National infrastructure “mixed model” not working

National infrastructure “mixed model” not working

The time has come to rethink the way national infrastructure – such as ports, railways and Telkom – are run because the present “mixed model” is not working, says the Cape Chamber of Commerce

and Industry.

“Operating the ports like a company has given us the highest port tariffs in the world at the same time as creating a bottleneck for exports which the World Bank says is now stifling economic growth,” Janine Myburgh, President of the Chamber.

“We know that Transnet used the ports as a cash cow and we must now ask what this has cost the country in terms of exports, economic growth and jobs. Would we be better off with the old model where Transnet was virtually a government department and not a ‘company’ designed to reap massive profits for its shareholder, the Government?” Myburgh asked.

Another option was to finally break the monopoly by privatising some operations to ensure that there was competition to force prices down. Peter Hugo, Chairman of the Chamber’s Transport Portfolio Committee, said a similar situation existed in the air.

“We have a monopoly airports company which makes huge profits while SAA, which does have competition, makes huge losses. On the other hand, Comair, which operates in the same market, and has to pay the same airport charges, is a viable and tax-paying business.”

A further problem was that the state companies, with the possible exception of the Airports Company, seemed to lack enterprise.

“We can see this in the ports where the oil and gas industry has created huge opportunities, but it is Namibia that is setting the pace with the expansion of facilities in Walvis Bay and plans for a whole new port. Transnet has been very slow to take advantage of the situation,” Mr Hugo said.

Myburgh said Telkom was another problem area. “It has failed to deliver opportunities to businesses by making the last mile accessible to competitors. This again points to the problem of having a 'managed liberalisation' agenda where government is a shareholder, with a vested interest in maximising profits and limiting competition."

She said the Chamber did not pretend to know all the answers but it was clear that a review of the way state companies had been commercialised and how they were operating, was long overdue.

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