COSATU rejects the unbundling of Transnet and the agencification and corporatisation of the state

The Congress of South African Trade Unions has noted with deep concern the announcement by President Cyril Ramaphosa that his administration has decided to dismantle Transnet by breaking out the Transnet National Ports Authority (TNPA) into an independent subsidiary.

The Federation views this decision to implement the National Ports Act of 2005 with suspicion and scepticism because it is not in line with the vision of the Alliance and the ANC Manifesto. This new method of unbundling SOEs has not been properly canvassed with relevant stakeholders and is at odds with the commitment to a developmental, interventionist state.

This is deeply disturbing because this decision was unilaterally taken without broad and comprehensive consultation of stakeholders and unions in particular. It has become a habit for this administration to clandestinely take drastic decisions about State-Owned Companies without engaging unions or other social partners.

The privatisation of South African Airways and this dismantlement and fragmentation of Transnet have been decided without unions being properly engaged. This follows in the footsteps of massive retrenchments at SABC that took place despite strong objections from labour.

This raises the question of whose vision is being pursued by these unilateral decisions and where does this mandate come from considering that even at a political level, there has not been any discussions about these decisions.

This so called “reform” of the SOEs occurs in an environment where this government has made it very clear that it is not interested in the state intervention in the economy. Over the last two years, there has been a fixation with rolling back the state’s role in the economy, trim down the state and open doors for the private sector to take over.

The current government policy outlook is that the state’s main task in economic and social development is to minimise impediments and maximise inducements to private capital accumulation. Privatisation, commercialisation, and deregulation have become the watchwords of those promoting this vision of public sector reform in South Africa.

COSATU in principle support the need to restructure state assets to improve corporate governance, accountability, efficiency, and the execution of their public mandate. These state assets have important primary functions including giving the state leverage over certain sectors of the economy and perform functions which the state can perform more effectively than the market. They are also meant to raise the quality of people’s lives, including through providing affordable, accessible services to the people, regardless of where they live, within a framework of cross-subsidisation.

We reject this decision to unilaterally unbundle Transnet by government because South Africa is already struggling with fact that the Treasury seeks to pursue its own very conservative fiscal target of “a main budget primary balance by 2022/23” at the expense of the public service workers under the PSCBC, whilst protecting the muddled pay and benefit structures in agencies and public entities, with no concern about productivity or performance.

The question that has to be raised then is why there is no concern or even analysis by the government on the rate of growth of the personnel headcount and the wage bill pertaining to these state institutions. We can only conclude that this is because these institutions are part of the Neoliberal statecraft- with its fragmented form and incoherent role as emerged under GEAR.

This fragmented and incoherent state form and role, includes encouraging the outsourcing of certain functions in the operations of departments, agencies, and public entities. These outsourced operations are some of the services and infrastructure roll-out channels through which the state is haemorrhaging scarce resources through the parasitic Public-Private-Partnerships (PPPs).

The outsourcing of functions and PPPs were sold to the public as the means to save costs but in reality, they are the source of corruptive inflation of costs, in fact they are the channels of state-capture as exposed in the Zondo Commission of Inquiry.

The Federation demands a moratorium on the decision to unbundle Transnet and for more honest and proper engagements to take place to discuss the future of SOEs.This decision on Transnet will have serious consequences for workers because if this new entity is declared an essential service, their right to strike will be curtailed. We cannot take President Cyril Ramaphosa at his word about job safety because his administration said the same thing about jobs at SABC, but the opposite happened.


Issued by COSATU
Sizwe Pamla (Cosatu National Spokesperson)

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