KZN Xmas season in jeopardy with port and road disruption warns KBCC’s Paul Ngema

Kwazulu-Natal, a province that has weathered numerous crises, faces yet another challenge. Emerging from the aftermath of the Covid-19 pandemic and the July 2021 riots, which resulted in an estimated R50 billion in damages, and the 2022 floods causing around R17 billion in infrastructure damage, the province now grapples with paralysis at Durban and Richards Bay ports. This has led to significant road congestion, with no immediate solution in sight. Transnet estimates that clearing the backlog in Durban could take until February or March 2024. Further compounding the province’s woes, the northern section of Durban’s golden mile coastal strip remains unsafe due to E.coli, impacting the tourism industry. In an interview with BizNews, Paul Ngema, Chairperson of the Kwazulu-Natal Business Chamber Council (KBCC) and President of the National African Chamber of Commerce and Industry (NAFCOC), expressed concern that the port backlog could result in businesses missing out on the Christmas rush. Ngema also highlighted the deteriorating railway system and its impact on small and medium businesses that heavily rely on this cheaper mode of transport. He warned that the port crisis and resulting road congestion could deter South Africans from visiting KZN beaches for Christmas, potentially leading to a bleak holiday season for the province. – Linda van Tilburg

Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.

Watch here

Relevant timestamps from the interview

00:08 – Introductions
00:46 – Paul Ngema on if the KBCC is the regional version of NEDLAC
01:59 – On the issues with the roads and the ports in KZN
09:06 – How does this affect the festive season and Businesses
12:03 – There might be less traffic down to KZN this festive season
13:40 – What pressure is being put on Government and SOE’s to address this problem
16:38 – Conclusions

Listen here

Edited excerpts from the interview

By the time harbours removes backlog, the Xmas rush will be over

This situation doesn’t only impact businesses, but also consumers. If goods aren’t delivered on time, the cost is often passed on to consumers. One of the largest shipping companies is already charging a congestion surcharge due to the long wait times for their fleet of ships. This isn’t good for our economy or our province. When you’re here, you don’t need a study to see what’s happening, especially along the sea. When you drive from Richards Bay to Durban, you can see a number of ships queuing up to reach the Durban harbour. When you see such a long queue, you know something is wrong.

All these pile-ups have knock-on effects on how we do business, both with the outside world and within our own borders. We have such beautiful roads here. Good road infrastructure should be matched with a properly functioning rail system, which we currently lack.

Read more: 🔒 RW Johnson: Springbok mania obscures real question – will rugby itself be abolished?

I remember when we took over the country from the apartheid regime about 29 years ago. We inherited a functioning rail system, which we expected to maintain because it’s always cheaper by rail. But now, some of our business colleagues have to resort to air cargo, which is very expensive. All these costs will be passed on to consumers who need these products.

The paralysis has affected all sectors of the economy. You can talk about manufacturing. Provinces all over the country have started slowing down production because goods cannot be exported. We need to export more and rely less on imports. I’m told 70,000 containers are lying offshore at the Durban Harbor, still to be offloaded and I’m told it’s going to take until March before everything returns to normal. By that time, people will have missed the Christmas rush. The circulation of money is good for the economy, for consumers, and for us as business people. If we have nothing to sell, it affects us all. This cuts across the entire value chain.

Rail underinvestment, inefficiency, and leadership deficit: The root causes of the crisis

This issue stems from years of underinvestment in the rail system. Small and medium businesses, in particular, rely heavily on the rail system because it’s cost-effective. Unfortunately, the powers that be have allowed the system to deteriorate to a point where it’s no longer usable.

While it’s often said that the equipment at the harbours is old and needs to be replaced or serviced, and there’s a shortage of locomotives, I believe the problem isn’t just about the equipment. It also has to do with efficiency and leadership capacity, which are crucial.

Read more: Memoir of a murder, a mistress, the mafia – and the mother who sacked him – with Lew Geffen

As we approach the festive season, the state of our roads could pose a safety risk for motorists. As business people, we benefit greatly from domestic earnings, especially in our province, Kwazulu-Natal, which leads the country in terms of domestic travel and tourism.

During the festive season, people tend to move towards the sea. However, some might be reluctant to go come to Durban due to the current situation. This will impact tourism in our city, Durban, and other towns along the coast of Kwazulu-Natal.

Many people have already booked their holiday destinations well in advance, planning to spend the festive season by the coast. This situation will undoubtedly affect us as business people, particularly those in the tourism, restaurant, and hotel industries. It will also impact the economy of our province at large.

Truck road congestion could deter holidaymakers from the north

Without a doubt, the current situation could have a negative impact on traffic from the north to the Kwazulu-Natal coast over the Christmas period. People might choose to avoid the roads due to the issues at hand.

Transnet and the national police authority are doing their best to address the situation. However, the media coverage of the state of paralysis in our province, particularly with regard to the ports, does not paint a positive picture. Since our ports are linked to our beaches and other attractions, some people might be discouraged from travelling to the coast.

Especially for those coming from other directions, like Mpumalanga and Limpopo, the sight of a 10-kilometre stretch of trucks lining up to reach the port could raise safety concerns. This could potentially have a negative impact on the tourism industry.

Rail cannot be revived without private sector involvement

From time to time, we engage with the government and state-owned enterprises, as the Kwazulu-Natal Business Chamber Council and NAFCOC are stakeholders of Transnet to discuss the issues at ports and with rail. We are aware of the problems.

The issues have grown so large that they may be beyond immediate resolution. It necessitates private partnership. Without private partnerships, I don’t see how the state-owned enterprise, Transnet, can survive. There has been significant neglect, particularly of the rail system.

We believe that they cannot revive and run the rail system without attracting interest from the private sector. We communicate with them regularly. They have developed numerous master plans over time to manage the influx of freight by road, which has increased due to the non-functioning rail system. In our discussions with Transnet, we have urged them to collaborate with the private sector. They do listen to us, but the problems have become so large that they cannot be resolved immediately. They project that the offloading of the ships lying offshore from the Durban Harbour will only be completed by March.

As chambers, we cooperate with them. The Kwazulu-Natal Business Chamber Council, where all the chambers are represented, keeps us informed about the situation. We also try to offer solutions.