Privatisation: to be or not to be!

There has been much huffing and puffing about the extent of government’s policy shift on privatisation in the past months. South African Transport and Allied Workers Union ‘s (Satawu) Jane Barrett looks at this from the experience of her union and the transport industry.

While Satawu can confirm that there has been a shift in government policy on privatisation, this has been more gradual and less dramatic than many commentators believe. Based on the union’s experience it can be argued that fundamentals of government’s policy of privatisation remain firmly in place. There have been some tweaks and changes in language which we can count as good news, but we should not be lulled into complacency.

Shift started over two years ago

We date the start of the shift to just over two years ago, when as a result of protest by and engagement with Satawu and other rail unions, government reversed its decision to privatise our railways. For the first time in the process of restructuring of state assets, government engaged labour and management in a serious problem-solving exercise. The result was a common view that the consequences of government’s privatisation plans would be a shrunken rail network, drastically reduced volumes carried by rail, and massive job cuts. The agreement reached revolved around a twenty year plan of investment, volume growth, network rehabilitation, and efficiency gains through concrete projects.

Recent announcements by Spoornet’s chief executive officer, Dolly Makgatle, are entirely in keeping with this plan. The R14bn investment programme is marginally more aggressive than was originally envisaged, and the volume projections are greater than were anticipated. None of the plans involve injections of state capital. All this is good news for railway workers, Spoornet and the economy as a whole. But it must be remembered that none of this would have been possible if we as organised labour had allowed government to proceed with its rail privatisation plans in 2001.

Subsequent to the Spoornet agreement, the language of the African National Congress (ANC) and government started to change. Increasingly President Mbeki, ministers and senior ANC officials talked of the importance of investment in basic infrastructure, and the role of the parastatals in the economy. These sentiments were reflected in resolutions at the ANC’s 2003 Conference and in its election manifesto. To this extent, yes there has been a shift, and an important one at that, because it is a change in the big picture. But here comes the sting.

No real engagement

While there may have been a change in overall focus, there has yet to be any real engagement on the social and economic role of the parastatals. In transport Satawu has been requesting an engagement with government for the past four years on the role of Transnet. Government has consistently ducked the engagement, arguing that it is not ready to discuss an end-state vision because it doesn’t yet have one.

The absence of engagement and consensus on the role of Transnet has meant that middle level government bureaucrats, in cahoots with Transnet’s middle management, have been able to act without any reference to the bigger picture. They have unilaterally done the following:-

corporatised Transwerk Foundries (whose new management promptly pushed the company into the red, resulting in the closure of three foundries);
arranged a management buy-out of Transnet Pharmacies;
put the sale of Transnet Housing out to tender
called for bidders for the administration of the Transnet Pension Fund (and encouraged another management buy-out in the process)
put the sale of the road passenger service Autopax out to tender
announced the sale of 51% of the road freight service Freightdynamics
sold off Transwerk’s Perway.

Actions violate NFA

All these actions have been in violation of the National Framework Agreement (NFA) on the restructuring of state assets. Not a single transaction has been signed off by the management-labour Transnet Restructuring Committee, established in terms of the NFA. All are therefore the subject of current or potential industrial disputes within Transnet. There is the distinct possibility that the various disputes will be drawn together into one major Section 77 dispute, in line with a resolution adopted by Satawu’s national congress in late 2003.

Government will no doubt defend its actions on the grounds that these businesses are “non core”. But in a world where everybody who knows anything about transport is increasingly talking and doing “integrated logistics”, this makes no sense at all. And it definitely makes no sense in the absence of an agreed vision for Transnet.

Showdown looming

But the problems with restructuring process don’t simply relate to the smaller business units of Transnet. There is a showdown looming over Minister of Transport, Jeff Radebe’s recent announcements on the merger of Metrorail, Shosholoza Meyl and the SA Rail Commuter Corporation (SARCC). As part of the Spoornet agreement, government, management and labour agreed to investigate the viability of such a merger. A joint task team was appointed and met on a number of occasions before its work was halted by government pending the resolution of financial squabbles between Metrorail and SARCC. That was the last we as labour heard of the process until the Minister’s recent announcement.

In our view, there may be merit in the merger, but there may also be many unforeseen difficulties which need to be explored before any decision is made. There is nowhere else in the world where long distance and commuter passenger services are run as one operation. The three rail unions have called for an urgent meeting with the minister, failing which we may have yet another dispute on our hands.

Problems at the ports

And then of course there are the ports. The last engagement Satawu had with government on the future of our ports was in November 2003, when an agreement was reached that the future ownership structure of port operations would be discussed in a tripartite forum, where the possibility of private sector involvement would be tested. Satawu was willing to put the private sector on the agenda, provided the approach was problem-solving and the process thorough. There was no agreement that government’s model of concessioning, starting with the Durban Container Terminal, should be pursued. Satawu expected that the tripartite forum would start its work in January 2004. But since that date absolutely no effort has been made by government to get the process going. Instead, there have been repeated references to the concessioning of DCT being “on track”. Yet another Section 77 dispute in the making!

If you hear that Satawu is preparing for a Transnet wide strike, take that as a sign that privatisation is not quite as dead as you thought it was.

Jane Barrett is policy coordinator of Satawu