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BusinessEconomySouth AfricaTransportation & Logisitics

Transnet to meet with amakhosi and South African Police Service to resolve threats and derailment

by Radarr Africa
written by Radarr Africa

After a train carrying export coal to Richards Bay was derailed near Ulundi on Tuesday, Transnet said it would meet with traditional leaders in the area as it is extremely concerned about disruptions to its operations.

“Transnet Freight Rail will over the next few days be engaging with amakhosi and the South African Police Service to resolve threats to the organisation as well as disruptions to its operations along the North Corridor this past week,” the rail utility said in a statement.

Earlier on Tuesday, Transnet reported that a train carrying export coal to Richards Bay derailed outside iNtshamanzi, near Ulundi. The cause of the incident is under investigation.

ALSO READ: Bank Zero announces launch of cash deposits, announces 2023 fees

The North Corridor runs from Mpumalanga coal fields to Richards Bay. Chrome is also transported along the corridor.

Transnet said it is “extremely concerned” by the threats and disruptions to its operations, and highlighted its job creation and empowerment of businesses along the corridor.

South Africa’s coal exports to Europe have surged amid an energy crisis exacerbated by Russia’s invasion of Ukraine and subsequent sanctions.  Transnet saw 70 derailments in 2021. 

SOURCE: News 24

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BusinessSouthern AfricaTransportation & Logisitics

Transnet to receive in state support R8.5bn to ‘build efficiency’

by Radarr Africa
written by Radarr Africa

Transnet, State-owned logistics company is to receive its first cash injection from the fiscus in decades as it battles to recover from flood damage and a shortage of locomotives due to contractual problems with manufacturers. 

Finance Minister Enoch Godongwana announced R5.8 billion of support for Transnet in the Medium-term Budget Policy Statement. The money is allocated specifically for repairing infrastructure damaged by the recent floods (R2.9 billion) and R2.9 billion to procure spare parts and new locomotives from China’s CRRC Corporation. 

Transnet has been in dispute with CRRC for several years after it terminated an extensive procurement programme for new locomotives mid-stream, as the contracts were tainted by corruption. In response, CRRC refused to supply the locomotives that had been procured with spare parts. 

Due to the dispute with CRRC and other manufacturers, Transnet Freight Rail (TFR) has 331 “long-standing locomotives” that it has been able to use. Earlier this month, the company announced that it had reached an agreement with CRRC and that the supply chain would be reinstated. 

The cash injection for Transnet will assist the TFR to arrest falling volumes and revenue. Volumes have been falling since 2018. In 2018, it moved 215.1 million tons (mt) but by 2021/22 this had fallen to 172.7mt. 

The company is in a race against time to improve its revenue flows to avoid recurring liquidity constraints. In July, facing a liquidity crunch, Transnet raised a $1.5 billion loan and a R12 billion bridge-to-bond facility which it will need to convert to a longer-term loan during 2023/24.

Finance minister Enoch Godongwana said in a briefing to journalists before his speech: “It is more effective to fund state-owned enterprises to do the right thing and increase efficiencies because revenue foregone exceeds the support they would need (at a later point).”

Source: News 24

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BusinessSouthern Africa

Transnet proposes pay offer as Satawu calls off strike

by Radarr Africa
written by Radarr Africa

Transnet, South Africa’s state-owned freight transport and logistics company said the smaller of the two main labor unions it had called off a strike over wages that’s curbed key exports.

“We have appealed to our members to go back to work tomorrow morning,” South African Transport and Allied Workers Union’s (Satawu) spokeswoman Amanda Tshemese said by phone on Wednesday. “In the interest of the economy, the majority has signed and we just have to release our members.”

The union had initially rejected its rival United National Transport Union’s acceptance of Transnet’s pay offer and said industrial action will continue until workers are assured they won’t lose their jobs. UNTU said Monday it agreed a three-year deal with the company for increases of as much as 6%.

Tshemese said the union still doesn’t agree with the current agreement between the majority and Transnet management and would address its issues internally. 

ALSO READ: Saccawu on a verge to strike at Makro after wage negotiation dispute

The union said it represents about a third of Transnet’s 55 827 full-time and contract staff, compared with 24 992 for UNTU.

The strike, which UNTU began on Oct. 6 and Satawu joined four days later, has crimped South African shipments of iron ore, coal and chrome. The Minerals Council South Africa estimated it cost mining companies about R815 million a day. Fruit producers also expressed concern that their harvests will rot at the docks.

The strike is another blow to South Africa’s economy, which contracted 0.7% in the second quarter and may be in a technical recession, according to the BankservAfrica Economic Transactions Index. Economic growth faces more headwinds from state-owned power utility Eskom, which is implementing load shedding due to frequent breakdowns at its generation plants.

Source: News 24

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BusinessSouthern Africa

Transnet meets with unions again to try ending crippling strike, as business offers to pay more

by Radarr Africa
written by Radarr Africa

Transnet said it would take another crack at ending a crippling strike by unions as it returns to the negotiations under the Commission of Conciliation, Mediation, and Arbitration (CCMA) on Wednesday.

