BL Premium reports that Transnet group CEO Portia Derby says the rail and ports utility will have to reprioritise its operating budget to allow for the extra increases they awarded to striking workers a few weeks ago.
After a two weeklong strike by employees in October, during which Transnet was forced to declare force majeure, the company finally agreed to offer its employees a 6% increase in year one, a 5.5% increase in year two and a 6% increase in year three plus increases to medical and housing allowances, to entice them back to work. The new wage deal is expected to have the net effect of increasing its already huge wage bill which accounted for 66% of operating costs before the strike. The R5.8bn allocated to Transnet in October’s medium-term budget policy statement will not go to cover these additional salary costs but to pay for the repair of infrastructure damaged by the April floods in KwaZulu-Natal and the Eastern Cape, and to maintain freight rail locomotives. The funds are also expected to increase locomotive capacity. “The big drive right now is to find a way to reduce costs and increase revenue on the other side, which we are prioritising,” Derby indicated. “We were able to look at our long-term contracts to see if there are opportunities to pass through some of these increases,” she added. The industrial action cost mineral exporters R815m in lost revenue as bulk mineral exporters were unable to load goods onto rail to the ports.
- Read the full original of the report in the above regard by Thando Maeko at BusinessLive (subscriber access only)
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