How can Transnet contribute socio-economic transformation: stakeholder engagement

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Public Enterprises

11 March 2020
Chairperson: Mr K Magaxa (ANC)
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Meeting Summary

The Portfolio Committee held a stakeholder engagement to discuss how Transnet can contribute towards the socio-economic transformation such as rural development, job creation and the promotion and support of small and medium businesses. Submissions were heard from Congress of South African Trade Unions (COSATU), Business Unity South Africa (BUSA) and United National Transport Union (UNTU).

COSATU presented its assessment of the key challenges currently faced by Transnet and provided 18 recommended interventions. Like other State Owned Enterprises (SOEs), Transnet is facing collapse due to state capture, mismanagement, infrastructural neglect and criminal activity such as cable theft and arson. For years it has been riddled with the looting of assets and poor supply chain management practices.

A key discussion point was mismanagement, particularly the exorbitant packages and perks received by senior managers. Members wanted to know why management continued to receive such perks despite it being a failing organisation. Cable theft and arson continue to be a major impediment to the railway industry. Multiple train accidents and fatalities have occurred due to signal failure and over 100 carriages have been lost due to arson. However, very few arrests have been made despite the Criminal Matters Amendment Act. Both COSATU and the Committee were in agreement that there is a need to establish a dedicated South African Police Service (SAPS) railway unit and greater community police involvement to combat criminal activity. Enlisting more private security would not be sufficient and would only drive up Transnet tariffs.

BUSA presented on Transnet’s contribution to socio-economic development from the perspective of agricultural business. The South African agricultural business continues to show consistent economic growth with exports valued at R140 billion per year. Rail and port efficiency are key influencers on how well the industry can continue to enjoy growth, therefore, an improvement in logistics is one way to raise competitiveness and to drive socio-economic development. Currently, the majority of bulk agricultural product is transported by road. However, BUSA said there is potential for a shift towards freight rail being the preferred method as it offers reduced logistics costs. Reduced logistic costs would also lead to lower food costs as 25-30% of the cost of food is associated with logistics.

Members asked what specific steps can be taken to ensure this as it seems like an easy fix. Why was such a practical issue not being raised during the State of the Nation Address (SONA)? The shift from road to rail would also provide an opportunity to unlock agro-economic potential in rural areas that have poor road infrastructure and limited access to markets. Members stated that Transnet was currently moving more than twice the volume of produce it did 15 to 20 years ago. Therefore, what commodities have been identified that are not currently being moved by Transnet and why? They asked about opening up to private investment and BUSA reported that there is interest from the private sector to invest in the railway industry, but a concrete regulatory framework must be finalised to establish suitable agreement conditions. BUSA would like to establish a service level agreement with Transnet. It has already been established that the price of moving agricultural products by rail is better than by road; therefore rail should logically be the first choice.

UNTU said it was very clear that Transnet had failed the country. It had not met its stipulated thresholds for local production and content set at 60% for electric locomotives and 65% for diesel locomotives – subsequently limiting the potential for job creation. Corruption was named as one of the primary causes of this underperformance. Had there been no corruption, positive investments would have been made in the right areas. UNTU noted the R50 billion contract for the purchase of 1064 electric and diesel locomotives.

Members asked UNTU to clarify what had gone wrong with that tender and where the corruption had occurred. The status of the abandoned De Aar railway hub was raised. UNTU agreed that Transnet should have done research prior to implementing the De Aar project. However, it is possible to find a way to revive former rail network hubs. The challenge now is to address why efforts have failed and to find more feasible solutions even if this means reviving hubs to partial capacity.

Both the Committee and the stakeholders present agreed that although it was disappointing to continually raise the same issues around corruption, state capture and poor management, it was necessary to continue engaging on this until those responsible are held accountable. In addition, it is evident that a huge turnaround strategy is needed if the total collapse of Transnet is to be prevented.

Meeting report

COSATU submission
Mr Matthew Parks, Parliamentary Coordinator for COSATU, gave a submission on the key crises areas facing Transnet as well as proposed strategic interventions. Transnet currently plays a key economic role in the country as it is instrumental in transporting freight to domestic markets and ports for international export. However, it is facing serious challenges after years of deterioration due to state capture, mismanagement, neglect and economic structural changes.

