Latest news with #OperationVulindlela
Mail & Guardian
4 days ago
- Business
- Mail & Guardian
Operation Vulindlela: Big on policy but low on results
Mixed bag: President Cyril Ramaphosa's Operation Vulindlela is stronger on policy than implementation. Photo: GCIS The government's flagship economic reform programme, Operation Vulindlela, has registered modest progress in the second phase of its roll-out — particularly in visa reform — but faces mounting criticism for delays in key infrastructure areas and a lack of transparency in outcomes and expenditure. The latest These visa reforms aim to 'attract skills, investment and tourism through a streamlined and modernised visa system'. The home affairs department has also upgraded its digital verification system to enable remote authentication and reduce downtime — a step toward building a digital identity system. Yet the gains made in visa systems are in contrast to widespread delays in fixing constraints in water and sanitation, electricity and freight logistics. Most work so far has been legislative, with little tangible implementation. Operation Vulindlela, initiated during President Cyril Ramaphosa's first term, aims to boost economic growth through structural reform. Ramaphosa has touted the operation as a key achievement, and in his latest 'The reduction in load-shedding over the past year was supported by the reforms we introduced to unlock private investment in electricity generation, while reforms in the telecommunications sector have brought down the cost of mobile data,' he wrote. Launched in May after cabinet approval, But despite policy work being under way in several areas — with the Electricity Regulation Amendment Bill, the Water Action Plan, the Digital Transformation Roadmap and the Local Government White Paper among the documents drafted — implementation remains limited. The progress report itself concedes that of the seven priority areas in phase two, only visa reform has moved into tangible outcomes. The electricity sector reform includes the establishment of the National Transmission Company of SA, which will eventually separate power utility Eskom's grid from generation and distribution. The government has also finalised a national wheeling framework to enable third-party access to the grid. Yet, the new transmission company still awaits licensing as a market operator. The National Energy Regulator of SA is also finalising market codes for private wholesale. Legal adviser and social activist Nkanyiso Ngqulunga was scathing in his assessment, saying Operation Vulindlela represents an acceleration of neoliberal policies that are proving counterproductive. 'It has been a complete failure. The unbundling of Eskom has not yielded any positive results but rather put the country's energy generation into the private sector,' Ngqulunga said, adding that the reforms have not attracted the promised investment. 'It hasn't attracted investment as intended. We are implementing policies that have been proven to fail — allowing the private sector in with the hope that it will boost the economy is counterintuitive.' Ngqulunga believes the government should focus on building state capacity and investing in public infrastructure. 'We need to unlock opportunities by empowering public assets,' he said. 'At a time when the government is underperforming, geopolitical tensions are high and tariff wars are growing, it's misguided to think these reforms will attract investment.' In logistics, a new Transnet Rail Infrastructure Manager division has been created to modernise operations and enable private operator access. In December, the rail, port and pipeline parastatal released network access tariffs and received 98 slot applications from private freight operators. Conditional awards will be announced by 15 August. Ntokozo Buthelezi, an economist and researcher, is concerned about the Vulindlela initiative's accountability. 'I remember from the budget speech, the minister mentioned phase two and I wondered what happened to phase one,' she said, adding that she found it to be 'vague' with regard to outcomes and money spent. 'We don't know what happened, how much was spent and what the outcomes were. There is so much secrecy — we have no clue as the public on how investment and loans are spent by the government,' she said, also criticising the absence of oversight. 'They don't tell us much. It's just numbers — billions here, billions there — but no tangible outcomes.'
