Who will pay for Transnet wage deal?

The 8.5% wage settlement reached by Transnet recently has raised concern among organised business who believe it will lead to even higher port costs, result in an economic slowdown and make the country less attractive to investors. Chairman of the Cape Town Port Liaison Forum, Mike Walwyn, says the wage settlement could lead the transport utility to ask the Port Regulator for higher increases in port tariffs for 2012. “Transnet asked for around 11.91% but got 4.4% for this year. Eventually the chickens will come home to roost,” he says. Last year the Regulator approved an increase of 4.6% although Transnet had asked for 10.9%. He says given the swift settlement one wonders how tough the negotiations were. A strike at Transnet over wages last year resulted in losses estimated at R1 billion. Transnet group chief executive Brian Molefe said the agreement would have significant impact on morale and productivity. However, Walwyn says it is likely that the money for increased costs will have to come from somewhere – and the most likely incomegenerator would be the ports. Therefore, he argues, with South Africa already charging the highest port fees in the world, there should be a moratorium until parity is achieved with nations around the world. Walwyn says organised business is concerned that having been spared the harmful effects of another strike, port fees will rise again. Kevin Martin, head of the Durban Harbour Carriers’ Association, says any wage increase will push up port fees, and there was a view among people in the industry that they would be forking out more for services they would not receive. Following the announcement of the agreement, President of the Cape Chamber of Commerce, Michael Bagraim, said the decision would not be good for business. He says the 8.5% wage increase is unaffordable and will cost the country dearly in terms of real growth and job creation. On Monday Transnet spokesman Mboniso Sigonyela was unable to comment on the percentage increase that Transnet would be seeking from the Regulator.