transnet had obtained a further R51bn in government guarantees, which the state-owned rail and port operator said would enable it to refinance maturing debt and access cash, as well as improve and reform its operations.
The guarantee facility, which was approved by transport minister Barbara Creecy and finance minister Enoch Godongwana, added to the R47bn made available to Transnet in December 2023, most of which has now been used.
Untu spokesperson Atenkosi Plaatjie said
“ This salary increase agreement reflects the power of collective bargaining in improving the working conditions of the working class. The three-year agreement also ensures much-needed labour stability during a critical period as Transnet works to rebuild its operations, restore service reliability, and regain stakeholder confidence,” Plaatjie said.
In May, Satawu and Transnet signed a wage deal for the union’s members to receive increases of 6% in the first and second years and 5.5% in the final year of the agreement.
Update: June 17 2025
This article has been updated with new information from the Business Leadership SA.
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