Melanie Veness, CEO of the Pietermaritzburg & Midlands Chamber of Business and chair of the Association of South African Chambers (Asac), which represents all the major business chambers in the country, has told public enterprises minister Pravin Gordhan the Transnet crisis is “absolutely untenable” because of “poor leadership and no accountability”.
“Under this leadership Transnet have reported a R5.7bn loss, which is nothing compared to the R1bn a day we lose because of their inefficiencies”, she says.
“That cost to the economy is absolutely unacceptable in the context of where South Africa is right now in terms of our growth rate and unemployment level. It's a catastrophe that must be dealt with.”
The failure to get key freight rail corridors fully functional and fix “very basic equipment needs” at Durban port is “just mind blowing”, she says.
Bringing in more capable leaders from the private sector if necessary could immediately make a big operational difference, she believes. And there’s no time to waste.
“If you don't have an efficient working logistics sector how on earth do South African businesses compete internationally?”
The problems are more about leadership than policy, she says.
“The leadership obviously have political heads they report to but in their position you'd think that engaging with stakeholders would be very important. Listening to what their needs are, listening to possible solutions they can bring to the table. Not just ignoring all of that.
“The port-users are experienced, they use ports all over the world. You've got to collaborate, South Africa loses if you don't. This is about leadership.”
She gives the example of "a massive amount of money" that was spent on generators for Durban port that lie unused because no environmental assessment has been done. “They’re not necessary, and we don’t have straddle carriers [used to load and unload ships], which are. At a basic level this is a leadership problem.
The daily loss incurred by the economy due to Transnet’s inefficiencies.
— IN NUMBERS: R1bn
Does she have any faith in the national logistics crisis committee set up by the government?
“It's difficult to say. We're very good at putting committees together. There's a lot time spent talking, but what we want to see is action on the ground. For this you need people with the required capability to be put into positions where they can deliver what the business community needs.
“We need decent, accountable leadership, we want to see improvements day by day. Every day that goes by without improvements is a R1bn loss to the economy. How do you sustain that? It's not time for another talk-shop right now. Get off the ground and sort out this mess, it's really not that hard.”
It's “unfair” to say yet if business, by participating in the committee, is being played by the government for its own political ends.
“Business does have to be part of any solution, we have to be at the table. But what I want to see coming out of that committee are commitments, timelines and urgency: 'This is what we've done so far, this is where we are headed, this is our plan.' We want to see action, something actually being delivered.
“For this you need capable leadership. If you're handling 60% of South Africa's container traffic and the World Bank does a study and tells you that you're 364th out of 370 ports, that speaks for itself.”
Transnet is bringing in an international partner to run its flagship Durban container terminal, but she says her feedback is that the section being outsourced is one of the few that's currently profitable.
The “problem areas” that really should be privatised are not covered by the deal.
Gordhan says he's sent a team to assess the situation ahead of meeting Asac, so he can understand where the problems lie.
She finds it alarming that the minister and his team “don't already know all this stuff, but that's par for the course”.
He's also told them to wait for the new board's turnaround plan, which he's instructed it to deliver in October. “We're almost in October. I'm adding up R1bn a day and thinking they jolly well better get a move on because we don't have the luxury of any more delaying,” she says.
“Why, given Transnet's appalling performance and massive losses is he only looking for a turnaround plan now? That's just not good enough.”
Things are failing all around us, making the environment unconducive for us to operate in and be able to compete
— Asac chair Melanie Veness
She refers to a 2005 turnaround plan the government requested from international consultants “that spoke about the private sector owning the rolling stock et cetera”, that's been sitting in a drawer ever since.
“Why didn't he just get that out? It turns out it was very good advice. At every level of government we're always getting plans. We don't have a problem with plans, it's implementation we have a problem with.”
She says the 8,000 businesses Asac represents are losing patience with plans that don’t produce results. What they need now is action.
"For many years business has been placated by the talk of another turnaround plan, but we’ve come to the end of that road. I don’t think there’ll be any more placating. The chickens are all coming home to roost. Things are failing all around us, making the environment unconducive for us to operate in and be able to compete. We have to agitate very loudly for changes to happen right now.”
Asac’s message to the minister when they meet will be: “We've run out of road, minister, we need implementation that starts tomorrow, dealing first with the equipment we need to run a port.
“If Transnet doesn't have the money let's have a private sector solution. There's lots of people from the private sector that want to step up, that would fund the installation of equipment and systems.
“We want to see urgency, we need an openness from government to finding solutions collectively. We want timelines and deadlines.”
If these are not met?
“There are options I'm not ready to discuss now, but we've reached a stage where there are a lot of roleplayers that can come together. Getting a proper service from government is not an option. We've reached a stage where the government has got to deliver.”
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