Transnet’s Derby sets scene for protracted port strike as firm can’t afford wage demands

DURBAN, SOUTH AFRICA - OCTOBER 12: General view during Transnet Strike continued by unions Satawu and Untu at CCMA on October 12, 2022 in Durban, South Africa. The two unions representing Transnet workers say they are continuing with their strike despite a new wage increase offer on the table. (Photo by Gallo Images/Darren Stewart)

PORTIA Derby, CEO of Transnet, has said the state-owned freight and logistics company cannot afford to yield to union demands for a 7% minimum pay lift setting the scene for a protracted rail and ports strike, now in its eighth day.

In a report by BusinessLive, Derby is quoted at an AgriSA annual conference on Thursday as saying: “I know some people feel this is a strike that we should pay whatever is required. But the truth is we have a responsibility to turn around Transnet and leave a strong, sustainable company on the other side of the divide.

It is not sustainable to have about 66% of your operating cost being labour costs.” The company tabled a revised offer of up to 5.3% for the highest-paid workers, including a 1% increase in housing and medical allowances.

But unions rejected the offer and said they intended to intensify the strike which threatens to hit the country’s bulk minerals sector hard and deprive SA of billions of rands in revenue.

The Minerals Council estimated today daily losses of R815m in revenue losses which equates to some 357,000 tons in iron ore, coal, chrome, ferrochrome and manganese shipments that are unable to be made as a result of the strike.

It calculated that the strike, and Transnet logjams, had contributed towards annualised revenue losses of R50bn this year, 43% more than R35bn last year. This covers losses on revenue of iron ore, coal, chrome, ferrochrome and manganese exports.

Speaking on behalf of President Cyril Ramaphosa at the Agri SA congress on Thursday, agriculture minister Thoko Didiza said government was pushing for a speedy resolution to ensure that Transnet operations got back on track.

“We have been working with Transnet, trying to see how we can resolve some of that logjam so that the ports and rail can become functional,” Didiza is quoted as saying in the BusinessLive report. Government was engaging with labour, industry and the Transnet board, she said.