Cash-strapped state-owned ports and rail operator Transnet has reached a three-year wage agreement with the South African Transport and Allied Workers Union (Satawu), securing above-inflation increases for workers despite the company’s dire financial position.
The deal, signed late on Wednesday after negotiations at Esselen Park near Kempton Park, grants employees a 17.5% cumulative wage increase over three years – far exceeding the current inflation rate of around 3%. The agreement includes raises to basic salaries, 13th cheques, pension contributions, medical aid subsidies, and housing allowances, effective from 1 April 2025.
The settlement follows a 10-day cooling-off period after Satawu and the United National Transport Union (Untu) rejected Transnet’s earlier proposal of 5.5% increases in the first two years and 5% in the third year. The final offer settled at 6% for the first two years and 5.5% for the final year.
Transnet, which reported a R2.2 billion loss in the six months to September 2024, described the agreement as “reasonable and fair,” balancing worker welfare with the company’s financial sustainability. However, the operator remains burdened by R100 billion in debt, with interest payments alone costing R1 billion per month.
Read | Transnet Port Terminals Claims Early Recovery After Worst Performing Operator Tag
Untu Holds Out, Threatens Strike Action
While Satawu has accepted the deal, Untu has refused, calling it “financial suicide” for workers in the current economic climate. The union has lowered its demand from 12% to 10% but insists on a single-year agreement, higher housing and medical aid allowances, and the removal of overtime caps.
“Accepting this offer would betray our members,” said Untu spokesperson Atenkosi Plaatjie. “We are prepared to mobilize our 25,000+ members and take to the streets if necessary.”
Any industrial action could disrupt port and rail operations, further hampering Transnet’s efforts to recover from years of mismanagement and state capture.
Satawu, however, hailed the agreement as a win for job security. “This deal aligns with our members’ demands and provides stability,” said spokesperson Amanda Tshemese. “We have stood firm and secured a fair outcome.”
Despite the breakthrough, concerns linger over Transnet’s long-term viability, with analysts warning that the company may need additional state support to remain operational.
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