Key challenges include:
- Rampant corruption through state capture, looting of assets and poor supply chain management
- A ballooning management structure, exorbitant management packages and overall mismanagement
- Significant infrastructural neglect and the abandonment of former railway hubs such as De Aar
- Criminal activity including cable theft and arson
- Collapse of other relevant SOEs: Passenger Rail Agency of South Africa (PRASA), Metrorail and AutoPax

Proposed Interventions
COSATU provided 18 proposed interventions for addressing these challenges. Amongst those proposals included a comprehensive audit of all Transnet contracts and expenditure to root out corruption and the cancellation of any contracts found to be corrupt, illegal or over-priced as well as a lifestyle audit of all managers and the appointment of qualified managers. It is crucial that management is held accountable through dismissals and personal financial liability when found guilty. COSATU recommended the reduction of the bloated management structure and the removal of exorbitant packages given to senior managers while Transnet is on the verge of collapse.
           
Massive damage has been done to Metrorail in Cape Town and other urban centres due to cable theft. Despite the Criminal Matters Amendment Act providing for harsh sanctions for cable theft, few have been prosecuted for it. To address railway related crimes, it was recommended that a dedicated SAPS unit is established as private security companies are not a sufficient measure to address the criminal activities riddling the railway industry. There also needs to be more involvement by community police. More arrests need to be made for perpetrators guilty of cable theft and arson.

A maintenance and infrastructure revitalisation programme should be developed with the support of impact investment funding for public and private financial resources and investment funds. Focus areas of this programme should be improving commuter rail, freight rail and port facilities. A longer term vision is to establish high speed railway routes between Gauteng, Durban, and Limpopo.

Business Unity South Africa (BUSA) submission
Mr Theo Boshoff, Head Legal Intelligence: Agricultural Business Chamber (Agbiz), said Transnet plays a crucial role in South Africa’s agricultural business trade industry, particularly in the transport of bulk grain. Exports in the agricultural industry have been growing consistently over the last several years and there is a positive trade balance. The most recent evaluation showed that agricultural exports are valued at R140 billion per year.

Key highlights included:
- Agribusiness is a growing industry, but rail and port efficiency are key influencers of growth
- Roughly 25-30% of the total cost of food is related to logistics
- Improvement in logistics efficiency is crucial for competitiveness and socio-economic development
- Push for a potential shift from road transport to rail; rail transport offers reduced logistics costs
- Regulatory framework for national rail transport needs to be finalised to encourage private investment where viable.

Prior to 1994, bulk agricultural product was transported by rail due to regulation by marketing boards. Following de-regulation, over 90% is now moved via road transport. State investment shifted from rail to road but there are socio-economic challenges that come with this such as increased road accidents. Rail transport provides reduced logistics costs which is the premise for a potential shift from road to rail, but this requires investment. Additional benefits of shifting to rail transport include decreased road congestion and accidents and the unlocking of economic potential in rural areas that have agricultural potential but limited access to markets due to poor road infrastructure. The necessary infrastructure required for the shift already exists which would ensure an easier transition. NEDLAC is funding research to identify areas where the shift from road to rail will be beneficial and where the most socio-economic benefit lies to foster rural development. One of the challenges is information gaps in the quantity of grain that is transported by private entities which organise their own rail transport.

Although 90% of millers show an interest in the shift to rail, industry research has shown that grain companies have concerns over disrupted service delivery caused by cable line theft. Infrastructural challenges associated with offloading product from rail versus road are another area of concern.

Line theft and vandalism continue to be a challenge; this still requires an integrated plan on how it will be addressed. Positive investment is being made in ports and revenue needs to be reinvested into infrastructural maintenance

Proposed Interventions
Some of the critical interventions needed include:
- Finalisation of the regulatory framework governing the national railway industry. This is crucial if Transnet is to attract investment from the private sector. Private sector interest was there; however, the regulatory environment needs to be addressed and finalised first.
- There needs to be improved information and data sharing amongst all industry stakeholders.
- Establishment and use of dispute resolution mechanisms and a crisis management body between the public and private stakeholders.
- Focused meetings between Transnet, the Department of Transport, National Ports Authority and Industry twice annually.

United National Transport Union (UNTU) submission
Mr Steve Harris, UNTU General Secretary, said UNTU had received short notice on its engagement with the Committee and therefore did not have enough time to prepare a document for which he apologised.

He said that it was clear that Transnet had failed the country. It had not met its stipulated thresholds for local production and content; these had been set at 60% for electric locomotives and 65% for diesel locomotives, subsequently limiting the potential for job creation. Had this process been controlled more carefully to ensure that there was no corruption, investments would have taken place where they were meant to, and employment opportunities would have been created. The Department of Trade and Industry had indicated concern that four of the manufacturing companies awarded the R50 billion contract to supply 1064 electric and diesel locomotives had not met the minimum threshold required for local production and content. Therefore, there is a need to perform thorough assessments on what went wrong. Were initial projections overzealous? What can be done to improve localisation and job creation?

