Business

Gordhan’s deep structural reforms for SA’s state-owned enterprises

2020-04-06 15:50

It may look like Public Enterprises Minister Pravin Gordhan has been out of the spotlight due to government’s drive against the Covid-19 Coronavirus pandemic.

But just because he is not part of President Cyril Ramaphosa’s core intervention team, doesn’t mean he’s taken a back seat – “he continues to knuckle down, working on his portfolio in collaboration with the rest of his Cabinet colleagues”.

Ministerial spokesperson Sam Mkokeli told City Press that Gordhan is planning “deep structural reforms” in the seven state-owned enterprises under his watch that provide a varied offering of crucial infrastructure – like power and transport logistics – to the economy.

The economy has taken a hit from Moody’s downgrade to junk status and reduced economic activity on the back of the Covid-19 lockdown.

“The ultimate goal is to drive deep structural reforms in the energy industry through, for example, creating competition within the generation sector, both within the state-owned assets and the private sector,” Mkokeli said.

Transnet

The departments had identified potential in Transnet’s freight and port facilities including the pipeline, he said, adding that “the company needs to create operational efficiencies that can be felt by everyone, not just business”.

Transnet had embarked on an aggressive maintenance and investment programme to help clear the backlog accumulated over the past 10 years.

Eskom

“Both Eskom and Transnet contribute substantially to administered prices, the level that would be pitched, the impact they would have on the competitiveness of various firms and the economy. We need to make sure these companies contribute positively in that regard.”

He said efforts to resist change also had to be “smashed”, including the “often misinformed or deliberate disinformation being passed on, so there are certain constituencies in South Africa who will be propagating the idea that everything is directed towards disposing of or privatising state assets”.

SAA

On SAA, Mkokeli said Covid-19 had affected aviation globally.

The South African aviation industry was extremely fragile, he said, “and is certainly not spared from the disruptions that threaten even the biggest and the most successful airlines across the world”.

“The restructuring of our airlines is a work in progress and we will announce our course of action shortly,” he said.

Durban port

In an interview last weekend Finance Minister Tito Mboweni cited as priority the necessity for speed in the creation of a new airline to take over from SAA, as well as well as intervention in the suboptimal Durban Harbour.

Mboweni said such measures would enable the economy to quickly recover from the junk status rating and the negative impact of Covid-19.

Mkokeli said the port of Durban experienced a sharp decline in productivity as result of increased uncoordinated activity in and around the port precinct, where port users have increased activity without the necessary provision of road and rail infrastructure to support the entry and evacuation of cargo in the precinct.

“The road that is the entry way to the port has remained the same size for the last 20 years and therefore is not capacitated to support the growing number of container and bulk trucks visiting the precinct,” he said.

“In recognition of the multi-sector contribution to this complex problem, the minister set up a multi-sector decongestion team that is working on coordinating all activities in and around the Durban Port precinct”.

He said the other major contribution to the congestion was the misalignment of working hours between the port users and the Durban Container terminals.

“The container terminal operates 24 hours a day, seven days a week and 365 day a year, whereas most port users, depots, packing warehouses and trucking companies operate eight hours a day and five days a week.”

The misalignment created peaks and valleys in the arrival pattern of truck and makes planning difficult for all parties, he said.

To resolve this, said Mkokeli, “the container terminals have introduced a truck booking system as of April 1 to assist with the smooth movement of traffic in and out of the precinct and to ensure full use of terminal capacity throughout the full 24 hours”.

Port plans

Transnet had “embarked on an aggressive maintenance and investment programme to help clear the backlog accumulated over the past 10 years, with the support of international engineers who conducted a full assessment of all their equipment”.

Mkokeli said that in 2020 Transnet would be spending R2 billion to replace old and ageing equipment, starting with the two-year delivery programme of 45 new straddle carriers – freight carrying vehicles – for the Port of Durban.

The company was also embarking on a five-year replacement programme of all container terminal equipment.

“The container terminals are capacitated with the training and recruitment of new operators, taking the complement from 12 to 15 in the next two years,” he said.

He said Transnet was also increasing the number of individuals with technical competences to strengthen its maintenance on critical equipment, and boosting the terminal management team by redeploying experienced managers from support functions into core operations.

“The cost of port delays has resulted in vessels missing their global schedules and steaming up to catch up with the schedule at the next port of call. They have, however, reduced the number of vessels waiting from an average of 12 during the congestion to now five outside of Durban Pier 2 as of today,” he said.


Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining

May 31 2020