Transnet skills crisis

Current and former Transnet employees say South Africa’s rail and ports utility faces an acute skills shortage, with hundreds of experienced employees taking voluntary severance packages.

This was revealed in a report from Business Times, where Transnet employees said the utility is suffering from a shortage of skilled personnel, inexperienced executives, and extremely low staff morale. 

Transnet’s shortage of locomotives and rampant cable theft and vandalism have been well-documented. However, its severe lack of skills and executive experience have contributed to the utility’s collapse. 

An example of Transnet’s executive team lacking skills and experience is Sizakele Mzimela, CEO of Transnet Freight Rail, the utility’s largest and most important division. 

Mzimela was previously CEO of South African Airways and has no leadership experience at a logistics or freight company, only airlines. 

The entire current executive committee at Transnet was appointed after Portia Derby was named CEO in 2020, which one former executive described as “far from ideal”. 

Of greater concern is the lack of skills at lower levels of the organisation, with hundreds of engineers, financial managers, project managers, and train drivers taking early exit packages. 

In response to questions from Business Times, Transnet said 5% of its total workforce took voluntary severance packages. 

Many of these employees were replaced by inexperienced people or not at all. 

Derby herself has been accused of scaring off four highly experienced financial directors and the group treasurer. 

“She pushed out the deep-skilled old guard who was there for 20 to 30 years who were never part of the corruption and just wanted to get on with their jobs. She cleaned house in a very poor way, and they lost a huge amount of technical skills,” said a former executive. 

“She blames cable theft and a shortage of locomotives, but what is hiding behind that is the inefficiency of the system. You need seamless handovers, maintenance, operations, and drivers. This has to happen for the rail system to work and make money. She cleaned out all this experience.” 

Transnet recently reported a R5.7 billion loss for the year ended 31 March 2023, compared with a R5 billion profit in 2022. 

The volumes delivered by its freight rail business dropped 13.6% during the period.

The collapse of Transnet is set to cost the country R1 billion a day in economic output, equivalent to 4.9% of annual GDP or R353 billion. 

The Minerals Council of South Africa estimated that poorly run ports and freight-rail lines may have cost the country R150 billion rand in exports last year.

Employ the best person for the job

Billionaire Patrice Motsepe said the country cannot be experimenting with the leadership of critical institutions and that employing the best person for the job is non-negotiable. 

Motsepe did not hold back in his criticism of South Africa’s failing state-owned enterprises and the lack of skilled leadership at state institutions. 

“The same principle applies to Eskom and any other parastatal – the principle of employing the best skills and expertise, the best person for the job, is non-negotiable. Absolutely non-negotiable,” Motsepe said. 

“We can’t be experimenting. There is no time for playing around and fidgeting by saying you are such a smart, bright young person, but your experience is in question. And you put that person in a position of leadership that requires 5, 10, 15 years of experience – of practical experience.”

He said the best people to employ in any industry are those who have grown up in and understand the business. Motsepe has used this practice successfully within his business empire. 

Motsepe’s critique of preferential employment practices echoes that of Finance Minister Enoch Godongwana.

Godongwana told News24’s On The Record Summit that the lack of skills in the government has been created, in part, by the government itself through its cadre deployment policy.

“You can’t put a weapon in the hands of somebody who is not well-trained. What has happened with cadre deployment has been to place a weapon in the hands of somebody who is not well-trained,” Godongwana said.

This is self-defeating in some cases. “When this untrained person has the weapon, he can even shoot you – the person who gave him the weapon. That has been the fundamental weakness of cadre deployment.”