Transnet on Friday announced an impasse in wage negotiations as two unions raised the prospect of a strike that could further paralyze the state-owned logistics company and affect Africa’s most developed economy.

Transnet is operating at reduced capacity due to a lack of locomotives, poor maintenance, vandalism and theft of infrastructure, costing miners billions of rand in potential revenue.

Transnet said in a statement that the wage dispute was formally announced with the South African Transport and Allied Workers Union (SATAWU) and the United National Union of Transport Workers (UNTU) following negotiations that began in May.

Transnet said unions had rejected its offer of a 1.5% pay rise for staff, excluding health and housing benefits.

“Their position remains unchanged from previous rounds of wage negotiations, with a demand for a 12% increase in guaranteed annual wages, as well as other demands leading to an overall increase in labor costs of 21%,” Transnet said.

UNTU general secretary Kobus van Vuuren told Reuters his union, which he said was the majority at Transnet with more than 50% of the workforce, had rejected Transnet’s offer because it was well below the inflation rate of 7.8% on an annual basis. year in July.

He said the formal declaration of the dispute allowed a 30-day “cooling off period” for further negotiations with Transnet.

“However, if the parties do not reach a compromise, this will allow the labor unions to go through a voting process where members will determine whether or not we can take protected industrial action,” van Vuuren said.

SATAWU called Transnet’s offer “an insult” but said it remained open to further negotiations.

“SATAWU wants to emphasize that the strike is not our priority. However, at this stage, the employer is forcing us to go this way,” the message reads.

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