South Africa

Gordhan to make ‘most critical decision’ of his career

Minister of Public Enterprises Pravin Gordhan is set to make the most critical decision of his career in appointing a full-time managing director and chief executive of rail at Transnet. 

This is feedback from transport economist at Stellenbosch University Professor Jan Havenga, who told the SABC that Transnet’s turnaround could be derailed if Gordhan does not appoint two good people. 

South Africa’s freight-rail system and all main shipping ports are operated by Transnet, which has been dogged by management upheaval, derailments and equipment shortages.

However, there are positive signs that its turnaround plan is bearing fruit under new management, Havenga said. 

While 2023 was the worst year in South African history for logistics, it was simultaneously the best year for the industry as Transnet’s poor performance kickstarted reform processes. 

This includes the gradual implementation of a logistics roadmap that will allow for private-sector involvement in running the country’s railways. 

One of the major changes has been the change of leadership at Transnet, with CEO Portia Derby and CFO Nonkululeko Dlamini resigning in September 2023, followed shortly by Transnet Rail CEO Siza Mzimela. 

The board appointed Michelle Phillips, chief executive of Transnet Pipelines, as acting group CEO, effective 1 November 2023.

Havenga said this new leadership has proven effective in turning the utility’s fortunes around by being more actively involved in the business and more visible. 

He said rail volumes are improving, and container volumes, particularly at Durban, are picking up. 

However, Gordhan’s decision to appoint a permanent Transnet CEO and other executives threatens this progress. If the minister appoints the wrong individuals, Havenga warned of dire consequences. 

“I will shock you with my statement. If we make a mistake now, we can prepare for civil war. That is where we are,” Havenga said. 

“I promise you, there are so many problems. We cannot afford to lose another few hundred billion rand like we lost in 2023. We cannot afford 500,000 job losses. We cannot afford any of these things.”

He explained that the effect of the logistics crisis is just as bad as Eskom, but people just do not see it every day and do not feel it in the same way. 

“This is one of the most critical decisions ever that Mr Gordhan needs to make. He needs to appoint two good people.”

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