It was reported that Transnet had established the servicing of wagons to try to revive the De Aar railway town. A site was moved there to specifically service wagons utilised by Transnet, however the project has failed to achieve its aim. The current state of De Aar shows no improvement, in fact it has deteriorated. Was this due to a lack of commitment by the board or management? These are some of the question Transnet needed to answer to clarify if its motives were simply profit or finding a balance between rural development, job creation, production and profit generation.

When the 1064 locomotives contract of 2014 was commissioned under former board chairperson, Mr Mafika Mkwanazi, Transnet provided assurance that due diligence was done to ensure that the contract was sound. In retrospect, this was not done. The damage caused by the R50 billion locomotive is an indication that there is a need to thoroughly assess contracts before entering agreements. Labour, government and business need to partner to stop corruption and find solutions that will benefit the country.

When looking at rural development, China’s economy serves a good example. It moved factories to the rural areas in various parts of the country which then brought socio-economic opportunities to those communities. With the right role players, South Africa can do the same. However, this requires a shift from simply talking about ideas, there needs to be more meaningful engagement which leads to the implementation of plans.

A train that is meant to take 12 hours from Johannesburg to Durban takes up to 24 hours. This is due to rampant railway theft and poor rail conditions which warrant speed restrictions. This has significant financial implications as overtime is paid and overall cost increases. How do we ensure that theft of rail, cables and parts is stopped as it impacts how well Transnet is able to deliver on its mandate? These are crucial challenges that need to be addressed prior to focusing on rural development investment. These will only be possible through collaborative effort between Transnet, government, labour and business.

It was clarified that UNTU had not suggested the deployment of the South African National Defence Force to secure the railway. This would serve only as an interim solution for railway theft; however, there was need for a long term intervention. UNTU had played an instrumental role in the enactment of the Criminal Matters Amendment Act, but there had been only one arrest made under that Act. Why are perpetrators of railway related crimes not charged under this Act? Contracted private security companies are not there to deal with the high levels of crimes experienced in the rail industry. This requires the deployment of a specialised defence unit if these issues are to be corrected.

Discussion
The Chairperson noted the South African Association of Freight Forwarders had assured the Committee that they would be joining the meeting; however, they had not arrived.

Mr G Cachalia (DA) expressed disappointment that no senior members from Transnet were present as it was important for them to hear what contributions the stakeholders had.

He said there were several opportunities for growth, but structural impediments needed to be addressed before other investments are made in rural development and small business. A huge property portfolio lies with Transnet across various municipalities which require facilities management; this is an area for significant employment opportunities. Transnet employees are approximately 50 000 people which presents a catering opportunity. Transnet has a network of about 22 000 kilometres of railway but there is an underutilisation of slots which could foster rural development. There is an opportunity for local procurement of black rock and railway ballast as this is a low technology industry which simply requires a quarry. South Africa exports steel abroad only to import rails from Austria. This is counterintuitive as this is a business opportunity for local production. Rails are bought from Austria whereas South Africa exports steel abroad to be imported again.

Ports are another area for significant growth; long queues are an indication of growing demand. However no attempts to increase capacity have been made, why is this so? Approximately R16 billion is generated, of which 50% is profit from EBIT tariffs from ports, this is larger than Transnet’s profit market. How has this been optimised, and should there not be more investment towards modernising ports? These are a few examples of some of the investment opportunities that could be made, however, money cannot be allocated to an organisation that is rife with corruption and malfeasance. This must be addressed first.

Mr N Kwankwa (UDM) raised concern over the fact that no criminal arrests had been made for individuals involved in state capture, perhaps the Committee should be more vocal as most of the corruption happened in SOEs. He raised the Accelerated and Shared Growth Initiative for South Africa (ASGISA) economic policy which had a number of binding contracts. It was championed by then Deputy President, Ms Phumzile Mlambo-Ngcuka, who spoke about the volatility of rand at the time and the cost and capacity of the national logistics system. He asked what has happened since then. Inefficiencies at ports and recommended interventions were mentioned in this policy document over 14 years ago. If the same issues are still persistent, what have we not done correctly?

