We need serious action and leadership from government to push Transnet in the right direction

I WAS astounded to see news last week of Transnet's capitulation to union strike threats, agreeing to give workers 6% pay rises in each of the next three years.

- BUSISIWE MAVUSO

This agreement represents a failure of leadership on both sides - militant unions holding the country hostage with strike threats, and management caving to their demands without a fight.

While South African businesses slash costs and workers face retrenchments, Transnet workers will get pay rises that are double the inflation rate, funded by taxpayers already struggling to make ends meet.

Inflation is running at 2.7% and the economy is expected to only grow 1.4% this year. The news came days after National Treasury had agreed to give Transnet additional guarantees to enable it to manage its huge debt pile.

In the private sector, the bleak economic outlook is leading to severe belt-tightening.

Managers everywhere are having to find ways to save and try to hoard cash to be able to trade through tough conditions.

Inevitably, some firms are going to fail, and workers will find themselves out of a job. Yet the unions threatened to bring the entire logistics network to a standstill unless their excessive demands were met, showing complete disregard for the economic factors that affect us all.

It is even more shocking when you consider the role Transnet plays in perpetuating our economic predicament. Transnet's poor performance has been a major contributor to our dismal growth outlook.

Stellenbosch University professor Jan Havenga has estimated that Transnet costs the economy R1bn every day thanks to its poor performance in moving goods around the country and out through our ports.