Three top execs eyed for Transnet CEO post
Front-runners said to include RBCT chair Nosipho Damasane
● Two former Transnet executives and the board chair of Africa’s biggest coal export facility are believed to be front-runners for the position of group CEO at the stateowned rail and ports company.
Business Times understands that Richards Bay Coal Terminal (RBCT) executive chair Nosipho Damasane, former Transnet Freight Rail (TFR) CEO Ravi Nair, and former Transnet Group COO Mlamuli Buthelezi are in the running for the top job.
Damasane is a former COO of Transnet Port Terminals and has previously acted as an adviser to public enterprises minister Pravin Gordhan. She’s also had a stint as CEO of the Passenger Rail Agency of South Africa. Damasane also chairs Indlela, a company formed late last year to invest in wagons and locomotives to improve rail and port logistics in Southern Africa, alongside a Swedish partner.
Buthelezi and Nair were among four executives suspended by Transnet in 2019 after investigations into maladministration as the company moved to improve corporate gov- ernance and regain market confidence after state capture. They were suspended with then group executive for human resources Nonkululeko Sishi and Shulami Qaling, the then CEO of the Transnet National Ports Authority.
According to the 2020 integrated annual report, Buthelezi and Nair received R17.2m and R13.3m in 2019 which included “settlements in respect of service termination”.
Transnet is on the hunt for a new boss after group CEO Portia Derby resigned alongside CFO Nonkululeko Dlamini in October. A week later, TFR CEO Sizakele Mzimela also stepped down.
Derby and Mzimela came under fire after various stakeholders, including the government, business and labour, had grown impatient over the deteriorating performance of the business, which resulted in a decline in rail and port volumes handled, hurting export miners and other customers.
When the company reported a R5.7bn loss in September, Gordhan ordered the board to review all of its operations, including management, to establish if the right people with the right skills were in charge.
Business Times understands from sources within the board that while the selection process — including the shortlisting of candidates to be interviewed — is yet to be concluded, Damasane, Nair and Buthelezi are emerging as strong contenders due to their extensive experience at Transnet.
“I don’t see anyone stronger than those three when it comes to replacing Portia,” said an insider who asked not to be identified.
Commenting on the recruitment process, Transnet spokesperson Ayanda Shezi said the entity was on course to meet deadlines for replacing the departing executives. She said further updates would be shared once the process had been finalised and all governance processes concluded.
“The filling of the three executive vacancies is receiving priority attention from the board. The chair has indicated that the earliest the process could be concluded would be the end of the calendar year, or the end of February 2024,” Shezi said.
Speaking at a presentation on Transnet’s recovery plan last week, chair Andile Sangqu said the group was committed to stabilising the operations “from a leadership point of view”.
“We have advertised the roles internally and externally, and the closing date was October 19. So the team is busy with that process. We have our board structures that are in earnest looking at the selection process. We have what we call the best case where we are hoping that by the end of this calendar year we will have completed the process, or at the latest at the end of February.” Sangqu unveiled an ambitious recovery plan that, if fully implemented, should turn Transnet’s R5.7bn loss into a R5.1bn profit in the next two years. It is premised on increasing rail volumes to 170Mt by the end of the 2023/2024 financial year and 191Mt by 2024/ 2025 — from a low of 149Mt reported in 2022.
For the plan to be fully implemented, the board has asked the government for a R100bn bailout. Of this, R47bn would be a direct equity injection, as well as the absorption of R61bn of its R130bn debt, similar to the debt relief offered to Eskom.
Sangqu said the successful implementation of the plan relied on the government agreeing to a financial rescue package. “If the government does not agree to the funding, we will not be able to deliver on the turnaround plan.”
On Wednesday finance minister Enoch Godongwana poured cold water on the request, insisting the government would bail out Transnet only if it showed commitment to turning around its poor performance, and successfully facilitated the entry of private players to the rail network and port terminal operations.
“Transnet came to us a few weeks ago with an invoice,” Godongwana said at a media briefing before delivering his mediumterm budget policy statement on Wednesday. “This time around we are not going to give a bailout, whether in the form of a cash injection or state guarantees, until we are satisfied with the implementation of the logistics roadmap,” he said, in reference to a plan drafted by the Presidency that paves the way for breaking up Transnet’s rail and port monopoly.
Meanwhile, business has been asked to fork out R120m to help ease the logistics crisis. Speaking on the sidelines of the KP
MG 2023 CEO Outlook, Business Leadership South Africa (BLSA) CEO Busi Mavuso said they had been asked to contribute the amount to the national logistics crisis committee set up by the Presidency to address the problems at Transnet and other logistics bottlenecks.
She said when the national energy crisis committee was set up to help fix Eskom and end load-shedding, business raised R100m as a resource mobilisation fund that helped capacitate the committee with specialised skills. They have once again been asked to help another crisis committee.
“They need all the help they can get. As we put these plans in place it would be unfair to expect the very same executives who are trying to deal with their day-to-day work to come in and put these plans in place. That is why Operation Vulindlela was [started],” she said.
Jan Havenga, a member of the logistics crisis committee, said the R120m would go towards specialists and organisational costs.
“It will pay the salaries, research fees, consulting fees and other related costs of the whole crisis committee set-up. Business has been asked to fund it,” he confirmed.
Mavuso said it was correct for the business sector to contribute towards the cause as the economy was unable to cope with Transnet’s failures.
“The N3 [highway] is not coping, the rail infrastructure is not working. We have companies that have to pass the Durban port and land at the Mozambique port. They have to get those goods on trucks to come back into South Africa.”
She said BLSA had no doubt that the Transnet board had presented a strong turnaround plan that would work.
“The only issue is that they need to be given the space to do what they need to do — zero political interference — because once you start getting the shareholder to interfere by changing the plan and telling them [what to do], you will see problems.
“The Transnet board will fail because of political interference, not because they are not capable,” Mavuso added.