Michelle Phillips is Transnet’s best chance at turnaround – BUSA 

Organised business groups have lauded the appointment of Michelle Phillips as Transnet CEO as the best person to turn the ailing port and rail operator around, given her experience and the progress made since becoming acting CEO. 

Phillips was appointed acting CEO following the resignation of Portia Derby in September last year. Derby left Transnet at the end of October following pressure from organised business, mining companies, and unions. 

Transnet operates South Africa’s freight-rail system and all main shipping ports. The company has struggled because of management upheaval, derailments, and equipment shortages.

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

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

A study by the GAIN Group found that Transnet’s collapse is set to cost the country R1 billion a day in economic output in 2023, equivalent to 4.9% of annual GDP or R353 billion. 

Phillips has been charged with implementing Transnet’s turnaround plan and, so far, seems to be making good progress. 

Transport economist at Stellenbosch University Professor Jan Havenga said Transnet’s new leadership has effectively turned 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. 

Havenga added that Gordhan’s decision to appoint Phillips as CEO, along with Nosipho Maphumulo as the group CFO, was the most critical decision he had to make in his career. 

Maphumulo currently holds the CFO position at Eskom Rotek Industries, a subsidiary of Eskom that provides construction, maintenance and transportation services to the power utility’s operations.

Organised business group Business Unity South Africa (BUSA) also viewed Phillips’ appointment positively. 

“Over the past months, we have 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,” said BUSA president Mxolisi Mgojo. 

Mgojo is the former CEO of coal miner Exxaro and has intimate knowledge of the troubles associated with relying on Transnet to export products. 

“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.”

“Though we are not yet close to the realisation of our ultimate objectives, there have been tangible and encouraging advances,” added Mgojo. 

BUSA CEO Cas Coovadia echoed Mgojo’s confidence in the new management team’s ability. 

“We believe that we have a better chance today than we have had in many years to resolve the challenges facing the transport and logistics sector,” Coovadia said. 

“We expect that with skilled and experienced executives now permanently appointed in key positions within Transnet, there will be a strong foundation on which to implement the company’s Recovery Plan.”  

“The open, honest, and critical dialogue that we have seen recently points to the possibility of real progress, so long as a sense of urgency and active collaboration are maintained.”

“Through the partnership with the government, we have worked well with Michelle Phillips when she played the role of acting CEO at Transnet.” 

“We look forward to ramping up our interaction and making real and sustained progress on the critical issues we are working on now that Ms Phillips has been appointed the CEO.”