In a previous engagement with the Portfolio Committee on Home Affairs, the issues of theft and vandalism were discussed. Similarly, the role of the Hawks and the intelligence services in fighting cable theft, vandalism and arson was raised. Therefore, why has the intelligence agency not infiltrated perpetrators of such criminal offences, especially in the Western Cape? There are many allegations in townships that taxi drivers and/or owners are responsible for cable theft as a means to monopolise transport. Although these are allegations, there is a need to investigate.

Some of the proposed interventions recommended by COSATU are consistent across all SOEs. During an engagement with Eskom, COSATU was in unanimous agreement that a financial audit needed to be done. In the past they have made several recommendations on how to address SOE challenges. Therefore, why has COSATU not pressured government to follow up on Transnet? Is this due to a lack of political will?

Why was there was no concerted effort towards addressing logistics if they accounted for 25% to 30% of the cost of food. Why are practical steps such as improving national logistics not raised during the State of the Nation Address (SONA)? The collapse of railway systems has real socio-economic implications for rural and vulnerable communities who are forced to use more expensive modes of transportation. These are pertinent issues that require immediate attention.

Ms O Maotwe (EFF) said having worked 11 years for Transnet she had not gotten any valuable information from the submissions. COSATU needs to understand what Transnet does. It had cited that Transnet transports workers and learners in key metros which was incorrect. Transnet is a freight transport organisation whereas Passenger Rail Agency of South Africa (PRASA) is responsible for the transport of citizens. She said there was a lot of confusion from not only COSATU but some of the Committee members on Transnet’s mandate and operation.

She commented that the majority of BUSA’s submission addressed the move from road to rail, however it was unclear what exactly was being said. Transnet is currently moving approximately 200 million tonnes of freight annually which is more volume than it did 15-20 years ago. Over 1000 trains operate daily. Therefore, BUSA must clarify what commodities are currently not being moved and why? Industries are abusive and impose tariffs that cannot sustain companies which lead to their collapse.

She said the De Aar facility was never a sustainable option because the market and equipment were not considered before the project was implemented. Transnet cannot sustain itself, it needs to look to attract customers beyond South Africa because currently assets are not being utilised to their full potential. However, even if it were to attract new customers, the De Aar facility will still be underutilised because it is too far from ports. The cost of transporting wagons from De Aar to the closest port in Durban is not sustainable.

What corrupted the 1064 locomotive tender? Similarly, to the Zondo Commission, it is unclear where exactly the corruption occurred.
 
She clarified that ballast is manufactured locally but steel is the biggest shortfall —no player on the continent is manufacturing steel which forces Transnet to import. She agreed there is a need for SAPS to get involved in railway related crime; Transnet cannot do this itself as this would increase tariff prices. Transnet currently does have about 60 000 employees located across the country. Each facility has privately held restaurants; therefore, catering services would not be a new intervention.

She expressed disappointment that stakeholders had not presented real ways that Transnet can contribute towards the economy beyond what is already being done; there was more discussion on challenges than on solutions.

Ms V Malinga (ANC) remarked that stakeholders need to have done research on the background of Committee Members as Ms Maotwe is knowledgeable on the Transnet operations. COSATU had spoken about corruption and poor management which are already in the public eye. There was need to deliver more input on how challenges will be resolved. She agreed that there needs to be a specialised unit for cable theft; however SAPS officers would need to undergo additional training. A specialised unit would therefore only be realised in the long-term future.

A shift from road transportation to rail requires the interrogation of the private trucking industry as it is run by highly profitable actors. Are these actors willing to make the shift? The trucking industry is responsible but not held accountable for major road damage and the high incident rate of accidents. This is an industry that needs to be looked at because it has major socio-economic impacts.

Ms J Mkhwanazi (ANC) asked COSATU to clarify how it intended addressing mismanagement such as Transnet’s ballooning management structure, exorbitant management packages and perks and unqualified management. Is the capacity there to revive rail networks like De Aar which have undergone infrastructural neglect? What will be the benefits of reviving these networks? She asked COSATU to explain what lessons can be learned from the shift of freight to trucks. With regard to worker representation on SOE boards, how will this be ensured?

She supported the recommendation on insourcing and maintenance of infrastructure. However, she expressed concern about looking to private partners for investments. Do we currently have partners who are ready to invest in SOEs at this moment?

To BUSA, she referenced the 25%-30% impact that logistics have on the cost of food. What can be done to reduce this? She asked UNTU if it believed that key role players had the capacity to address current challenges.

