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'Transnet execs must go now.' Cosatu adds pressure as deadline looms

Transnet group CEO Portia Derby

Transnet group CEO Portia Derby

Photo by Bloomberg

29th September 2023

By: News24Wire

  

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As a sword hangs over the heads of top Transnet executives, group CEO Portia Derby and head of Transnet Freight Rail (TFR) Sizakele Mzimela, the Congress of South African Trade Unions (Cosatu) has turned up the heat and called publicly for the company's top management to go.

At the beginning of September, Public Enterprises Minister Pravin Gordhan directed the board to undertake a wide-ranging review of the company's performance. Among the issues he asked the board to address was to assess the executive management to "establish whether persons with the right skills are optimally utilised to deliver on the mandate".

His directive was widely seen as a veiled call on the board to fire Derby and Mzimela, whom the business sector believes are largely responsible for Transnet’s precipitous decline. The poor performance of TFR has caused a bottleneck for commodity exports, resulting in announcements by mining companies to retrench workers. 

The board's report was due to be delivered to Gordhan on Friday after it was granted a short extension.

In a statement issued on Friday, organised labour added its voice to earlier calls by the Minerals Council and the Durban Chamber of Commerce to remove Derby and Mzimela. The statement reads: 

"We are witnessing the collapse of Transnet because of endemic levels of corruption within it, the explosion of cable theft, years of neglect of infrastructure investments and skills development, and a management team that is woefully out of its depth that must now go."

In the past month, two mining companies have announced their intentions to retrench, saying that it is no longer viable to truck coal and ore to the ports at current commodity prices. 

"If the crises at Transnet are not dealt with decisively and quickly, we may lose 35 000 mining jobs and even more indirect jobs in the value chains and host communities. This will plunge these workers into absolute poverty. The Highveld Region in Mpumalanga will bear the brunt of this catastrophe," it said. 

Derby and Mzimela were appointed in early 2020 as part of an initiative to clean up corruption at Transnet in the aftermath of state capture. Derby and Gordhan have been close associates for many years, and Gordhan used his ministerial authority to ensure she was appointed over the heads of the then-board.

Since their appointment, Transnet has experienced several shocks outside its control, including the pandemic, rising crime, flood damage, and a cyber attack. But there has also been evidence of shocking management failure and basic errors due to inexperience and insufficient management controls. The company achieved only 25% of its targets in the past financial year. 

Rail export volumes have fallen from 213-million tons in 2018/2019 to 149-million tons in the last financial year. 

A decision on the future of the executives is believed to be imminent. 

 

Edited by News24Wire

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