Department of Public Enterprises on Ports Restructuring; Consultation with Organised Labour: briefing

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Meeting Summary

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Meeting report


17 September 2003

Mr S Fenyane

Documents handed out:
Department of Public Enterprises: South African Port Operations Restructuring

The Department of Public Enterprises briefed the committees on ports restructuring in terms of why the process was necessary, how it would unfold and what phases it would involve. The meeting also received an update on consultation with trade unions, the transfer of labour, concessioning and projected costs. Most of the concerns raised by members related to job security in the wake of ports restructuring.

Mr Richard Goode, Chief Director: Transport and Rail Assistance of the Department of Public Enterprises, briefed the meeting on the restructuring of ports operations, focussing on two areas: the vision and rationale for ports restructuring and the actual process of restructuring Please refer to document attached - Department of Public Enterprises: South African Port Operations Restructuring.

He explained why change was necessary, what the position of the National Ports Authority would be after restructuring and the establishment of the Regulator.

The overall goal was to make ports perform in such a way that they could contribute to economic development and job creation. The restructuring process could be divided into two phases: preparations and transaction implementation. Government was still engaged in the first phase. The second phase could run for over eighteen months. Regarding the latter phase, Mr Goode listed twenty principles that would constitute the architecture of port operations concessioning. He also set out the economic efficiency goals of restructuring, the objectives for restructuring transactions, ways of increasing the efficiency of port operations and the expected economic benefits from concessioning.

Mr Lucky Montana, Chief Director: Parliamentary Services and Stakeholder Management of the Ministry of Public Enterprises, dealt with Government's consultations with organised labour regarding ports restructuring. Government had engaged with trade unions on the issues of investment, employment and efficiency. Unresolved issues had to be addressed so that restructuring could move ahead with speed.

Mr C Frolick (ANC) asked what amount of money would be needed to fund the process of making the country's ports more efficient. Regarding concessioning, he asked if there were categories of labour that could not be transferred to private operators. What would happen if private operators did not require these labourers? He also inquired about the timeframe for retraining. Would if be of such a nature that local people could fill key posts after concessioning instead of the posts going to foreigners?

Mr J Theron (DA) pointed out that the country found itself at the beginning of a new economic growth phase. If the implementation of restructuring was delayed for too long, the country would not be able to reap the fruits of the new growth phase.

Mr Goode said that the NPA was planning to spend a projected figure of R7,3 billion on basic infrastructure. It was envisaged that Transnet would supply the finance, but Transnet's budget might not be sufficient to do so. More funds had to be applied in order to step up the performance of ports. Concessioning enabled Government to have different operators looking at problems and coming up with different solutions. Mr Goode stressed that nobody would be excluded in the labour transfer that would form part of restructuring. The real challenge for existing workers was to upgrade their skills and enable the ports system to work more effectively. He said the container business kept growing, which meant more jobs were being created. There was no problem regarding a surplus of labour. The timeframe for training would be determined by the concessioning contract. Regarding when the process would get off the ground, Mr Goode said the issue was in the hands of the minister. Concessioning was not the answer to all Government's problems. Government could not wait for concessioning to commence before looking at ways of improving the performance of ports.

Mr M Sibiya (IFP) raised concerns about the job security of ports employees after the three-year moratorium had lapsed. Were there plans for training opportunities in order to prevent forced retrenchments.

Mr Montana replied that concessions would be awarded to the companies with the best plans for training and skills development. Due to container growth, the issue was not about job losses but rather about nurturing a skilled next generation of workers, since many port workers were on their way to retirement (the average age of a port worker was currently 52 years old). He doubted whether there would be a sudden attempt to retrench workers after the three-year moratorium. It was more probable that there would be an increase in employment opportunities.

The Chair said the issues at stake were of such a nature that ongoing engagement would be required.

The meeting was adjourned.


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