Transnet. Picture: Supplied
Johannesburg - The fictitious new dawn tale that President Cyril Ramaphosa sold to South Africans continues in a tailspin, evident in the escalating management crisis and deterioration of performance at the state rail and port company Transnet.
The Mineral Council SA (MCSA) has run out of patience and is set to place a new demand on Ramaphosa’s desk for “an urgent Ministerial intervention in the crisis” at Transnet. The big mining industry players have called for the dismissal of Transnet Group CEO Portia Derby. They also warned that any possible solution should be left to external experts since the company's board could not also take over the reins.
The MCSA envisioned that the intervention could see the establishment of a structure similar to the National Energy Crisis Committee - which has also, ironically, failed to bring the crisis of load shedding in national power utility Eskom under control since its creation in July last year as the country sets new records for power blackouts.
“It is critically important to state that the current and deteriorating Transnet rail and port performance is a crisis and requires very urgent leadership attention. This crisis represents an existential crisis for the South African bulk commodity mining sector and is on par with the Eskom crisis,” MCSA president Nolitha Fakude said in a letter to Transfer board chairperson Popo Molefe, dated 5 December last year.
Derby was parachuted into Transnet's top position at the insistence of public enterprises minister Pravin Gordhan, without participating in interviews to find the most suitable candidate. From the interviews the Transnet board’s preferred candidate was Patrick Dlamini, then the CEO of the Development Bank of Southern Africa.
Gordhan told the media then that claims of his interference in the appointment of Derby were simply attempts to disrupt the process of appointing a CEO with the required skills to continue rooting out corruption and state capture at Transnet. He said the board followed due process in its recruitment search and recommended its preferred candidate for his consideration.
The Sunday Independent understood that Derby owed her continued stay at Transnet to finance minister Enoch Godongwana, who was firmly in her defence. In August last year, Godongwana reported that Transnet was steadily improving its performance and had made progress in improving its financial position to enable increased investment.
Godongwana blamed the challenges with both the ports and rail infrastructure on “security issues, inadequate investment in equipment, procurement processes that were tainted by state capture, and poor operational performance”.
Derby landed at Transnet in February 2020 with dramatic changes at the company’s top management level. These changes raised fears of a purge as the targeted executives constituted a key part of the company’s institutional memory, and their exit came at a significant cost.
In the new dawn mantra, Transnet is among the key state-owned enterprises that will help revive the ailing South African economy. The company is critical to making South Africa commercially competitive by providing and maintaining key economic infrastructure through our ports, rail and pipeline networks. These infrastructures facilitate the efficient movement of goods from where they are produced.
Among her key performance indicators, Derby was expected to strengthen the company, restore its integrity and reputation and refocus Transnet back to its core mandate. This also included the revival of Transnet infrastructure and significantly improving operational efficiencies at the ports and freight systems.
In the letter last month to Molefe, the MCSA called for the replacement of Derby, together with Transnet Freight Rail (TFR) CEO Sizakele Mzimela, “with properly qualified and experienced rail freight leaders”.
Fakude said council members had “lost confidence in the existing Transnet leadership team, and we do not think that they have the capability to turn around the current crisis. The industry held a view that the leadership of Transnet is failing,” she said.
“It is critical that the Transnet Board considers the urgent appointment of well-experienced and senior leaders to drive Transnet SOC and TFR at the earliest convenience”. MCSA members account for over 80% of TFR business and 50% of the total business of Transnet.
She said: “We would like to reiterate that urgent short-term interventions are required to slow down the deterioration in the Transnet performance. As much as we are engaging with your board, we do not believe that going into another long-drawn-out engagement with the Transnet Board and the MCSA will solve the issue, hence we require much more urgent Board action on the crisis”.
“Further, we do not believe that the Transnet SOC Board should take over the role of management, but that following critically required changes to management, the new management team should be bolstered by industry experts who can technically resolve many of the issues the channels are facing,” she continued.