Gatvol Business has finally lost patience on Transnet disaster of “epic” proportions

The most authentic voice of South Africa’s organised business comes from local chambers of commerce, whose membership has a high proportion of entrepreneurs and owner-managers. Mostly because members of these chambers rely less on government business than often too-beholden corporates. So, to really know what SA Business is thinking, there’s nobody better to listen to than Melanie Veness, who chairs the association of all SA’s chambers of commerce. Veness is no stranger to talking truth to power. As the long-serving CEO of the Pietermaritzburg and KZN Midlands chamber, she has tackled many controversial issues, including during the July 2021 Riots when she was the sole voice of those hardest hit by the destruction. Veness is at her most feisty here, explaining why businesses have ‘had it’ with Transnet, a once-efficient operation stuffed with incompetent and often arrogant ANC deployed cadres. She says Business has taken too many hits from this useless monopoly and demands decisive action from Transnet management’s ultimate boss, Public Enterprises Minister Pravin Gordhan. – Alec Hogg

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Relevant timestamps from the interview

00:10 – Introductions
01:40 – Melanie Veness on how long she has been working in her current role as CEO
02:20 – On writing to a letter to Pravin Gordhan about Transnet
03:41 – Why big business has not been stepping up to the plate on this
04:27 – The problems surrounding Transnet
05:46 – How many business chambers are reliant on imports and exports
07:56 – Getting the cold shoulder from government
08:44 – On if there’s a deeper agenda going on at Transnet
09:12 – Meeting Portia Derby
10:13 – On if she’s calling for the replacement of leadership
12:10 – The Filipino public private partnership
13:10 – The contents of the letter sent to Pravin Gordhan
14:26 – Why is there a reluctance to even listen
15:15 – Members are looking for alternatives
16:30 – The Mozambican ports
17:26 – On why it has taken this long to get Gatvol
17:53 – The response from Pravin Gordhan
18:23 – When is the meeting going to be held
18:35 – Conclusions

Listen here

An edited transcript of the interview with Melanie Veness, chairperson of the South African Association of Chambers of Commerce.

Alec Hogg: Well, often it seems that it’s the members of the fairer sex who are asking the more telling questions in South Africa. One of those has been Melanie Veness, who’s the Chief Executive of the Pietermaritzburg and Midlands Chamber of Business. The latest in her crosshairs is Transnet.

Melanie, good talking with you again. You’ve had a lot of success speaking truth to power. Considering Pietermaritzburg and Midlands is not really the biggest part of SA’s industrial complex, you’re certainly punching above your weight. How long have you been in your current role?

Melanie Veness: I’ve been here for 13 years now, Alec. The Pietermaritzburg and Midlands Chamber has always had quite an influence at a national level. We’re one of the larger chambers in the country. I’m the current chairperson representing the chambers nationally at our national association, the Association of South African Chambers. That support certainly helps give voice to the issues affecting us.

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Alec Hogg: So you’re not just speaking for Maritzburg and Midlands, you’re talking nationally for business. Bloomberg reported this morning about the debacle at Transnet. From your perspective, you wrote a letter to Pravin Gordhan, as many others have done before.

Melanie Veness: The letter is really a precursor to engagement. The minister will meet with us to discuss the issues and understand the on-the-ground impact. We are hopeful for a positive outcome from this engagement. I wrote for our chamber and the Association of South African Chambers. Along with that letter, I also submitted letters from various chambers individually.

This isn’t just a KZN issue; it’s a country-wide problem of epic proportions. Professor Havenga said that Transnet might have lost R5.7 billion in its last financial year, but we lose around a billion rand daily due to its failures. It’s a catastrophe that must be dealt with.

Alec Hogg: Why haven’t big businesses stepped up? I know you represent all businesses, but it almost seems like Business Leadership South Africa and the government have a very cosy relationship. One would anticipate that they could leverage it more aggressively. Any thoughts on that?

Melanie Veness: I can’t speak for other business organisations, but the current crisis should definitely be on everyone’s agenda. We’re closer to the coalface and see the struggles of all businesses, from SMEs to large corporations. The inefficiency is costing us dearly, and it’s unacceptable.

Alec Hogg: Could you elaborate on the scale of the problem?

Melanie Veness: We’re losing about a billion rand a day because of Transnet’s inefficiencies. This is going to result in a 5% reduction in our GDP this year, which we can’t afford given our unemployment rates. Our ports rank extremely low globally, amongst the very worst in the world, which is totally unacceptable.

Alec Hogg: How many businesses you represent are dependent on imports or exports?

Melanie Veness: It would be more than 70%, which is already significant in South Africa. The lack of efficiency is holding us back, and I don’t understand why we’re okay with being this bad. The issues extend beyond ports; it’s a systemic failure that needs to be addressed urgently.

Alec Hogg: What has been the response to your efforts to engage on these issues?

Melanie Veness: The Durban Chamber has tried to bring solutions to the table, but they’ve met with complete resistance from Transnet ports. This is inexcusable.

Alec Hogg: Is there an underlying agenda in the poor management of Transnet?

Melanie Veness: The statement made about protecting road traffic over promoting rail was shocking. It makes one question whether there’s a deeper agenda at play.

