The Minister of Public Enterprises, Pravin Gordhan, said on Tuesday that he has noted the correspondence from the Association of South African Chambers (Asac) in which its members have called for decisive action to resolve the issues affecting the economy because of Transnet’s underperformance.
Last week, the Durban Chamber of Commerce and Industry wrote a scathing letter to Gordhan calling for the removal of Transnet CEO Portia Derby and her executive team.
Transnet has been making headlines due to its woes as the parastatal reported a R5.7 billion loss for its 2023 financial year. Transnet released its financial results three weeks ago, in which it posted a massive loss due to the volumes delivered by its freight rail business dropping 13.6% during the period, from 173 million tons to 149 million tons.
The parastatal cited power supply disruptions, cable theft, and floods in KwaZulu-Natal as the reasons for its poor performance.
The poor performance led Gordhan to instruct the newly appointed Transnet board to look at methods to turn around the entity’s woes.
According to the ministry, the correspondence from Asac followed a directive that Gordhan gave to the board of Transnet about three weeks ago to urgently make recommendations to address a range of operational shortcomings facing the state-owned freight and logistics company.
“The recently announced annual financial results of Transnet have made it very clear that the entity urgently requires serious interventions that will address the root causes of the deficiencies that are having a negative impact on our economy and are hurting our export competitiveness,” Gordhan said.
“The board is seized with the injunction that I have given it, and I am sure that the issues that have been raised by the chambers will be addressed in its recommendations or in the feedback that the board will present to the shareholder. The shortcomings of Transnet are of national concern,” he said.
According to the ministry, the issues that Gordhan directed the board to report back on include the operational transformation of Transnet, to develop a plan to radically transform the operational performance of each of the business areas, including the restructuring of the entity.
At the time, Gordhan said the board needed to identify the root causes of the inability of management and staff to meet the performance targets and a plan to deal with the deficiencies.
“I am confident that the board understands the scale of the challenges that are confronting Transnet, and I can assure the South African public that the board has my full support in its effort to come up with the requisite remedial actions. We will be engaging the chambers,” Gordhan added.
Meanwhile, labour union UASA yesterday welcomed the National State Enterprises Bill published by Gordhan for public comment.
The bill aims to move state-owned companies (SOCs) from operating as line departments and shield them from political interference by doing away with the Department of Public Enterprises.
Gordhan stated that the bill’s main objectives were to provide SOCs with the ability and means to raise capital from the markets, minimise political interference and separate the state’s regulatory functions from its ownership functions.
“UASA believes this is a step in the right direction, given the amount of taxpayer bailout money that government has pumped into SOCs with no tangible investment returns on record,” it said.
BUSINESS REPORT