President the one to unbend Transnet’s rails

It is hard to accept Transnet’s version that more than 100 Chinese-made locomotives are lying idle due to the intransigence of China Railway Rolling Stock Company (CRRC). It sounds more like leadership ineptitude.

By way of background, a few years ago Transnet signed a multibillion-rand transaction to procure 1,064 diesel and electric locomotives to modernise its fleet. This was meant to tackle inefficiency and enable SA commodity exporters to take advantage of the next commodity cycle boom. But it was never to be.

Instead, the new Transnet leadership canned the transaction, arguing the deal was tainted by corruption. Quite rightly, the implicated executives were sacked, and are now being prosecuted.

Months later, though, Transnet’s corruption busters found they had taken delivery of locomotives from CRRC, but had no spare parts. As expected, the Chinese refused to supply these.

A few months ago, Transnet announced that it had reached an in-principle agreement with CRRC. This fell through. With no more cards to play, Transnet went to the market for the parts.

This incompetence has cost the economy billions. The Minerals Council SA has estimated the loss at more than R100bn and about R50bn to the fiscus. During the pandemic, the tax contribution of the mining companies made it possible for the government to sustain the R350 social distress grant.

Business has been frustrated, and has offered a helping hand. Instead Transnet’s management was defensive and sought to racialise the issue as big business being against transformation.

On Tuesday, Ramaphosa summoned Transnet’s leadership to call for the obvious: do your job, attend to your inefficiencies, expedite access of private sector players to rail and ports infrastructure, and work with business to sort out the mess.

Afterwards Transnet, curiously, announced that public enterprises minister Pravin Gordhan is to travel to Beijing for a political solution to the spares saga that Transnet blames on CRRC’s refusal to comply with tax and exchange controls authorities.

This is incredible. Despite their pretence to be commercial entities, Transnet and CRRC are wholly state-owned companies, making the dispute essentially a diplomatic one. The impasse has made a mockery of China’s bilateral relationship with SA.

Given the cost to the economy of Transnet’s mishandling of the spares issue, Ramaphosa not Gordhan should visit Xi Jinping, his Chinese counterpart, for a durable solution.

Meanwhile, though, the public and parliament deserve an explanation from the government and Transnet on the mishandling of this avoidable debacle, and why it took this long to escalate it to government-to-government level. If the explanation, assuming one exists, is found wanting, those responsible for this costly fiasco should be held to account.