The strike entered a full week on Wednesday, with the United National Transport Union (UNTU) and the South African Transport and Allied Workers Union (Satawu) demanding double-digit increases.

Satawu said in a statement on Tuesday that Transnet tabled a new offer of between 4.25% – 5% across the board, but that the union would reject the “so-called revised offer”. 

Business has offered to pay Transnet increased fees and an additional strike-avoidance levy to avoid prolonging the the industrial action. Business Leadership SA CEO Busi Mavuso said on Monday that “several companies have approached Transnet with potential solutions including willingly offering to pay increased fees for Transnet services.” 

Business Day reported on Wednesday that according to industry publication Cargo Movement Reports an additional levy of R148 per container was offered for Transnet’s terminal handling charges.

ALSO READ: Transnet in a bid to avert export disaster due to strike meets fruit exporters.

Transnet said the first day of conciliation on Monday ended with management and the unions signing the rules outlining picketing sites for the industrial action.

“Transnet is hopeful that the unions will formally table their position, to enable the company to assess its feasibility, taking into account affordability and sustainability imperatives for the business, balanced with the needs of employees,” the state-owned freight and logistics company said.

Transnet said it was was committed to a speedy resolution to the impasse, and would reconvene conciliation talks in good faith on Wednesday morning.

While intervention by Minister of Employment and Labour Thulas Nxesi on Monday did not break the deadlock, Satawu called on President Cyril Ramaphosa, Minister of Finance Enoch Godongwana, and Minister of Public Enterprises Pravin Gordhan to intervene.

Transnet notified terminal port customers that all Transnet harbours, except East London, were hit by mass stay-aways as a strike intensifies, with 28 vessels in limbo outside of Transnet terminals or waiting to be given a dock.

On Tuesday Transnet Port Terminals met with leaders in the deciduous fruit industry to discuss contingency plans aimed at preventing a calamitous impact on the upcoming grape and stone fruit seasons.

According to business lobby groups, the Transnet strike could have a detrimental impact on the South African economy and would be “as bad as load shedding”, if the wage dispute is not swiftly addressed.

Source: News 24

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BusinessSouthern AfricaWestern Africa

SATAWU and UNTU plan strike at Transnet in coming days

by Radarr Africa
written by Radarr Africa

SATAWU, The South African Transport and Allied Workers Union plans to down tools as early as Monday, while the United National Transport Union (UNTU) said it served a 48-hour notice on Transnet of its intention to embark on a protected strike from Thursday.

Satawu and UNTU are demanding between 12% and 13.5%.

Transnet’s offer includes a wage increase of 1.5% from this month and a thirteenth cheque, among other benefits. The entity said it wants to keep a grip on its finances, as its wage bill makes up 66% of its operating costs.

However, Satawu rejected this offer.

“The union will serve the employer with a 48-hour notice to strike on Tuesday. After issuing the 48-hour notice, workers will commence on protected strike action on Monday, 10 October 2022,” Satawu said in a statement.

Transnet said in a statement that it applied to the Commission for Conciliation, Mediation and Arbitration (CCMA) to convene conciliation discussions over the current wage negotiations.

“This follows the unions’ rejection yesterday [Monday] of a new offer which the company firmly believes is fair and reasonable given the current financial and operational challenges,” the statement said.

Satawu confirmed it received a letter from the CMMA to facilitate a conciliatory intervention process between parties.

“The aim of such a process is to explore avenues of breaking the deadlock and/or finding common ground between organized labour and the employer. The process will commence on Wednesday (12 October 2022). Please note that the CCMA process will not affect our protected industrial action,” the statement said.

UNTU General Secretary Cobus van Vuuren said in a statement that Transnet’s offer was an insult to its members “who have put everything on the line” to help get Transnet back on track.

“Our members, and the Transnet employees at large, are expected to bear the brunt of years of historic mismanagement and corruption that occurred during state capture. This is unacceptable. Our members and the rest of the Transnet employees deserve better,” said van Vuuren.

Van Vuuren said Transnet must provide a salary increase offer aligned with the increased cost of living and CPI of 7.6%.

“It is time for the government to step in and step up to save probably one of the last SOEs that can possibly be saved, to help our people, to save the jobs of tens of thousands of people, and to prevent our people from being even more impoverished than what we already are,” van Vuuren said.

Source: News 24

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BusinessSouthern Africa

Former Eskom and Transnet bosses Brian Molefe and Anoj arrested

by Radarr Africa
written by Radarr Africa

Former Eskom and Transnet executives Brian Molefe and Anoj Singh were among several former high-profile Transnet employees arrested on Monday morning for their alleged role in a corrupt train tender.

According to a statement from the National Prosecuting Authority’s Investigative Directorate, the suspects were set to appear in the Palm Ridge Specialised Crimes Court later on Monday.

They are facing corruption charges concerning a R30-billion contract to procure 1,064 new locomotives for the rail agency.

It is alleged that Transnet executives siphoned millions from the transaction to various Gupta-linked companies in 2015.

That included R93.4 million to Trillian, R189 million to Regiments, and R74 million to Albatime.