IOL News
21-07-2025
- Business
- IOL News
S&P downgrade exposes Transnet's operational crisis as reform efforts stall
The decision by S&P Global to downgrade Transnet's credit rating was disappointing news. Image: File The decision by S&P Global to downgrade Transnet's credit rating was disappointing news for those of us in business eager to see the utility performing better. This downgrade is not just a reflection of Transnet's financial distress – it is a damning indictment of years of failed leadership, union militancy and a government that continues to bail out state-owned enterprises without demanding fundamental reform. S&P believes that Transnet is burning cash without the prospect of turning around its operating performance and that Transnet Freight Rail will fail to reach its volume targets. The business has high fixed costs, major capital expenditure requirements and significant debt. S&P's downgrade reflects its concern that its ability to service that debt is weakening. The rating agency's assessment is that Transnet is 'entirely dependent on state support' and faces 'sizable negative free operating cash flow'. When a company burns through R13.5 billion annually in negative free cash flow while its workers receive 6% pay increases – double the inflation rate – we are witnessing a textbook example of unsustainable economics enabled by government guarantees. S&P is calling out what has become clear to many of us – Transnet is seemingly resisting change and moving too slowly. This compares to Eskom, which has been able to stabilise its operating performance and is pushing forward deep and fundamental reforms. The solution is not more bailouts or government guarantees. It's time for National Treasury to attach strict conditions to any future support – conditions that enable the private sector competition that Transnet desperately needs. The recent progress in separating rail infrastructure from operations, driven by Operation Vulindlela is a start, but we need to move much faster. Private sector partnerships in ports and rail concessions must be accelerated. Companies are ready to invest in our logistics infrastructure, but they need certainty that political interference and Transnet's resistance won't undermine their investments. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. 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Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Fixing the logistics crisis is one of the focus points of the business-government partnership. Through the National Logistics Crisis Committee there has been some progress – ports have reduced backlogs and key rail corridors have seen some volume improvements. But the fundamental issues remain and the pace of reform has slowed just when it needs to be accelerating. When business met with a senior government delegation led by President Ramaphosa in January, there was a strong commitment to accelerating reform to deliver economic growth. When the logistics workstreams fell behind on key targets, we met again in May and agreed to a focused three-month sprint to catch up. That sprint needs additional impetus. There are critical structural reforms that must be advanced, particularly enabling third party participation in rail and ports and operationalising the economic regulator that will regulate the logistics system for all. Also, as S&P makes clear, there is an urgent need to improve the operational performance of Transnet, from improving security to ensuring the availability of rolling stock, to fixing infrastructure. The plans to do all this through a partnership between the public and private sectors are in place, but either through intransigence or coordination failures, we haven't been able to implement them. The S&P decision should be a wake-up call – Transnet is going in the wrong direction and we need to act urgently. Transnet cannot continue as if it is business as usual and President Ramaphosa needs to act to get the agreed reforms implemented fast. Road Accident Fund I welcome the decisive action taken by Transport Minister Barbara Creecy in disbanding the Road Accident Fund board. This bold step represents the kind of leadership we desperately need to confront institutional dysfunction head-on. The RAF serves a critical function as our safety net against the devastating financial impact of road accidents, yet its track record of mismanagement has become a national embarrassment. With the Special Investigating Unit now conducting a broader investigation at the minister's request, we have an opportunity to root out the rot that has spawned endless litigation and operational chaos. South Africa deserves an RAF that operates with transparency, maintains clean books and delivers efficient service to those who need it most. This same no-nonsense approach must be extended to other state insurance entities that continue to fail our people. The Unemployment Insurance Fund and Compensation Fund have become synonymous with bureaucratic incompetence and public frustration. When Business Unity South Africa called for the UIF to be placed under administration late last year, it was because workers were being denied timely access to benefits they had rightfully earned. Similarly, the Compensation Fund's failure to adequately support workers suffering from occupational injuries, illnesses, or