Transnet — ‘We are confident in the integrity of our procurement processes’

20 Nov 2024

Transnet spokesperson Ayanda Shezi responds to Daily Maverick journalist Ray Mahlaka’s recent article on the state-owned company’s application to increase port tariffs and delays in its plan to partner with private sector players.

Transnet has noted the article by journalist Ray Mahlaka, titled After the Bell: Blunder after blunder by Transnet relegates SA to world’s worst port operations.

For the benefit of Daily Maverick readers, Transnet finds it necessary to address the following factors, which we would have dealt with had we been afforded an opportunity to comment prior to publication.

Tariff application

Transnet National Ports Authority’s (TNPA’s) tariff application is guided by the Ports Regulator of South Africa (PRSA) process commencing on 1 August every year. The PRSA is the body responsible for the economic regulation of South Africa’s commercial ports, regulates port tariffs and ensures fair competition among port operators.

The tariff application for the financial year 2025/26 was prepared in compliance with the tariff methodology and tariff strategy as approved by PRSA and outlines the tariffs that TNPA can charge for various port services in the interest of a fair and reasonable tariff regime.

An appropriate tariff regime enhances TNPA’s economic competitiveness and investments in critical infrastructure and new technologies. TNPA plans to spend capital of R20.47-billion over the next five years on port infrastructure and other related assets to improve its service offering to customers and position South African ports as efficient gateways to global markets.

Given the relatively long lead time associated with port infrastructure investments, TNPA’s current priorities include timeous execution of capital projects focused on sustaining critical port infrastructure while expanding port facilities in support of future economic growth.

TNPA is actively addressing challenges experienced around its marine fleet availability which operationally has negatively impacted on the turnaround times of vessels entering and leaving our port system. The recent commissioning of seven new tugboats for the Ports of Durban and East London as well as emphasis on maintaining other marine craft is expected to improve efficiencies in the port system.

TNPA continues to monitor port terminal operators including Transnet Port Terminals (TPT), ensuring improved loading and offloading of cargo, thereby contributing to quicker ship turnaround times of vessels.

TNPA has identified inefficiencies with some of our terminal operators due to port equipment failures and investment backlogs. Intervention plans to address these inefficiencies have been developed by the respective terminal operators, with TNPA once again monitoring the timeous delivery hereon.

The TNPA is responsible for the safe, efficient, and effective economic functioning of the national ports system. In a broader context, the Authority also undertakes to facilitate the development of trade and commerce through market collaboration for the economic benefit of the economy. The delivery on this mandate, as encompassed within the Ports Act, is dependent on appropriate tariffs to be agreed between TNPA and the Ports Regulator, which allows for investment in owning, managing, controlling and administering ports; fair costs recovery and risk-related returns, ensuring the financial sustainability of the entity.

The detailed tariff application for the financial year 2025/26 submitted by TNPA, including other related correspondences, is available on PRSA’s official website.

Transnet’s tender processes

As far as comments about Transnet’s procurement are concerned, we are confident in the integrity of our procurement processes. The selection of International Container Terminal Services Inc (ICTSI), as the preferred bidder for the 25-year joint venture with TPT to develop and upgrade the terminal followed a lawful, competitive, fair and transparent process.

The delays which have come about as a result of the legal challenge are regrettable. Transnet remains committed to private sector participation and looks forward to the swift conclusion of the legal challenge. To expedite the process, Transnet has also – as previously reported – sought to have the matter heard sooner rather than later.

Transnet is working hard to uphold the highest standards of integrity and accountability. Integrity is the cornerstone of our organisation, and we will not hesitate to act against anyone who engages in corrupt practices.

Our integrity unit focuses on detecting, preventing and investigating fraud and corruption within the organisation. It has an in-house investigation function supplemented by external support where necessary, which handles all allegations of fraud and corruption and supports law-enforcement agencies. It also manages whistle-blowers and their information.

Finally, integrity and ethical conduct are hallmarks of supply chain management at Transnet. The Transnet Supply Chain Management Policy has enforceable mechanisms to prevent supply chain-related fraud and corruption, avert and reduce irregular and/or fruitless and wasteful expenditure as well as other financial infringements.

We continue to encourage reporting of any transgressions, so Transnet can take the appropriate action. DM

Ayanda Shezi is GM: Group Corporate Affairs, Transnet.

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Tariff application

Transnet’s tender processes