Ms R Komane (EFF) who had recently joined the Committee asked for clarity on what steps will actually be made to rectify Transnet’s challenges so it can assist with job creation. Challenges of state capture have already been reported, there is a need to look beyond this and address the way forward. All relevant stakeholders need to be solution oriented and those solutions must be for the betterment of the SOEs.

The Chairperson emphasised Ms Komane's point about being solution oriented. He asked Mr Boshoff to provide more input on BUSA’s recommendations. BUSA has many big affiliates like Tiger Brands and Farmwise. Therefore what can they do to help Transnet be more viable for socio-economic development?

Exorbitant management packages are a challenge that is consistent throughout all SOEs – how should this be dealt with? What mechanism can be utilised to address this challenge? When referring to compromised management, this is in reference to individuals alleged to be involved in corruption. If management is removed, acting official must be appointed and paid. How then do we deal with the implications of maintaining salaries for acting officials of an organisation that is rife with financial challenges while awaiting the conclusion of a lengthy judicial process?

UNTU response
Status of De Aar railway hub
Mr Harris clarified that a factory was not set up in De Aar; in fact it was a service level business that was put up in an attempt to revive the town. He agreed that Transnet should have done research prior to implementing the project which could have prevented its collapse. However, it is possible to find a way to revive former rail network hubs. The challenge now is to address why efforts have failed and to find more feasible solutions even if this means reviving hubs to partial capacity.

Local production
In response to Ms Mkhwanazi, he said that Transnet does have the necessary skills to manufacture certain locomotive spares. Transnet Engineering has the necessary specialised skills and capacity; it only requires retraining and upskilling to be able to supply those spares.

BUSA response
Opportunities for growth
BUSA had recently received a presentation from Transnet explaining where opportunities for growth lie. 36.9% of Transnet’s business is in mining, 31.6% is in liquid bulk and 17.9% is in containers. They identified the agriculture industry as an area for potential growth, specifically the grain industry. BUSA is awaiting research results on which areas and which agricultural produce specifically will provide more opportunities.

Recommendations
Mr Boshoff emphasised that there is a need for a closer relationship with Transnet. Another recommendation was the finalisation of the regulatory framework for public-private partnerships. There is current draft legislation establishing the conditions for third party involvement in port and rail activity. Until these bills are passed and conditions for partnership are established, it is difficult for investors to make commitments.

Grain industry
BUSA would like to establish a service level agreement with Transnet. It has already been established that the price of moving agricultural products by rail is better than by road; therefore rail should logically be the first choice. A truck that is meant to take one to two days to deliver maize meal intended for human consumption can take up to three months. By the time the consignment reaches the miller it is tainted. Secondly, for BUSA the provision of clean and functional railway cars is crucial, otherwise product is tainted. A service level agreement is critical if rail is to be made the preferred option for transporting agricultural produce.

COSATU response
Mr Parks replied that no one has a monopoly on devising solutions and that this requires collaboration. There is a need for a debate on the future of the SOEs; pre-existing models from the 1950s will not suffice. SOEs are meant to empower employees but employees are now subsidising SOEs.

Procurement bill
There is currently a bill on local procurement which is awaiting finalisation; government takes long to finalise bills which impacts economic growth, this is an area the Committee can help put pressure on.

Law enforcement capacity
Government needs to start prosecuting those implicated in state capture. Various commissions, such as on  SARS, have been completed yet no arrests have been made. Similarly, the collapse of the National Intelligence Agency (NIA) has been discussed and books have been written, yet no one has been held accountable. This makes it difficult for the public to take government seriously. Another responsibility of the Committee is to hold the Executive accountable.

ASGISA
Mr Parks admitted that unfortunately he could not provide much information on what had happened with the ASGISA policy. Many policies are formulated but not implemented by government. There is a lack of political will and managerial capacity to carry out concrete plans.

Copper theft
COSATU is aware that scrap dealers have large quantities of copper and the origin of this stolen copper is obvious yet very little is being done. Government continues to pass bills but the political will to execute them is lacking.

Transnet and PRASA
Mr Parks clarified that indeed Transnet and PRASA are two separate entities, but their relationship is symbiotic. He invited the Committee’s input on how the two should be managed and approached.

Recurring challenges
COSATU has no choice but to keep raising the same issues until people are held accountable for the corruption and malfeasance seen across SOEs. There is very little worker representation on SOE boards which deepens the gap between management and workers.

