The unveiling of Transnet’s results this week highlighted how South Africa’s privatisation programme has been reshaped by sensible compromise and a convergence of interests between the government and labour.
In his Budget vote in May, Public Enterprises Minister Alec Erwin announced the government expected to raise R8-billion from privatisation proceeds over the next 18 months. The announcement drew no fire from labour, while the policy was not raised for debate at the ANC’s recent national general council.
Transnet CEO Maria Ramos announced that last year’s R6,3-billion loss had been turned into a R6,8-billion profit, putting Transnet on a firm footing to drive a R40-billion, five-year investment programme. In part, this vindicates her tough management approach and purge of Transnet officials.
The privatisation programme will, however, see Transnet’s revenues fall from R43-billion to R27-billion.
The parastatal will dispose of non-core assets such as its 49% stake in the V&A Waterfront, Autopax, and troublesome subsidiary Equity Aviation, which a few years ago sapped management time with a protracted strike.
Rail passenger entities Metrorail and Shosholoza Meyl are to be hived off to the department of transport. Transnet spokesperson John Dludlu also confirmed that Transnet will be selling those assets in Transtel that relate to the second national operator.
As a result, Transnet will become a focused rail, port and pipeline operation. The privatisation programme is a far cry from an announcement made by former Transnet managing director Saki Macozoma that Transet would have to lose 27 000 jobs.
The South African Transport and Allied Workers Union (Satawu) managed to reduce the number of threatened jobs to 8 000.
Transnet chief financial officer Chris Wells confirmed that proceeds from the privatisation would be used to fund the investment programme.
The convergence of interest was signalled by Erwin’s announcement when he took office after last year’s elections. The government decided that it would not privatise strategic entities, as these would be used to drive infrastructure investment and job creation in the absence of meaningful direct foreign investment.