MBOMBELA – Palabora Copper’s sudden termination of one of the biggest bulk road-freight contracts in South Africa, has created an economic slide down a slippery slope along the previously truck-heavy trade route between Phalaborwa and Maputo.
Lowvelder previously reported that Palabora Copper (PC) had terminated road-freight contracts due to a lack of profitability for the company.
Metreta Investments was the major stakeholder in this contract with a 70 per cent share and has felt the economic consequences which have resulted in the company needing to retrench 31 of the 49 employees who were previously involved in this contract.
Mr Jan Bekker, commercial director and Ms Moya Lesia, business development director at Metreta, spoke to this publication to emphasise their concern not only for the various beneficiaries in the communities along the trade route, but also for sustained economic viability in the Lowveld.
“The economic situation has hit an all-time low. Communities are uncertain what the future holds and the drivers employed from Bushbuckridge currently fear they will lose their jobs,” stated Bekker.
This economic pressure has now also created a snowball effect in the communities. According to Bekker and Lesia they had initiated the set-up of small transport companies for the Phalaborwa, Bushbuckridge and the Nkomazi chiefs all along the trade route from Phalaborwa to Maputo as part of their small enterprise development initiatives.
“We assisted with finance, project management and we trained them to be sustainable and to develop new skills. The tragedy is that this has ended abruptly,” added Lesia.
Initially, PC approached Metreta in 2011 to arrange road freight for them.
Towards the end of 2013, tenders were needed in view of the size of the contract. PC then awarded the tenders to Metreta and Senetema Investments with the former gaining a 70 per cent and the latter a 30 per cent share of the tender.
In June and November last year, Palabora Copper had informed Metreta that the magnetite price had dropped and requested that measures needed to be put in place to decrease their road- transport rates.
Without prior notice a bombshell was then dropped on Metreta and other stakeholders in early December.
“Our final rate reduction proposal was sent to PC but they did not reply. The next email we received was a contract-termination notice after a phone call from PC. They gave us a 30-day notice period which made it difficult for us to redeploy 400 trucks in 30 days. It was just logistically impossible,” said Bekker.
The contract cancellation also affected other important community services. “We had safety and security patrol bakkies but have now suspended that service due to current economic constraints.
“The safety and security patrol bakkies assisted the police tremendously and our guys also assisted with numerous accidents,” mentioned Lesia.
According to Lesia, a proper warning period should have been issued which would gradually have given stakeholders time to do a systematic retrenchment.
“There are still a lot of solutions that we are working on at Metreta to improve and empower the communities. It is vital that the skills that they have been taught will now be implemented. There are so many opportunities that has now been halted with the termination of this contract,” concluded Bekker.