Exorbitant performance packages
Addressing the challenge of senior management compensation all comes down to government and political will. Managers cannot be earning in excess of R1 million which is shocking relative to lower level employees. One way to address this is to reassess the management structure and to reduce perks. It does not make sense for managers to continue receiving performance bonuses when SOEs are not performing well. Government must freeze management packages and institute cuts. No law is required to hold management accountable. Why have shareholders failed to do their job in holding management accountable? For the past five years government has been talking about a Shareholder Management Bill which could be a vital tool in establishing the role of shareholder in SOEs.

Further discussion
Ms Komane said based on the stakeholder inputs, it is clear that the Committee is not doing enough to engage with departments on consequence management. Members are well aware of all the challenges faced by SOEs, especially corruption, yet little is done. Do committees lack capacity to hold departments accountable? COSATU is correct in saying they cannot stop raising recurring questions until they have been adequately addressed.

Ms Maotwe said the grain issue is worrying. It should not take three months for a consignment to reach its destination. Transporting grain is not a complicated matter.

She agreed with COSATU that we need an open and corrupt-free government and to ensure accountability, this is something the EFF is committed to. COSATU cannot say Transnet and PRASA cannot be separated, this was by design by the ruling party, therefore they should be judged separately.

In the past when Transnet was under white management it had the same perks and even more (housing, lifetime medical aid) until black management came in. Discussions around the cutting of perks only came about with the transition in management. She disagrees that perks must be cut now. The work done by Transnet far exceeds what other industries are doing. If targets are achieved, they must be given performance bonuses as Key Performance Areas (KPAs) are a commitment.

Ms Malinga said the responses from COSATU were sufficient, however an urgent turnaround strategy is needed - this goes for all SOEs. This is crucial given current the economic situation and unemployment rate.

Mr S Gumede (ANC) asked why is corruption always mentioned but no arrests made. Which sector is corrupt, is it management or the boards? Or is there collusion between the two to promote corruption? He asked if there is no government policy addressing the sale of stolen parts, cable and copper theft. Can we not do away with scrapyards that have become major trading ports for stolen cables? Are there criminal implications for scrapyard owners found with stolen copper?

The Chairperson said he was sympathetic with Ms Maotwe on the perks and packages given to employees. However, payouts should be relative to pay for lower level employees. The exorbitant packages given to senior management only widens the inequality gap.

COSATU response
Mr Parks agreed on the crucial role that Committees must play in putting pressure on the state to act. Consequence management must be implemented across the board from departments to SOEs. He agreed that checks and balances and transparency on the consequences of corruption are needed. If an example must be made of senior management, politicians and the private sector to make a point, then so be it.

Exorbitant management packages
These needs to be clarity between perks for management and those for shop floor workers because there is a huge pay gap. The major issue is not with performance packages for lower level employees but with those given to management who are primarily responsible for the breakdown of SOEs. Managers are responsible for the health of SOEs and the collapse of these institutions is a direct reflection on their ability to carry out their duties.

Turnaround strategy
COSATU agrees that a comprehensive turnaround strategy is needed. As seen in the case of the South African Airways (SAA), the first casualties of SOE collapse are workers. The real epicentres of corruption in Transnet are in management, supply chain and the board.

Scrapyards
Scrapyards have an economic role to play. However, there needs to be a system of certification and proof to ensure that scrapyards are not major ports of the transfer of illegally sourced cable and copper.

BUSA response
Mr Boshoff reinforced that corruption needs the cooperation of multiple actors to thrive. On the turnaround strategy, it is encouraging that some of the challenges experienced by Transnet can be remedied through establishing service level agreements with the various stakeholders it engages with.

UNTU response
Mr Harris agreed that more regulation of scrapyards is necessary. Completely doing away with scrapyards is not a feasible solution but stringent measures such as establishing a registry for source of copper sold could be put in place.

He said that corruption exists in both SOE boards and management. Government must be seen by the public as taking the necessary actions to address corruption.

Conclusion
The Chairperson thanked the stakeholders present for honouring the meeting and engaging with the Committee. The point of such stakeholder engagement is about coming up with solutions and turnaround strategies, these are more important than stating challenges.

He thanked COSATU for always being prepared to present and provide information timeously when engaging with the Committee. He encouraged other stakeholders to do the same in the future. He acknowledged BUSA for showing its commitment by attending the meeting. He apologised to UNTA if the invitation for the meeting was delivered late, but he expressed doubt that the Committee was in error. He said he would like stakeholders to provide their documents in advance of meetings to allow the Committee to be prepared. This is even more crucial given challenges with load shedding.

The meeting was adjourned.

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