For the first two entities, the payments were supposedly for the same advisory services, while the payment to Albatime was ostensibly for “no apparent reason”.

In mid-July, former Transnet CEO Siyabonga Gama and four other suspects appeared in the Palm Ridge court to face charges in the same matter, but the case was postponed due to load-shedding.

The National Prosecuting Authority said the postponement would allow them to conduct further investigations and add more suspects to the charge sheet.

Molefe served as Transnet’s chief executive officer from 2010 to 2015, while Singh was chief financial officer of the agency between 2009 and 2015.

The Zondo Commission of Inquiry into State Capture heard evidence on the matter and found “reasonable grounds” to believe the pair were among those who were paid cash bribes by the Gupta enterprise for their roles in facilitating state capture at Transnet.

Zondo also found that Molefe and Singh advanced the Gupta family’s interests during their tenures at Eskom.

Molefe served as CEO from 2015 to 2016, while Singh served as CFO between 2015 and 2018.

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Zondo also recommened that Singh be criminally charged alongside another former Eskom CEO, Mathsela Koko, for his role in pressuring Glencore into selling its coal interests to the Guptas.

According to the findings of the inquiry, Singh and Koko had “by false pretences” led Eskom to process payments of R659 million and R1.68 billion, which was later converted to a guarantee, as pre-payments for coal. They are yet to face any criminal charges regarding these findings.

Molefe was recently dealt another legal blow over a pension fund payment that he was incorrectly paid in 2018 after leaving the utility.

In early July, the North Gauteng High Court in Pretoria ordered Molefe to pay back R9.98 million to the utility’s pension and provident fund, with interest calculated from October 2019.

The payment was among several benefits found to be unlawful because Molefe’s short stint at the utility meant he was not entitled to a pension.

Source: My Broadband

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BusinessBusiness and EconomyEconomySouthern Africa

Transnet announces a deadlock in wage negotiation as strike continuous

by Radarr Africa
written by Radarr Africa

Transnet announced on Friday a deadlock in wage negotiations, with two labor unions raising the prospect of a strike that could further cripple the state-owned logistics company and impact Africa’s most advanced economy.

Transnet has been operating below capacity due to the shortage of locomotives, inadequate maintenance, vandalism and theft of its infrastructure, costing miners billions of rand in potential revenue.

In a statement, Transnet said a wage dispute had been formally declared with the South African Transport and Allied workers Union (SATAWU) and the United National Transport Union (UNTU) after negotiations which started in May.

Transnet said the unions had rejected its offer of a 1.5% increase on employees’ pay, excluding medical and housing allowances.

“Their position remains unchanged from the previous rounds of wage negotiations, with a demand for a 12% increase on annual guaranteed pay, as well as other demands which add up to a total increase in labor costs of 21%,” Transnet said.

UNTU General Secretary Cobus van Vuuren told Reuters that his union, which he said was the majority at Transnet with more than 50% of the workforce, had rejected Transnet’s offer as it was way below the inflation rate, recorded at 7.8% year-on-year in July.

ALSO READ: Transnet swings from over R8bn FY loss to a R5bn profit.

He said the formal declaration of a dispute allowed a 30-day “cooling off period” for further negotiations with Transnet.

“However, if there’s no compromise reached by the parties, that would enable labour to go through a balloting process where members will mandate whether we can embark on protected industrial action or not,” van Vuuren said.

SATAWU described Transnet’s offer as an “insult”, but said it remained open to further negotiations.

“SATAWU wants to emphasis that going on strike is not our priority. However, at this stage, the employer is forcing us to go through that route,” it said in a statement.

Source: Money web

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BusinessSouthern AfricaTransportation & Logisitics

Transnet swings from over R8bn FY loss to a R5bn profit

by Radarr Africa
written by Radarr Africa

State-owned ports and rail logistics monopoly Transnet has posted a recovery from the Covid-19 financial fallout, reporting a R5 billion profit for its full-year ended 31 March 2022.

This means it has seen a swing of some R13 billion, from a more than R8 billion loss for FY 2021, back to a profit position. However, the improved performance was largely off the back of an R11 billion upward valuation of its investment (commercial) property portfolio.

From an operational level, revenue increased by a modest 1.8% to R68.5 billion. This is almost R7 billion less than its pre-pandemic full-year revenue level of R75.1 billion for its financial year ended March 2020.

“The significant increase in profits is mainly attributable to the improvement in the Ebitda, a decrease in asset impairments and an increase in fair value adjustments related mainly to investment property,” the group noted in a JSE Sens statement to bondholders.

The group also trumpeted at the release of its latest results on Wednesday that it has secured its first unqualified audit in four years.

Financial highlights:

  • Revenue increased 1.8% to R68.5 billion;
  • Ebitda (Earnings before interest, taxation, depreciation and amortisation) improved
    by 20.5% to R23.4 billion;
  • Profit for the year is R5 billion from a loss of R8. 7 billion in the prior year.
  • Cash generated from operations after working capital changes increased by 18.1% to R29.1 billion; and
  • Gearing and cash interest cover are within debt covenant requirements.

Source: News24

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