Showdown looms in the ANC corral

An analysis of the Transnet financial accounts provides gloomy reading, says NICK PORÉE, who believes that the prospects for transport in South Africa look equally dismal.

The recent publication of the Transnet financial accounts has revealed that the entity has incurred significant further losses in the past year totalling about R5 billion, despite the innovative accounting which revalued the outdated, deteriorated, and often unusable assets. The process echoes the issues at Eskom, where every attempt is being made to recover from the long-term neglect and deterioration of about 14 over-aged power stations.

ANC AND BEE ENTER THE FRAY

The fundamental problems are caused by the 30-year socialist experiment, which is the Authorised Nepotism and Corruption (ANC) policy based on Black Elite Enrichment (BEE) principles. The decision to clear the civil service and state-owned companies (SOCs) by replacing them with untrained cadres is now bearing the anticipated sour grapes.

The current situation highlights the fact that if you employ incompetent or dishonest executives and then manage them with a committee (Soviet) system you eliminate accountability and leave the workers at the mercy of the incompetent management. The ironic result is that the unions which supported the government as “owners” of the SOCs are now planning to shut down the economy instead of firing the management: an exercise in futility, and a direct challenge to re-establish effective parliamentary control of economic policy.

In private sector terms, when a business has been devastated by bad decisions, theft, and corruption, there are legal and personal consequences for the senior management. In the case of the SOCs, these are the ministers in charge. The issue is politicised by the fact that the current management of SOCs and administrations are all cadres of a political party. The underlying economic truths are that the lies and promises of entitlement, and everything for “mahala” in the new Rainbow Nation, were always going to crash at some time. Unionisation and BEE are effectively administrative manipulation to eliminate competition in the labour market. The union process is designed to control the actions of their management to ensure the best remuneration for members.

EMPLOYEES DECREASE BUT WAGES INCREASE?

Analysis of the Transnet financials shows decreasing employee numbers but escalating wage levels despite the growing unemployment in the country. The effect of the government support for unionisation spills over into the private sector via the National Economic Development and Labour Council (NEDLAC), so that wherever possible, businesses are mechanising, investing in automation and robotics, reducing staff, dropping labour-intensive production lines, and importing cheaper products or just shutting down.

As the nation grimly tries to keep the economy and social systems working by paying for the increased costs of fuel, food, healthcare, security, fixing infrastructure, and providing its own services and transport, the government continues to play the same behind-the-scenes SOC capital investment games in its Ivory Tower. The current attempts at attracting private sector investment in ports, railways, and power generation are all being defined and negotiated in attempts to retain centralist control of the processes and facilitate the usual off-takes for the well-connected.

If these deals are allowed to continue without adequate parliamentary oversight, we will join the list of developing countries with minimal control of their futures due to government commitments which encumber their economies with long-term debt. Comparisons of South Africa’s debt situation with other countries must factor in the reality of future production decreases under the present policies and systems with no signs of change.

UNREALISTIC PORT PLANNING

The current planning for the Port of Durban by the Transnet National Ports Authority (TNPA) is totally unrealistic and inimical to the future of the city. It also makes assumptions that the port can expand without the supporting access capacity and spatial development for the private sector logistics industries necessary to handle import-export freight.

The assumption that the TNPA has the ability to plan for the entire logistics future of Durban and Richards Bay ports and cities is fraught with the potential for disaster. The port management actions of the past 20 years and current planning show evidence of a lack of professional understanding of modern international logistics and the need for integrated planning.

The proposed reorganisation of border management faces the same problems. The private sector logistics industry watches helplessly as regional business moves to other corridors and ports, and shipping lines reorganise their schedules. Businesses affected by the collapse of railway services watch their international markets eroding due to an inability to offer reliable and competitive supply chains.

The recent government announcement of a R50 million road pothole repair programme is welcome, but hopelessly inadequate to restore the road system to a safe and usable condition. Potholing is the most expensive way to address inadequate maintenance so it is to be hoped that the current South African National Roads Agency (SANRAL) plans for the “Future of South African Road Transport” will produce a realistic set of national and provincial plans for a sustainable system. This is critical: without a dramatic change of policy the capacity for railway logistics will continue to decline, increasing the current dependence on road freight for breakbulk and bulk haulage.