workplace fatalities represents a betrayal of our most vulnerable citizens. While Labour Minister Nomakhosazana Meth has initiated necessary leadership changes, these institutions remain far from delivering the world-class service standards our people deserve. Every successful reform sends a powerful signal that we are serious about creating institutions that serve with integrity, efficiency, and accountability. The private sector stands ready to support this transformation, but government must lead with the courage to make hard decisions and the commitment to see them through. All South Africans depend on getting this right. Business Leadership South Africa CEO Busi Mavuso. Image: Supplied Busiswe Mavuso is the CEO of Business Leadership South Africa. *** The views expressed here do not necessarily represent those of Independent Media or IOL. BUSINESS REPORT
The Citizen
21-07-2025
- Business
- The Citizen
S&P Global exposes Transnet's operational crisis as it fails to meet targets
The rating agency's assessment is that Transnet is "entirely dependent on state support" and faces "sizable negative free operating cash flow". S&P Global's downgrading exposes Transnet's operational crisis as reform efforts stall, and it fails to meet its volume targets, burning cash at R13.5 billion per year. This shows how important it is for government to attach strict conditions to future bailouts and accelerate private sector partnerships in ports and rail concessions rather than continuing unconditional support. Busisiwe Mavuso, CEO of Business Leadership South Africa (BLSA), says the decision by S&P Global to downgrade Transnet's credit rating was disappointing news for business in the private sector eager to see the utility performing better. 'This downgrade is not just a reflection of Transnet's financial distress but a damning indictment of years of failed leadership, union militancy and a government that continues to bail out state-owned enterprises without demanding fundamental reform.' She points out that S&P believes Transnet is burning cash without a prospect of turning around its operating performance, and that Transnet Freight Rail will fail to meet its volume targets. 'The business has high fixed costs, major capital expenditure requirements and significant debt. S&P's downgrade reflects its concern that its ability to service that debt is weakening.' Mavuso says that when a company burns through so much cash every year, resulting in negative free cash flow, while its workers receive 6% pay increases at double the inflation rate, we are witnessing a textbook example of unsustainable economics enabled by government guarantees. ALSO READ: Transnet capitulating to unions shows lack of leadership on both sides – BLSA S&P calling out that Transnet is resisting change, moving too slowly 'S&P is calling out what has become clear to many of us: that Transnet is seemingly resisting change and moving too slowly. Compare Transnet to Eskom, which has been able to stabilise its operating performance and is pushing forward deep and fundamental reforms. 'The solution is not more bailouts or government guarantees. It is time for National Treasury to attach strict conditions to any future support, in the form of conditions that enable the private sector competition that Transnet desperately needs. The recent progress in separating rail infrastructure from operations, driven by Operation Vulindlela is a start, but we must move much faster.' Mavuso says private sector partnerships in ports and rail concessions must be accelerated as companies are ready to invest in our logistics infrastructure. However, they need certainty that political interference and Transnet's resistance will not undermine their investments. 'Fixing the logistics crisis is one of the focus points of the business-government partnership. Through the National Logistics Crisis Committee, there has been some progress as ports reduced backlogs and key rail corridors saw some volume improvements, but the fundamental issues remain, and the pace of reform has slowed just when it needs to be accelerating.' ALSO READ: Creecy punts private sector investment for five rail and port corridors Another meeting with government due to slow progress at Transnet She says when business met with a senior government delegation led by President Cyril Ramaphosa in January, there was a strong commitment to accelerating reform to deliver economic growth. 'When the logistics workstreams fell behind on key targets, we met again in May and agreed to a focused three-month sprint to catch up. That sprint needs additional impetus. 'There are critical structural reforms that must be advanced, particularly enabling third-party participation in rail and ports and operationalising the economic regulator that will regulate the logistics system for all. 'Also, as S&P makes clear, there is an urgent need to improve the operational performance of Transnet, from improving security to ensuring the availability of rolling stock, to fixing infrastructure. The plans to do all this through a partnership between the public and private sectors are in place, but either through intransigence or coordination failures, we have not been able to implement them.' Mavuso says the S&P decision should be a wake-up call that Transnet is going in the wrong direction. 