Public enterprises minister Pravin Gordhan has thrown his weight behind the newly appointed Transnet board, amid calls for the axing of senior executives from the state logistics company, including CEO Portia Derby.
Business lobby groups the Durban Chamber of Commerce, the Pietermarizburg and Midlands Chamber of Commerce and the Association of SA Chambers (Asac) have called for Gordhan and the Transnet board to consider firing Derby and Transnet Freight Rail CEO Sizakele Mzimela, over the steady deterioration of the company.
“I am confident the board understands the scale of the challenges that are confronting Transnet, and I can assure the SA public the board has my full support in its effort to come up with the requisite remedial actions. We will be engaging the chambers,” Gordhan said in a statement on Tuesday.
“The board is seized with the injunction that I have given it, and I am sure 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.”
The support follows Gordhan’s directive to the board to present a turnaround performance plan to him within three weeks. This is after the entity reported a loss of R5.7bn from a profit of R5bn in the previous year, stemming from the decline in rail volumes, which slumped 13.6% to 149-million tonnes in the year to end-March.
The company also has a debt pile of R130bn and is paying R1bn a month in interest.
The turnaround plan requested by Gordhan includes a review of the management by the board and of Transnet’s “excessive cost structure”.
Earlier in September, Transnet said Derby would meet the chamber’s CEO, Palesa Phili, and Durban mayor Mxolisi Kaunda, to discuss the issues.
The Minerals Council SA in 2022 called for the sacking of Derby after Transnet’s performance kept getting poorer. In a joint statement soon after Transnet’s board and leaders of the council said they agreed to set up collaborative structures to help stabilise and improve the throughput of SA’s rail and ports systems.
Updated: September 20 2023
This article has been updated with additional information
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