Volume 10, No.3 - May 2001

A victory for all the people

Transport - the key to an integrated economy and society

By Jane Barrett, SATAWU policy research officer

Next time you open up your lunch box during a work break, think how many transport movements it took to get the food you're eating to you.

At least some of the ingredients will have come from a farm, where crops and livestock were moved by tractor. The farm labourers will have been transported to work. The food will have been transported for storage or slaughter, and then again for processing or packaging.

It may have gone from processing to a wholesaler, and then to a retail outlet. It will have been transported to your home by whoever did the shopping in your family, and then finally you transported it in your scaf tin to work!

Transport is the cement that integrates and binds production, trade and consumption in any society.

And yet the social and strategic significance of transport as an integrating factor is so often under-estimated. So what is the shape of the transport sector in South Africa?

The transport, storage and communications sector has been steadily growing for the past 15 years. In 1999 it made up one tenth of South Africa's Gross Domestic Product (GDP). This calculation excludes the contribution of in-house and private personal transport, as well as the entire taxi industry.

If these activities were included, the sector's contribution to the GDP could be as high as 13%. The economic importance of transport, storage and communication in South Africa compares favourably with most other developed economies.

Another measure of the sector's economic significance is that in 1999 it accounted for 16% of all new investment - a total of R18,6 billion. Investment in transport and communications has been climbing sharply since 1997, compared to a decline in investment in the manufacturing and financial sectors.

The cost of transport adds to the price of all goods sold. In South Africa it amounts to between 1% and 7% of the price of most commodities. Despite the importance of transport in the economy, it is not in itself overall a profitable sector.

The bus sector is presently making losses and the road freight sector is making marginal profits. The general freight business of Spoornet is presently loss making, although its bulk freight divisions (carrying coal and iron ore) are profitable. Air transport in South Africa is reasonably profitable.

Freight transport

In October 2000 there were 31,032 private-sector road freight vehicles (i.e. operating for reward, not owned and operated in-house), a 6,5% increase on 1999.

The commercial rail network in South Africa totals 20,000 km, excluding the thousands of kilometres of rail within the boundaries of factories and mines but nevertheless linked to the main state-owned network. 2,500 locos and 95,000 goods trucks operate on the main network.

In 1999 private road hauliers transported nearly 434 million metric tons of freight, compared to 180 million metric tons transported by rail. Spoornet's proportion of the freight market dropped 1% between 1994 and 1999. In 1999 Spoornet carried 29% of all freight, excluding bulk metals and minerals (especially coal and iron ore) carried by Spoornet. If this tonnage is included then rail carries around 59% of all freight.

Until the mid 1980s the use of road transport to move freight was highly regulated by a permit system, whose purpose was to restrict the use of road freight transport and force the use of rail.

The Department of Transport (DOT) has repeatedly said it will not consider re-regulating road freight transport but try to shift more freight on to the railways by clamping down on overloading by freight hauliers, imposing higher taxes on road use, and so on.

SATAWU is concerned that, despite government's public pronouncements about the importance of rail freight, the use of rail will decline rapidly if government accepts the recommendations of its various advisors who have recommended that Spoornet's profitable coal and iron ore lines should be contracted out (concessioned) and that many branch lines should also be concessioned out or allowed to close down. Only the big customers are recognised as important to keep.

SATAWU has proposed that the rail network should be kept as an integrated state-owned entity, and that the emphasis should be on strategies to increase overall volumes, rather than concentrating only on the already dense lines. It sees much potential at a provincial level for using rail for socio economic development.

The union has been closely involved in a project headed by the Eastern Cape government to improve the rail link between Umtata and East London so that wool, wheat and timber can be transported in bulk for export from East London port. SATAWU has also made a range of proposals to Spoornet management about making the rail network more efficient.

Urban passenger transport

South African workers spend much more of their wages on transport than workers in most other countries, mostly because of the apartheid practice of building townships far from industrial and commercial centres.

Although government has made a commitment to reduce the cost of public transport, the reverse is actually happening. The cost of living measured by the Consumer Price Index rose by 7,1% between November 1999 and November 2000. Passenger transport costs rose by 12,4% in the same period.

According to DOT statistics in its Moving South Africa report, 38% of the population walk, cycle or do not travel, 48% use public transport and 14% use private cars, with a small overlap between those using public transport and those using private cars.

Bus passenger transport

25% of commuters use buses. There are currently around 8,600 subsidised buses and 1,800 unsubsidised privately & publicly owned buses. In 1996 buses carried over 460 million passengers. The government introduced a new system of subsidisation three years ago, based on competitive tendering. Provincial tender boards put out tenders for routes and the winning bidder receives a subsidy based on the final contract.

SATAWU has experienced endless problems from competitive tendering - including job losses, reduced employment conditions, and widespread contracting out. Passengers have suffered poor service delivery as a result of cost-cutting, staff shortages and unsafe buses on the road.

