Durban - Labour unions have raised concerns over possible job losses after Transnet announced a Philippines-based independent terminal operator as a private-sector partner for the upgrade of a key Durban container terminal.
On Tuesday, Transnet announced International Container Terminal Services Inc (ICTSI) as the preferred bidder for the 25-year joint venture with Transnet Port Terminals (TPT) to develop and upgrade the Durban Container Terminal Pier 2.
According to Business Report, Transnet Group CEO Portia Derby said the partnership with ICTSI would help reposition the terminal for best performance.
“Private-sector participation in Pier 2 is a key catalyst for repositioning the Port of Durban as a container hub port. We are delighted to have a global player of ICTSI’s standing on board to drive this process,” Derby said.
Pier 2 is Transnet’s biggest container terminal, handling 72% of the Port of Durban’s throughput and 46% of South Africa’s port traffic.
Derby said private participation in the freight rail sector would increase competition, boost efficiency and reliability and reduce costs for customers.
The plan will see Pier 2’s current capacity of two million 20-foot equivalent units (TEUs) increase to 2.8 million TEUs and the finalisation of the process follows approvals from the government in terms of the Public Finance Management Act.
However, unions have criticised the deal, saying it lacked transparency and their input had been ignored on the privatisation issue. Cosatu’s KwaZulu-Natal secretary Edwin Mkhize said the decision to privatise infrastructure upgrades at the Durban container terminal would affect the province and they were vehemently opposed to it.
“We have sent a few memorandums to Transnet on the issue of privatisation, but there has been no engagement.
“We learned of this by coincidence. The harbour is a significant economic hub in the province and our main concern is that the private sector wants to cut costs to make greater profit and this means that workers will pay the costs.”
Mkhize said the decision was “strange” as Transnet was one of the more financially viable state-owned enterprises and Pier 1 was in urgent need of infrastructure repairs, not Pier 2.
“What are government officials seeing that we are not seeing? The biggest agenda here is to expand privatisation. We are not saying there are no challenges in the harbour, but those challenges should have been addressed by a capable state.”
Transnet worker unions the United National Transport Union (Untu) and South African Transport and Allied Workers Union (Satawu) met Transnet last month to discuss the proposed private-sector participation.
Untu said they were concerned that the government and “any other external forces unknown to Untu are willing to push for the involvement of the private sector participation at Transnet ports against all odds and with or without recognised labour”.
“Untu’s focus remains on ensuring that this process does not benefit any of the politically connected.”
Economist Duma Gqubule said there were concerns over transparency as the agreement did not provide details on the involvement of the Philippine operator.
“We have seen this in the energy and water sectors. Budgetary support for infrastructure upgrades in the fiscus is the solution, but government is leading a public-sector investment strike by going through the biggest privatisation in the country’s history.”
Gqubule said the country should not be faced with a situation where the infrastructure for electricity and Transnet was coming from the private sector.