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22/03/2013 (On-The-Air)

safm22march2013

22nd March 2013

By: Martin Creamer

Creamer Media Editor

  

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Every Friday morning, SAfm’s AMLive’s radio anchor Xolani Gwala speaks to Martin Creamer, publishing editor of Engineering News and Mining Weekly.  Reported here is this Friday’s At the Coalface transcript:

Gwala: South Africa as a whole, collectively needs to deal with the wildcat strikes that are impacting on the country.

Creamer: Yes, this is top of the mind for business at the moment. You can see them losing money. You can see the interim results coming through Aveng down R123-million, 23%, on the impact of this on their business. It’s big and small, also the Post Office strike that is hitting a lot of small business and big ones across the board and we’ve got the coal strike as well. So people are saying ‘Look, come together now and put your minds together’, because this isn’t a single company situation. It’s not as if it’s some HR department that needs to sort this out. These are macroeconomic issues and social issues and we need the South Africa incorporated to come to the party here and I think Business Leadership South Africa, hopefully, is doing a lot of work on this. Perhaps they’ll put out some statement soon because that is needed. It’s an integrated stakeholders approach that people are calling for and they coming up with new innovations looking for a new social compact totally but also looking at what happens elsewhere in the world and we know that two-tier system in Germany, they’ve got the supervisory board and they’ve got the executive management board. The supervisory board is non-executive and can have up to a 50% union representation or worker representation so it is actually co-determination, there’s worker co-determination, and that is also some of the aspect that can be introduced along with the overhaul of the Act because people are saying that this doesn’t just need tinkering, it needs a complete overhaul of the Labour Relations Act.

Gwala: A new survey has confirmed that South Africa is declining, the manufacturer competitiveness is declining in this economy.

Creamer: Yes, this is the 2013 Global Manufacturing Competitors Index and again it’s bad news for South Africa as it slips two points to 24, there are only 38 countries, which are part of this Deloitte and US Council of Competitors survey. China, Germany and the US are on the top and Greece, Ireland and Egypt are at the bottom and at 24th now, it’s us, South Africa, but the bad news is that the expectation is that we’ll keep slipping down because of the factors that we are facing here. The whole issue of unions just refusing to link wage increases to productivity. The fact that costs are mounting. The biggest concern is the low levels of productivity and lack of technical skills and people are saying ‘Look we might have to really look to bringing these skills into the country if we not going to lose more ground’ because the feeling is that the country will lose more ground. We talking about small and big companies here in the South African survey, it’s 76 companies. Some of them only employing 100 people and some of them employing 5 000 people plus and they are all coming through with leading concerns the cost of labour, the availability of skills, can’t cope without these necessary technical skills and the availability of materials. Where is the rest of the world? The top tier people are way in the clouds and their biggest problems are finding talent for innovation. How do we keep competing when they’re at such a high level and we are slipping down? So urgent, decisive action is needed to make sure that South Africa doesn’t lose its manufacturing competitiveness, on which we see a lot of slippage.

Gwala: Eskom is now openly sharing with the national regulator, the risks of the new Medupi Power Station coming in late

Creamer: This Medupi Power Station, the flagship of South Africa. The biggest project since South Africa’s democracy. The expenditure on this is four times more than the Gautrain, and the expenditure on this is six times what we spent on the 2010 World Cup. This is the flagship, looking at it now, people have been saying, ‘We have got to stick to that deadline’ and at the end of December, unit 6 must come in and now we can already see that Eskom is sharing with the regulator, the energy regulator Nersa, that there could be slippage and there’s a risk, obviously they want to keep that target of December 2013, but there’s a risk that this will slip to February 2014, and little wonder with seven weeks of strike there. Still an unsettled site and welding problems have been picked up. Both onsite and in the workshop welds. These now having to be repaired and the financial director of Eskom going on to site, Paul O’Flaherty, wanting to check himself, with engineering expertise from abroad, so that quick decisions can be taken, because it’s going to be a tremendous pity if this can’t go commercial – our first big democratic project from the democratic South Africa – not going ahead, it’s going to set a bad message for the country and people are doggedly sticking to it but saying there is a risk of slippage.

Gwala: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly, he’ll be back At the Coal-Face at the same time next Friday.

Edited by Creamer Media Reporter

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