The Department of Transport (DoT) prides itself in stating transport is the “heartbeat of South Africa’s economic growth and social development”.
The Road Freight Association (RFA) notes that this must be borne out in the direction and commitment shown by Minister of Finance, Enoch Godongwana – especially with regard to prioritising spending and focusing on fiscal control with a clear understanding of the country’s transport requirements.
This is the first opportunity for the government of national unity (GNU) to effect long-term behavioural change and direction in spending and budgeting, which will greatly influence future prospects of the economy.
We come from an era of very poor fiscal control, coupled with waning growth and development underpinned by the loss of global and local business confidence. This recipe can only result in a failed national economy.
This is why the critical ingredients of fiscal control and discipline, prudent investment and support of entrepreneurial growth through business germination policies must be added now.
It is common knowledge that a plethora of political, social, economic and institutional challenges has dwarfed the enthusiasm of government. However, opportunities to change the status quo and an abundance of fresh approaches and ideas to resolve challenges far outweigh these recent events.
Attract global businesses
The association reiterates its call that government needs to invest in infrastructure, equipment, processes and cooperative platforms to make South Africa the place businesses from all over the global market would want to be, in an environment where they can grow, flourish, develop, enhance and research their products and processes, and then efficiently deliver these to customers across the world.
Government spending in areas where no value or real service delivery accrues, at an ever-increasing quantum, realising over 230% since 2008, must be reversed – or at the very least quantified in terms of benefit to revenue into the country.
The public sector wage bill has mushroomed by 220% since 2008, and this has had no effect other than raising state employee wages, without the increase in service delivery. Sovereign debt had increased to R5.2 trillion by 2024 with another addition of R365 billion being projected for 2025. South Africa cannot continue to service such rapidly increasing debt levels.
It's no secret that the logistics supply chain is under threat, with Transnet and its subsidiaries holding the monopoly on key aspects – ports and railways – of the supply chain.
Government is acutely aware of the status quo, even having gone so far as establishing the National Logistics Crisis Committee (NLCC).
Maintenance backlogs
Transnet’s high debt of around R230 billion and its maintenance backlog of around R70 billion are among the most serious stumbling blocks to its recovery plan as reported to the Parliamentary Portfolio Committee on Transport earlier this month.
Transnet told the committee there were significant rail infrastructure maintenance backlogs for all networks estimated at R51.4bn for network restoration, and R19.2bn to sustain costs related to the core network.
Declining asset conditions have resulted in reduced network capacity, poor reliability of key corridors and declining port and rail volumes.
E-tolls
The RFA notes the references to some transport projects – notably the Gauteng Freeway Improvement Plan (GFIP), and vague references to passenger transport and the Passenger Rail Agency of South Africa (Prasa) with a fleeting nod to developing landside facilities at the Port of Cape Town.
There was no mention of any immediate action to deal with the equipment at our ports – which almost singularly cripple operations, nor key handling and infrastructure to ensure rail moves bulk commodities.
It does not come as a shock then, neither a wondrous revelation, that the Minister of Finance needs to take into consideration the dire state of the State-run logistics monopoly in so far as the ports, rail, pipelines and airports are concerned.
The government must either heavily invest in these modes under sound direction from the private sector, or transfer these ailing facilities, infrastructure and networks to the private sector to ensure the logistics chain does not collapse.
Time is short
Solid funding, with clearly defined deliverables, clearly identified accountable entities and individuals and a networked plan to ensure the development of freight nodes, villages, pathways, routes and chains will ensure the gradual and enhanced development of a nuanced and intertwined co-operative logistics supply chain.
This will drive the economy and grow business, increase employment and provide the foundation for a quantum leap in trade efficiencies and capabilities.
Apart from R5 billion earmarked for Sanral there are no allocations to address the dire straits our ports and rail find themselves in. Perhaps this is so the private sector can play a larger or more efficient and involved role in getting our logistics network back on track.
We haven’t much time to resolve this. Even more worrying – we don’t have the financial depth required to reverse the decay. Road won’t be able to carry this indefinitely – huge investment in terms of maintenance, refurbishment and development will soon come knocking there too.
A realistic, sober and considered MTBPS – but a concerning one in terms of the future of transport networks and the logistics supply chain of South Africa.
