The Siren Song of Localisation
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Thungela Resources, a major coal exporter which demerged from Anglo American in June, saw its share price fall last month when it reduced its production targets in response to poor rail performance. Thungela and most other big coal miners are stuck. Their masses of export coal have always moved through Richards Bay Coal Terminal (RBCT) by rail. Comments by Transnet CEO Portia Derby are revealing. Poor maintenance is a notable problem, while many of Transnet’s troubles relate to procurement, she said, adding that the challenge of procuring quickly and competitively in the state is “really huge”. While Transnet has introduced a new procurement policy to streamline the process internally, approvals are still needed from the Treasury and can be particularly challenging when something is designated.
For example, “track rails are not manufactured in SA and yet there is a designation that says we must buy them in SA. Now, you cannot imagine the time it takes to argue about that,” Derby said.
Dreadful example of the costs of an ill-considered localisation drive.
A recent Centre for Development and Enterprise sponsored paper shone a spotlight on the policy of localisation.
To talk about this Michael Avery is joined by Ann Bernstein, Executive Director of the CDE And Saul Levin, Executive Director of TIPS
For example, “track rails are not manufactured in SA and yet there is a designation that says we must buy them in SA. Now, you cannot imagine the time it takes to argue about that,” Derby said.
Dreadful example of the costs of an ill-considered localisation drive.
A recent Centre for Development and Enterprise sponsored paper shone a spotlight on the policy of localisation.
To talk about this Michael Avery is joined by Ann Bernstein, Executive Director of the CDE And Saul Levin, Executive Director of TIPS