Alec Hogg: Have you met with the Transnet CEO Portia Derby?

Melanie Veness: Yes, and if I were in her position, I would be mortified by the impact Transnet is having on the economy. Instead, there’s an unapologetic and even arrogant attitude, which is just bewildering.

Alec Hogg: Are you calling for a change in Transnet’s leadership?

Melanie Veness: While we can’t dictate the minister’s actions, we’re making our concerns known and expect him to address them. If that involves leadership changes, there’s just cause for it.

Alec Hogg: What about Transnet’s board of directors? The board lacks business experience and is filled with academics and politicians. Is this standard practice globally?

Melanie Veness: I shouldn’t think so. I would think that there would certainly be business representation on there. And I think it’s critical that there is. We can’t get kept on the outside of organisations that are holding our future ability to trade in their hands. It’s got to be a partnership. We’ve got to work together to get the best possible logistics industry for South Africa. It’s critical for all of us. If we don’t, how do we address our growth rates? How do we address our unemployment? It’s got to be a partnership and there’s got to be business representation.

Alec Hogg: In July it was announced that ICTSI, a Filipino company, is coming into the Durban port in a public-private partnership. There was quite a lot of celebration about that because it’s a serious company. Is this not what we’re seeing at the moment, just in anticipation of this organisation coming in and playing a role in improving the efficiencies of, let’s start with Durban Port?

Melanie Veness: Well, I think the sections that they will be taking control of are sections that are potentially profit-making for Transnet. So it’s the problem areas that their introduction to the port won’t address. And I don’t know enough about it to give a personal comment, but from the industry, that’s our feedback.

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Alec Hogg: That’s worrying. That’s not something that we, as the general public, have been enlightened on. So, the areas where the problems will continue to be very much being controlled by the incompetent cadres.

Melanie Veness: As far as I understand it, yes.

Alec Hogg: So what is your recommendation for a solution here? In your letter, did you have an agenda that you wanted to put forward to Pravin Gordhan so that he could look at things differently?

Melanie Veness: We just asked for an open discussion. He’s agreed to give us the time. So we are prepared to listen to whatever challenges they may have on their side but to put what we believe should happen on the table very frankly. We will have representatives of the logistics sector there that will put the potential partnership deals on the table that we, as the private sector, feel we could bring to the table to help address this in the short term. With the amount of money it’s costing us, we are interested in ensuring that we get that port as functional and efficient as possible in the shortest time. So I think there’s a lot of help out there. If there’s a willingness to accept that help, I think we can make a huge difference to the port and South Africa.

Alec Hogg: Why isn’t it going forward? From the outside looking in, you’ve explained it’s a crisis of epic proportions. As you say, any South African citizen can see the number of trucks on the road; you’ve mentioned 11 hours of waiting at the borders. Our ports are rated amongst the worst in the world. Why is there a reluctance even to listen?

Melanie Veness: That’s the part we find so difficult, so we’ve gone to the minister to say we can’t deal with this anymore. And we actually are not being given the respect the business community deserves, given the circumstances. So we need his intervention. Something’s got to happen now. It’s totally unacceptable. The leadership of Transnet should be falling all over themselves to partner with the private sector to solve these problems. After all, that is the mandate—to deliver world-class services so that we can compete internationally, not this abysmal position we find ourselves in here.

Alec Hogg: How far are you from the point where members will look at alternative geographies?

Melanie Veness: It’s already happening. Businesses will navigate the environment as long as they can navigate it. They will look for other ways to navigate it when it becomes untenable. We’re not the only show in town. Mozambique’s port is right there. Already, we have some complaints from Rebecca to say that, because of the delays at ports and the inefficiencies at the other ports, their port is getting bypassed, which means their product has to, at a huge cost, be tracked to other ports because they’re going to get missed. The implications for South African business are huge. And I’m afraid that if you are tracking somewhere else, then maybe if you have more efficiencies in Mozambique, that makes sense, which is just a crying shame for South Africa and our country. We are the busiest port; we handle 60% of our container traffic in Durban. It’s not acceptable that we don’t bring it up to all standards.

Alec Hogg: What are the Mozambicans doing that we South Africans are not doing?

Melanie Veness: I can’t comment on that because I’m unfamiliar with Mozambique ports. However, when you look at the top 30 ports in the world, technology and efficient systems manage them. They don’t experience the level of equipment breakdown we do. Frequently, we lack basic equipment like straddle carriers to load and unload the ships. It’s shocking management.

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Alec Hogg: So, the million-dollar question is, why has it taken so long for business to express this level of frustration?

Melanie Veness: That’s a good question. Honestly, we should have voiced our concerns long ago. It’s like boiling a frog; the situation gradually worsens until business reaches a boiling point. And we’re there now.

Alec Hogg: We saw a public response from Pravin Gordhan. Are you comfortable with what he said?

Melanie Veness: Yes, he acknowledges receipt of our correspondence and commits to meeting us to find solutions. It would be more meaningful to discuss the outcomes after that meeting and see if business is satisfied.

Alec Hogg: When is that meeting going to take place?

Melanie Veness: I believe it’s happening next week. A team is already coming down tomorrow before his visit, so I’m anticipating a good engagement.