If the go-slow continues at the Port of Ngqura, the automotive industry in the Eastern Cape is set to lose R42m a day with most companies unable to recover from the losses.
This is according to Nelson Mandela Bay Business Chamber president Dr Andrew Muir in a strongly worded letter sent to Transnet chairman Popo Molefe.
President Cyril Ramaphosa, Public Enterprises Minister Pravin Gordhan, Trade and Industry Minister Ebrahim Patel, Eastern Cape Premier Oscar Mabuyane and Transnet acting group CEO Mohammed Mahomedy were also sent copies of the letter.
As the protest action continued for a 12th day, Transnet announced on Thursday that it had suspended officials at the Ngqura port terminal for the illegal industrial action.
Transnet has since established a command centre manned by national and local leadership to monitor performance at all ports.
On Thursday, Transnet spokesperson Molatwane Likhethe said: “Discussions are also being held with labour with a view to normalise port operations.”
Muir said the chamber was deeply concerned about the impasse at the ports of Ngqura and Port Elizabeth.
“Exporting activities have literally ground to a halt due to the ongoing go-slow by port terminals employees,” he said.
Muir said the go-slow had the potential of “retarding” the city’s economic growth trajectory.
“This is a region that desperately needs economic development as it is located in one of the poorest provinces in South Africa.”
He said the prolonged go-slow could potentially depress South Africa’s manufacturing export figures, ultimately affecting GDP figures for 2019.
“Additionally, it pauses reputational damage to companies that have an export footprint and face stiff international competition.”
He said a company in the automotive sector stood to lose about R15m worth of production per day due to down time as parts were not available.
“When extrapolated to sector level, the numbers are estimated at R42m losses per day which is catastrophic,” he said.
“This is creating a ripple effect for the company as they will be forced to implement costly triple shifts for its thousands of workers to regain lost ground.
“The down time has forced these companies to send staff home and this translates to huge losses in income and wages.”
He said the citrus industry has also been badly affected.
“They have not been able to transport their perishable goods, putting their international reputation and market share at risk.
“There are reliable estimates that the go-slow is costing the region’s citrus exporting industry between R50-100 million per week.”
He said no concrete solutions had been sent out by Transnet.
“It is doubtful that some of these companies and sectors will be able to recover from the losses in a city with the highest unemployment rate in the country.
“The go-slow has contributed to reduced productivity.
“Furthermore, loss of productivity as shown by the reduced throughput levels of 10 containers per hour as opposed to 60 at both ports, due to lack of maintenance of the cranes and associated equipment is of great concern.”
He requested an urgent intervention by all relevant stakeholders.
“Transnet must put an end to this drawn-out matter so that normalised operations can resume as soon as possible.”
Port go-slow set to cost auto sector R42m a day
Image: PORT OF NGQURA
If the go-slow continues at the Port of Ngqura, the automotive industry in the Eastern Cape is set to lose R42m a day with most companies unable to recover from the losses.
This is according to Nelson Mandela Bay Business Chamber president Dr Andrew Muir in a strongly worded letter sent to Transnet chairman Popo Molefe.
President Cyril Ramaphosa, Public Enterprises Minister Pravin Gordhan, Trade and Industry Minister Ebrahim Patel, Eastern Cape Premier Oscar Mabuyane and Transnet acting group CEO Mohammed Mahomedy were also sent copies of the letter.
As the protest action continued for a 12th day, Transnet announced on Thursday that it had suspended officials at the Ngqura port terminal for the illegal industrial action.
Transnet has since established a command centre manned by national and local leadership to monitor performance at all ports.
On Thursday, Transnet spokesperson Molatwane Likhethe said: “Discussions are also being held with labour with a view to normalise port operations.”
Muir said the chamber was deeply concerned about the impasse at the ports of Ngqura and Port Elizabeth.
“Exporting activities have literally ground to a halt due to the ongoing go-slow by port terminals employees,” he said.
Muir said the go-slow had the potential of “retarding” the city’s economic growth trajectory.
“This is a region that desperately needs economic development as it is located in one of the poorest provinces in South Africa.”
He said the prolonged go-slow could potentially depress South Africa’s manufacturing export figures, ultimately affecting GDP figures for 2019.
“Additionally, it pauses reputational damage to companies that have an export footprint and face stiff international competition.”
He said a company in the automotive sector stood to lose about R15m worth of production per day due to down time as parts were not available.
“When extrapolated to sector level, the numbers are estimated at R42m losses per day which is catastrophic,” he said.
“This is creating a ripple effect for the company as they will be forced to implement costly triple shifts for its thousands of workers to regain lost ground.
“The down time has forced these companies to send staff home and this translates to huge losses in income and wages.”
He said the citrus industry has also been badly affected.
“They have not been able to transport their perishable goods, putting their international reputation and market share at risk.
“There are reliable estimates that the go-slow is costing the region’s citrus exporting industry between R50-100 million per week.”
He said no concrete solutions had been sent out by Transnet.
“It is doubtful that some of these companies and sectors will be able to recover from the losses in a city with the highest unemployment rate in the country.
“The go-slow has contributed to reduced productivity.
“Furthermore, loss of productivity as shown by the reduced throughput levels of 10 containers per hour as opposed to 60 at both ports, due to lack of maintenance of the cranes and associated equipment is of great concern.”
He requested an urgent intervention by all relevant stakeholders.
“Transnet must put an end to this drawn-out matter so that normalised operations can resume as soon as possible.”
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