A closer look at the shipping industry

WHEN the Operation Phakisa Oceans Economy was launched in July 2014, it ushered in an era of great enthusiasm, and hope for our emerging businesses that have long been excluded from this very strategic industry.

However, as we fast-forward to the end of 2022, the hope remains but the enthusiasm has all but dwindled.

The promise of a R177 billion economy and more than 1 million jobs has not materialised. We can however count small wins like the development of a world-class Cruise Terminal in Durban.

Many young people have also been trained in professional and technical skills relevant to the maritime industry.

However, most of them remain unemployed or working in industries other than the maritime industry. Many Enterprise Development programmes were completed with participating graduates looking forward to seeking their fortune in this industry, with naive optimism.

A concession was awarded for an Offshore Oil and Gas Hub that has yet to bear the fruits of its outcome.

There were many shipbuilding projects and upgrades of existing infrastructure but these projects would have been done in any event as they are critical to efficient operation of the port systems.

It becomes counter-productive for the private sector to perpetually criticise the lack of progress in the implementation of Operation Phakisa; it should become part of the solution through a close co-operative and collaborative partnership with the public sector.

A few weeks ago, I did a joint press conference with the mayor of the eThekwini Municipality, where we promised the municipality would work tirelessly to ensure Durban has a bumper festive holiday season by ensuring our beaches, which had high levels of E coli due to sewage leaks from waste water treatment plants that were damaged in the floods, are clean and safe.

A member of the maritime business community has offered to support the municipality with their ship hull cleaning machine that can act as a temporary wastewater treatment plant that will clean the wastewater, while allowing the municipality to undertake repairs to existing waste water treatment plants.

It remains to be seen whether the municipality will accept this private sector-driven solution to salvage our tourism industry.

The recent strike by Transnet employees also demonstrated how a close working relationship between the private sector and public sector can minimise economic damage.

It was the best communication and engagement process I’ve ever witnessed in my business career. It resulted not only in the private sector being willing to bring in financial support to Transnet to avoid a prolonged and costly strike, but in creative and innovative ideas from the private sector.

We cautiously welcome recent amendments to the Preferential Procurement Policy Framework Act (PPPFA) that takes away the burdens of subcontracting to SMMEs that only resulted in increasing the costs of provision of goods and services in the maritime industry.

Too often front companies were used that didn’t achieve the transformation objectives this endeavour sought to achieve.

In fact, it gave rise to illicit business forums that demanded 30% of contracts at the expense of legitimate black owned SMMEs, who were marginalised.

We note with concern the removal of the local content clause in public procurement as a result of this amendment. This has the potential to decimate the local manufacturing industry.

The PPPFA does however give authorisation to the procuring entity to stipulate in the Request for Proposals Local Content and BBBEE conditions, but it’s not mandatory.

It therefore creates the opportunity for corrupt public sector employees to enter into relationships with unscrupulous local and international private sector organisations, to import capital goods from subsidised countries.

It is imperative that the Department of Trade, Industry and Competition and the Department of Transport play their oversight role to ensure local content is maximised.

I believe by fostering closer relationships between all stakeholders in the maritime value chain, we can bring in efficiency, lower the cost of doing business and present our country as a preferred investment destination and restore our positioning as the premier port city on the African continent.

In all of this, we need to leave no one behind, especially the emerging businesses and the well-trained maritime professionals who were sold the dream of Operation Phakisa and the Oceans Economy Master Plan.

Like those early explorers who left their countries in search of new lands and fortunes, and persevered despite many failures, so we too shall arrive at the promised land. ¡¡

Maharaj is the president of the Durban Chamber of Commerce and Industry

PRASHEEN MAHARAJ