DA calls for an urgent Parliament inquiry into the crisis at Transnet

26 September 2023

The DA has written to the Chairperson of the Portfolio Committee on Public Enterprises, Khayalethu Magaxa, recommending that the Committee sets up an urgent inquiry into the crisis unfolding at Transnet with a view to developing a roadmap to recovery that would stabilize the entity, save the economy and protect jobs.

Our call has been prompted by the lack of decisive leadership from the Minister of Public Enterprises, Pravin Gordhan and even President Cyril Ramaphosa himself, into the terminal crisis at Transnet that has essentially become an existential threat to the national economy.

Parliament must step in to fill the leadership vacuum before Transnet sends the economy over the cliff and spawns a socio-economic crisis never before seen before the dawn of democracy. We would be failing in our duty as legislators if we sit back and watch the economy go to ruins when it is clear that Ramaphosa and Gordhan are unwilling or simply unable to stop the bleeding at Transnet.

The Parliament inquiry will provide a diagnosis of what has gone wrong, the role played by pre-identified actors in perpetuating the crisis and the granular interventions that must be implemented to fix Transnet.

In order to establish the origins of the leadership failure across the value chain, the inquiry must invite Ramaphosa, Gordhan and the entire Transnet executive to account before the committee. The inquiry should also invite Transnet clients who will testify on how the entity’s failings have affected their businesses and the country’s entire export sector.

As pointed out by industry insiders, Transnet is at the center of South Africa’s import/export economy which amounts to 68% of the country’s GDP. By continuously failing to meet the transportation needs for some of the country’s major exporters, who contribute substantial tax receipts to the fiscus, Transnet has significantly contributed to the country’s precarious public finances.

Independent estimates have concluded that Transnet inefficiencies are likely to knock 5% off GDP in 2023. As a consequence, jobs along the value chain are now at risk with projections showing that 35 000 jobs could be lost.

Last week, the DA proposed 5 key interventions at Transnet to stabilize the situation in the medium term, namely – firing Transnet CEO Portia Derby, opening of Transnet corridors to exporters, integrated law enforcement, moratorium on red tape and development of a long term recovery strategy. With Gordhan failing to heed the advice, it is now up to Parliament to step in and save the economy from the brink of collapse.

Issued by Ghaleb Cachalia, DA Shadow Minister of Public Enterprises, 26 September 2023