The overall budget for bus subsidies has been considerably cut. Therefore many tenders put out by provinces are for much-reduced routes and frequency of service. In Cape Town a tender has recently gone out for operating a bus service that offers half the routes and frequencies previously offered. If government persists with this tender, SATAWU believes Cape Town is again sitting on a public transport time bomb. The union has called on government to review the competitive tendering system.

Minibus taxis

There are an estimated 120,000 minibus taxis on the road, carrying 58% of all commuters. The proposed taxi recapitalisation process, whereby minibus owners may hand in their old taxis and receive a direct grant towards a newly designed (and bigger) vehicle has been much publicised. SATAWU has in principle supported taxi 'recap', as part of a process to regulate employment in the industry, and to ensure greater levels of driver and passenger safety.

But the process has slowed down; it is likely that voluntary implementation will only start in early 2002. The selection of manufacturers has still to be completed, and full details of how the new vehicles will operate (e.g. passenger ticketing, parking etc) are still being worked on.

SATAWU and NUMSA are working together to monitor and give input into the final phases of the formulation of the recap programme. The new vehicles are only likely to be compulsory in about five years time.

Metrorail

17% of all commuters use the Metrorail system. In 1996, 4519 commuter and mainline train coaches carried 470 million passengers.

Metrorail has been much in the news lately for a succession of accidents and incidents such as the burning down of Pretoria station by frustrated commuters. SATAWU blames a lot of Metrorail's current problems on a lack of investment, poor management systems, and the outsourcing of many functions including security.

The union has welcomed the recent announcement by Minister Omar that Metrorail will not be concessioned (at least not at this stage). All SATAWU's international research has shown that concessioning of urban rail transport results in lower safety standards, poorer service and job losses.

Organising commuters

SATAWU believes many of the problems in commuter transport will only be solved once commuters are well organised. The South African Commuters Organisation (SACO) has headquarters in Johannesburg, but does yet have a mass base. SATAWU would like to see COSATU locals playing a big role in mobilising workers as commuters - either into SACO, or by establishing their own commuter committees.

The workers in transport

Formal employment in transport, storage and communications in September 2000 was 221,552, excluding the minibus taxi industry, where there are approximately 80,000 employed workers (i.e. not owner/drivers).

The sector employs 4,7% of the total formal workforce of 4,7 million. In 1981 there were 383,143 formally employed workers in the sector - 7,8% of all formal employment. So the total number of workers in the sector has declined over the past twenty years both absolutely and as a proportion of the overall workforce.

The biggest loss of transport jobs has been in Transnet. In 1980 the then SATS employed 266,403 workers. Transnet's total workforce is now just under 100,000, with 43,000 of these employed by Spoornet and the rest spread amongst the other business units.

Given the growth in the sector's contribution to GDP, the reduction in worker numbers suggests a massive rise in productivity in the sector.

There are presently 18 registered trade unions in the sector, of which SATAWU is by far the biggest, with 100,000 members.

Road building and maintenance

The national DOT is responsible for 6,000 kms of national roads, and the provinces for 176,000 kms. There are 43,000 kilometres of urban roads and an unknown distance of rural community access roads, with estimates ranging from 100,000 to 200,000 kms, with at least two thirds in urgent need of repair. The DOT is currently auditing the state of rural roads and preparing recommendations for selected areas.

The state of roads is critical to the cost of road transport. A poor surface can double costs of maintaining and running a vehicle. A really bad road, like many of the rural access roads, will add much more to vehicle maintenance. There is a backlog of R40-R57 billion on road maintenance and building nationally. The road system is currently spending R3, 3 billion a year less than it needs to simply keep it in its current state.

While President Mbeki's announcement of government intention to step up investment in transport infrastructure, including roads is welcome, it is doubtful if the commitment goes far enough to redress the current situation.

Historically South Africa has had no medium- to long-term planning on road infrastructure. There has been fragmented planning and spending between the different levels of government. Massive fluctuations in road building and maintenance spending have impacted extremely negatively on the construction industry.

Road accidents

In recent years there have been around 10,000 road deaths a year. Half of them are pedestrians. Each fatal accident costs the country on average half a million rand in emergency services, lost productivity and so on. Each serious accident costs on average of R100, 000.

The total annual cost of fatal and serious accidents to the economy is therefore a staggering R12 billion. Given the huge impact that road accidents have on our economy, the Arrive Alive Campaign should not be seen as a frivolous activity.

Transport and international trade flows

As South Africa's exports to the rest of Africa increase, so the export volumes moving by road and rail are increasing. However the bulk of South Africa's imports and exports still move by sea to the primary markets and sources of Europe and Asia.

Shipping and ports

Approximately half of shipped exports, by value, are containerised. However less than 10% of the weight of exports is containerised, because of the huge volumes of coal, metals and minerals that are exported in bulk. The volume of containerised exports has increased by 27% since 1994, indicating a substantial increase in the export of goods that are manufactured or processed in some way.

