Transnet new permanent group CEOs took the helm at key state-owned enterprises this week to lead the implementation of structural reforms.
This comes after Cabinet on Thursday appointed former Afrox and Sasol manager, Xolile Sizani, as the new CEO of the state-owned oil company PetroSA, nearly a year-and-a-half after parting ways with Pragasen Naidoo.
On Wednesday, Minister of Public Enterprises Pravin Gordhan appointed Michelle Phillips as Transnet’s Group CEO and Nosipho Maphumulo as the Group chief financial officer, following the resignation of Portia Derby and Nonkululeko Dlamini, respectively, in October.
While Dan Marokane assumes his position as Eskom Group CEO on Friday after he was appointed by Gordhan in December following the resignation of Andre de Ruyter a year before.
Business has been working closely with the government on the transport logistics work stream within the National Logistics Crisis Committee to find solutions to the challenges, including allowing private sector participation in the rail sector.
Business Unity SA president Mxolisi Mgojo on Thursday said Phillips’ appointment would enhance stability in the relationships between Transnet and the business sector.
“We have, over the past months, seen a much-needed improvement in the relationship between the country’s transport and logistics authorities and those businesses whose existence is dependent on efficient and effective logistics,” Mgojo said.
“But this progress, while valuable and necessary, is only the first step in addressing the crisis. Stability is essential to sustain the good work being done.”
The poor state of the country’s rail networks and ports is costing the economy an estimated R1 billion per day.
Mining accounts for about 80% of Transnet Freight Rail’s annual revenue, and approximately R50bn was lost in the minerals sector alone in 2023.
The mining industry’s exports have been crippled by Transnet rail inefficiencies as volumes transported by rail have declined by a third in the past six years.
Minerals Council spokesperson Allan Seccombe said they worked well with Phillips in her acting CEO role, and were expecting to build on the good relationships they had established.
“The Minerals Council notes Ms Phillips’s commitment to implementing the Transnet Recovery Plan, which includes sustainable cooperation with the private sector to improve operational efficiencies,” Seccombe said.
“Mining companies have increasingly resorted to road transport to export their products, which is far more expensive and inefficient than using trains. Trucking is deleterious for the environment, communities, roads and safety. Returning bulk commodities to rail is a priority for the mining industry.”
Marokane assumes leadership of Eskom at a time when the power utility is still struggling with heightened levels of load shedding and an unstable financial position as it expected to report another R20bn loss for the 2023/24 financial year.
However, Old Mutual Wealth investment strategist Izak Odendaal said the appointment of permanent leadership at Eskom and Transnet was the first step in ensuring that they regained their good operational performance.
Meanwhile Transnet says it has reached stability at the Durban Container Terminal Pier 2 following a major container and vessel congestion crisis experienced late last year.
Managing executive at the Durban Terminals Earle Peters said: “The terminal’s challenges have encouraged collaboration with employees, customers, academia and original equipment manufacturers as the company worked towards sustainable solutions.”
Peters added that contracted equipment manufacturers are on site assisting with equipment reliability and availability over the next seven years.
“Plans for the next 12 months include capital investment that will see the acquisition of 45 haulers, four reach stackers and five empty container handlers which will be commissioned for use in May this year. The approval and governance processes are also in progress for the acquisition of 20 straddle carriers for delivery by November 2024.”
Peters said the terminal has started an outcomes-based programme in partnership with the University of Pretoria to upskill employees in order to improve the company’s operational performance in the next 100 days.
Economist Dawie Roodt said any progress is good progress.
“It definitely should be applauded. Obviously my question is why do you have to wait for everything to collapse before really starting to put an effort into fixing it? It’s clear there is no proper planning.”
Johann Els, Old Mutual Group chief economist, said it seemed pressure from the private sector and government had led to some of the most pressing issues around capacity constraints being resolved for now at the ports.
“A lot more needs to be done by the new Transnet board. The immediate crisis seems to have been resolved and will thus bring some better news for the economy.”
Professor Irrshad Kaseeram, of the University of Zululand’s Economics Department, said President Cyril Ramaphosa’s intervention has led to a welcomed transparency about the operations at the Port of Durban.
The Mercury