LETTER: The tail is wagging the dog

Business Day’s hasty and unqualified embrace of the call for “urgent intervention” at Transnet is not surprising given the pattern of your title’s coverage of our company over the past few months (“Government should take up Minerals Council offer to help sort out Transnet”, January 16).

But unsurprising as it is, it definitely requires interrogation. It has been concerning to note the amount of space Business Day has provided to parties who are critical of Transnet’s business operations and its policy environment. The opinions of these critics appear to be heralded by the paper, while the views of those with a more sober approach to the goings-on at Transnet — such as the Black Business Council — seem to be relegated to the margins. Incidentally, it is quite unfortunate that a publication of Business Day’s size and influence seems to view transformation matters as “baseless and diversionary” — a point I will come back to.

It is also quite disturbing how quickly the amnesia on the impact of state capture seems to have set in. The setting aside of the contracts with the Chinese OEM CRRC E-Loco Supply has a real and direct bearing on Transnet’s ability to deliver optimally to its customers in three major corridors (the North, Northeast and Cape corridors) that account for roughly 50% of Transnet Freight Rail’s revenue, and support three primary mining sector segments: export coal, chrome and manganese. Transnet has spared no efforts to resolve the long-standing locomotives issue. The Minerals Council itself can attest to this, as some of its members have also intervened to try to resolve the issue, without success.

Transnet’s fortunes are inextricably linked to that of our customers. Constructive engagements, and an open and collaborative relationship with our customer base therefore remain priorities. To this end Transnet continues to meet and engage with the Minerals Council and its members, and has put interventions in place to deal with their concerns.

A quick breakdown of these engagements will indicate their depth and frequency:

• Round-table discussions, which are held twice a year. These are chaired by Transnet Freight Rail’s CEO and focus on issues affecting the industry and areas of collaboration.
• Channel optimisation team meetings, six of which were held from February 2022 to date, which aim to align with customers on performance, give an indication of the customer market, identify quick wins to improve customer service and introduce continuous improvement initiatives.
• Industry sessions, of which two were held last year. The aim is to align with customers on performance, gain insight into the customer market, identify quick wins to improve customer service, and introduce continuous improvement initiatives.
• Weekly tactical planning sessions, where capacity is allocated on Transnet infrastructure to customers on a fair and equitable basis to meet their volume requirements; provide a weekly resolution view of capacity and utilisation to help Transnet optimise the allocation of assets and resources; provide customers with a basis for scheduling vessels to meet delivery of material to ports; and provide a mechanism to replan to ensure non-customer related losses are shared equitably between all.
• The monthly customer meetings are held to align with contractual agreements; measure performance against set targets and proactively communicate and share operational challenges that might impact the customers business.

In essence, the forums are there, we are using them, and they are working. And, as the Black Business Council points out, it is inappropriate to undermine these very forums by grandstanding. If the forums don’t work, make them work.

Back to the issue of transformation. SA has a huge challenge of low growth, unemployment and inequality. We have an obligation, not only as a state-owned company but as a good corporate citizen, to do what is within our means to create an enabling environment for inclusive growth. There is a direct correlation between the pace of Transnet’s attempts to build an emerging mining sector and the volume of noise made by those who prefer the status quo.

Transnet has recently started implementing measures to increase capacity allocation in rail and ports for emerging miners, as part of efforts to reduce barriers to entry, improve the ease of doing business and support transformation of the mining sector. The initiatives by Transnet include improving access to infrastructure such as loading facilities, and simplifying the contracting, credit management and capacity application processes.

Come April 3, Transnet is making available 2-million tonnes a year of export capacity, which it seeks to allocate to new-entrant, emerging miners that hold valid mining rights and have existing manganese mining operations. Over five years Transnet will increase capacity allocated to these miners, with a 70/30 split between major and emerging miners expected by 2027. As Transnet has deepened its interventions to support and develop emerging miners so has the outpouring of criticism. It is disingenuous to ignore that.

Transnet has operational challenges, granted. But these are being addressed, one by one, in the interests not just of Transnet as a business but to enable the growth and competitiveness of key sectors of the economy. Let’s try to avoid a situation where the users of services — no matter how significant they are — begin to try to dictate to their service providers how they should be run, who they should be run by, and who should be hired and fired. That is more irresponsible than any of the claims that have been made against Transnet.

Ayanda Shezi
Transnet spokesperson

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