'We must act urgently. Transnet cannot continue as if it is business as usual, and President Ramaphosa must act to get the agreed reforms implemented fast.' ALSO READ: Outa welcomes dissolving of RAF board and cancelling of license card tender Business welcomes disbanding board of RAF She also welcomes the decisive action of transport minister Barbara Creecy in disbanding the Road Accident Fund (RAF) board. 'This bold step represents the kind of leadership we desperately need to confront institutional dysfunction head-on. 'The RAF serves a critical function as our safety net against the devastating financial impact of road accidents, yet its track record of mismanagement has become a national embarrassment. With the Special Investigating Unit (SIU) now conducting a broader investigation at the minister's request, we have an opportunity to root out the rot that has spawned endless litigation and operational chaos. 'South Africa deserves an RAF that operates with transparency, maintains clean books and delivers efficient service to those who need it most.' Mavuso would like to see the same no-nonsense approach extended to other state insurance entities that continue to fail South Africans. 'The Unemployment Insurance Fund (UIF) and Compensation Fund have become synonymous with bureaucratic incompetence and public frustration. ALSO READ: Call for intervention in 'horror show' at Compensation Fund and UIF UIF and Compensation Fund need same kind of decisive action 'When Business Unity South Africa called for the UIF to be placed under administration late last year, it was because workers were denied timely access to benefits they had rightfully earned. Similarly, the Compensation Fund's failure to adequately support workers suffering from occupational injuries, illnesses, or workplace fatalities represents a betrayal of our most vulnerable citizens. 'While labour minister Nomakhosazana Meth initiated necessary leadership changes, these institutions remain far from delivering the world-class service standards our people deserve.' She points out that every successful reform sends a powerful signal that we are serious about creating institutions that serve with integrity, efficiency and accountability. 'The private sector stands ready to support this transformation, but government must lead with the courage to make hard decisions and the commitment to see them through. All South Africans depend on getting this right.'
Eyewitness News
21-07-2025
- Business
- Eyewitness News
Ramaphosa says SA's economic reform agenda will create conditions for higher growth
CAPE TOWN - President Cyril Ramaphosa says the country's economic reform agenda will create the conditions for higher growth. Ramaphosa said the progress report on Operation Vulindlela, which is government's initiative to accelerate economic reform, shows steady progress. Ramaphosa was writing in his latest newsletter, where he gave an update on government's efforts to turn the economy around. In the first quarter of the year, South Africa's economy expanded by a marginal 0,1% compared with the fourth quarter of 2024. But Ramaphosa said they'd made some headway in clearing obstacles that have held back the country's growth agenda. He said these include the reduction in load shedding over the past year, which was supported by reforms to unlock private investment in electricity. Ramaphosa said they're moving at pace 'towards a competitive electricity market, which will introduce greater competition in electricity generation and reduce the chances of experiencing load shedding again'. He said government had also reduced the turnaround times for approval processes for water use licences and energy projects. Ramaphosa said the measures were 'common sense reforms' that would preserve public ownership of key infrastructure while introducing greater competition and investment.
IOL News
21-07-2025
- Business
- IOL News
Energy, rail and visa reforms at heart of SA's growth plan, says Ramaphosa
President Cyril Ramaphosa highlights steady progress through Operation Vulindlela, saying reforms are unlocking growth, creating jobs, and modernising infrastructure across energy, logistics, telecommunications, and local government services. President Cyril Ramaphosa says the government's ambitious reform programme, Operation Vulindlela, is steadily unlocking South Africa's economic potential by addressing longstanding constraints to growth and investment. In his weekly newsletter to the nation, Ramaphosa highlighted that the initiative is already delivering tangible results and ushering in a second wave of reforms to accelerate inclusive and sustainable development. 'We established Operation Vulindlela in the Sixth Administration to remove the binding constraints that have long held back our economy's growth: an unreliable energy supply, inefficient rail and ports, high data costs, and a visa system that had deterred investors and tourists,' he said Ramaphosa noted that reforms in key sectors are already yielding positive outcomes. Load shedding has been significantly reduced, thanks to measures that opened electricity generation to private investment. In the telecommunications sector, reforms have led to lower mobile data costs. Licensing processes for energy and water projects have been streamlined, and the visa backlog has been substantially cleared, with the eVisa system expanding.
