The biggest labour union at South Africa’s State-owned port and rail company are starting final talks with a third-party arbitrator to resolve a wage dispute and stave off a potential strike by thousands of workers.

Should the talks taking place at the Commission for Conciliation, Mediation and Arbitration on Wednesday and Thursday fail, the United National Transport Union (UNTU) — which represents more than half of the more than 46 000 employees at Transnet — will issue a 48-hour strike notice, UNTU said in a statement.

Members of the union this week approved “taking to the streets” to have their wage demands met, UNTU said.

UNTU rejected an offer by the company to increase pay by 6% over the next two years and 5.5% in the third year, instead demanding 10% in the first year alone. The smaller South African Transport and Allied Workers’ Union accepted the pay offer in March. The nation’s annual inflation slowed to 2.7% in March.

The wage dispute comes as Transnet works to recover from years of corruption, theft and deal with dilapidated equipment that has posed a key threat to the South African economy and its exports. Inefficient rail lines and ports have sent coal and iron-ore exports to multi-decade lows and cost the nation more than R400-billion in 2022, according to the Treasury.

A World Bank study ranks key ports run by Transnet, which has R138-billion of debt, among the least efficient worldwide.