S.Africa transport strike fizzles, more protests loom

South Africa's transport sector strike that paralysed the country's ports and railways is likely to be resolved by Friday.

S.Africa transport strike fizzles, more protests loom

South Africa's transport sector strike that paralysed the country's ports and railways is likely to be resolved by Friday, but another protest looms at state power utility Eskom ahead of the World Cup.

The transport strike, in its second week, has dented exports of metals, cars, fruit and wine to Europe and Asia and hit imports of vehicle parts and fuel supplies just three weeks before the start of the World Cup in June.

By holding the strikes close to the World Cup, workers may be holding state-owned entities to ransom ahead of the soccer event being held on the continent for the first time.

A series of industrial actions in the past few weeks have attracted criticism from economists and the central bank who say the workers are using the World Cup to push for wage hikes above inflation of 5.1 percent.

They say this could hamper the South African economy's ability to recover from its first recession in 17 years.

"Unions appear to be pushing their pre-World Cup leverage to the hilt, and the (President Jacob) Zuma administration is facing this pressure with a fairly weak hand," Eurasia Group said in a recent note.

A threat by the two-million-strong COSATU trade federation to hold a nationwide strike over power price increases during the soccer event could also add pressure on Zuma, while a flare-up of violent protests by the country's poor for better housing and jobs may worsen matters.

The threat of a strike by a large number of workers at Eskom over a long-standing pay dispute starting next Wednesday could disrupt power supply in Africa's biggest economy.

Striking transport workers are under pressure from government to end the strike, while the workers themselves are feeling the pinch because they are not paid while on strike.

Economists have estimated losses in the hundreds of millions of rand, but this would rise to billions if the strike dragged on, and it may take weeks to clear the backlog at the ports.

 

Miners affected 

The strike has hurt global firms with units in South Africa.

Anglo American Plc, Xstrata and the world's top steelmaker ArcelorMittal have declared force majeure on the supply of iron ore, ferrochrome and steel respectively. Transnet also declared force majeure on coal destined for export.

So far coal exports to power plants in Europe and Asia have not been affected because of stocks at the Richards Bay Coal Terminal which are enough for about two weeks, traders said.

The strike appeared to fizzle after the United Transport and Allied Trade Union (Utatu), which represents the majority of workers at Transnet, said most of its members favour a proposed pay deal, and would resume work on Friday.

Smaller union South African Transport and Allied Workers Union said it needed more time to gather the votes of its members on the proposed agreement.

The new offer raises the minimum wage, and gives a one-off payment and a promise to hire more contract workers on a permanent basis, but the wage rise is unchanged at 11 percent.

Both unions -- which represent 85 percent of Transnet's 54,000 workers -- had initially wanted a 15 percent wage raise.

An agreement to end a parallel strike affecting millions of commuters may be signed on Thursday, Utatu said, but with an agreement that an outstanding issue would be settled by June.

Reuters

Last Mod: 20 Mayıs 2010, 20:00
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