There are seven import/export ports, with Durban the busiest port in Africa, operating at over 100% capacity. A typical container moving from Gauteng to Durban by road and rail takes approximately 36 days to reach its port of destination in Europe. The shipping leg of South Africa's exported commodities accounts for an average of 60% of the overall cost of transportation.

Ironically as export volumes increase, so the cost of the shipping leg is likely to increase. This is because at present South Africa enjoys favourable export shipping rates, because there is a lot of empty container space for exports compared to imports, as more goods are coming in than leaving the country.

The DOT is currently drawing up a draft ports policy. Already the port operations and port authority functions of Portnet have been split, with the authority division playing the official role of landlord.

Indications are that government intends privatising Portnet's port operations. President Mbeki, in a television interview after his State of the Nation address, argued that privatisation would result in lower transport input costs, and that lowering these costs was critical to arriving at international competitiveness for exports.

SATAWU is convinced that there are more effective mechanisms for lowering costs, including adjusting the various tariffs and charges and that many efficiency measures could be introduced in the ports under state operation.

Taking control over shipping rates through the promotion of a shipping fleet, owned and registered in South Africa, would also contribute to lowering international transport costs. The few ocean vessels that remain in South African hands are registered in other countries under Flags of Convenience.

Road and rail exports

Increasing volumes of freight are being exported by road and rail within Southern African and Africa in general. As with shipping, the imbalance of trade impacts on the operational effectiveness of transportation and distorts transport prices.

Border delays are a major problem in transporting goods into and from South Africa by road and by rail. A truck can often sit at Beit Bridge for three days, for example, adding enormously to transportation costs.

SATAWU has discussed with its counterpart transport unions throughout the SADC region, and the unions collectively have made many practical recommendations to speed up border crossings, including very simple ones like standardising the forms used by different countries.

Conclusion

The facts presented are enough to show that even though transport has no visible product, it nevertheless plays a significant economic role. They hopefully also demonstrate that it is no good improving limited aspects of the transport system and ignoring the rest, like spending millions improving our ports' export facilities if hundreds of thousands of rural women are still spending up to eight hours a day transporting fuel and water on their heads - time that could be so much more productively spent.

The importance of transport as an integrated system is one reason why SATAWU is so opposed to the privatisation of the railway, ports and air transport networks. If the entire sector is left to competition, the capacity of government to ensure a balanced and integrated approach to transport will be undermined.

At the end of the day it will be working-class passengers (workers, pensioner, school children etc), small businesses trying to move their goods, emergent farmers and others who will suffer most.

International Railway Workers' Action Day, 29 March

"Safety before profit"

On 29 March, the International Transport Workers' Federation called for action by all railway workers to popularise the importance of railways. The central call was "Safety before profit - Our railways are not for sale". Railway workers in over 40 countries took part in the Action Day which included a 24-hour strike of underground railway workers in London, UK.

In Pretoria a memorandum (see below) was delivered to the Minister for Transport, Dullah Omar. In Eastern Cape a group of workers rode on a "rail trolley" from East London to Umtata to popularise a proposal to re-vamp the East London - Umtata rail link. Leaflets were distributed in six languages throughout the country.

Safety and service before profit

Memorandum from SATAWU to the Minister of Transport and the Minister of Public Enterprises On International Railway Workers' Action Day,

March 29 2001 Safety and Service before Profit 29 March has been designated International Railway Workers' Action Day by the International Transport Workers' Federation. The focus of the day is railway safety, in the context of trends in railway restructuring.

We the members of SATAWU urge you to take seriously the weight of international evidence on the relationship between declining railway service and safety standards, and railway restructuring that takes the form of privatisation, outsourcing and contracting out of functions.

In every country where restructuring has taken these forms, service and safety standards have declined. The evidence is there - from Argentina to the UK, from Canada to Australia, from New Zealand to Brazil, and from Japan to Cote d'Ivoire.

Rail is one of the safest and most environmentally efficient ways to travel on land, and we in SATAWU and in railway workers' trade unions worldwide want to keep it that way.

We in SATAWU want to see the reconstruction of our railways, for the good of all our people. Our proposals are concrete and we believe they make sense. We demand that you give them proper consideration.They are:

Government must continue to clamp down on overloading by road freight trucks and must charge road users more. Railway workers, through SATAWU and the other railway unions, must be fully consulted on investment decisions. You will be surprised how much technical and operational knowledge railway workers have!

Above all, make sure that any decisions about the future of our national railways are made after full public consultation, not only with us as workers, but with the community at large. Workers, passengers and freight customers alike all deserve to have a say!

In the deliberations that are currently taking place between you and the leadership of our union and the other railway workers unions, we urge you to take on board all of the above proposals for serious consideration.

We demand that you leave no stone unturned in finding agreement and a national consensus on the future of such an important national asset. In searching for consensus we also demand that there should be no short cuts and no unreasonable deadlines set. Forward to a national consensus on the future of our railways, in the interests of jobs, safety and service!