Engineering News and Mining Weekly
Matter of Urgency
Transnet needs ‘the right, permanent management, quickly’ – Stellenbosch University academic
State-owned rail and port operator Transnet could, potentially, show significant improvement this year, compared with last year’s dismal performance, says transport economist and macrologistics researcher at Stellenbosch University Dr Jan Havenga.
However, it is imperative that Public Enterprises Minister Pravin Gordhan appoints new leadership at Transnet as soon as possible, he adds.
Havenga has been part of the team of four in Operation Vulindlela that led the development of the Freight Logistics Roadmap approved by Cabinet in December. He has also been providing technical input for the National Logistics Crisis Committee (NLCC) since its inception last year. He also spent some 20 years at Transnet.
“We cannot afford a protracted process such as the one we saw at Eskom,” he notes.
That said, Havenga is highly positive about the efforts by interim Transnet Group CEO Michelle Phillips and Transnet Freight Rail acting CEO Russell Baatjies to stem some of the bleeding since their appointment at the start of November.
“Given the depth of the problems at Transnet, they have performed miracles, and I would suggest that we afford them the time and space to address the challenges at the parastatal. They have, for example, managed to halve the delays at the Durban port, in my estimate.”
In December, 52 vessels were anchored outside the port in what was defined as a threemonth backlog. Another positive at Transnet has been the return of some experienced faces, and the appointment of some new faces in the last “two, three weeks”, all working to reverse the fortunes of the group, which has seen a dramatic decline in rail and port volumes and efficiencies over the last two to three years.
Many of these newcomers have been seconded from the private sector, which is now also footing the bill for their salaries, says Havenga.
“Some solid skills remained in Transnet, but their contribution dwindled because of a toxic culture created by the previous management. Michelle and her team are turning this around.”
Transnet’s decline has frustrated SA Inc to no end, as it has stymied mine development, mineral exports, fruit exports, as well as the retail and manufacturing sectors, to name but a few segments of the economy heavily dependent on the country’s import and export corridors.
“People are angry, and rightfully so,” says Havenga.
He attributes the decline at Transnet to poor leadership under former Transnet group CEO Portia Derby and her team, who he believes lacked the knowledge and experience to lead the group. The team also seemed unwilling participants in the NLCC.
The decline seen under this management team – which departed last year – was worse than that seen during the State capture years, says Havenga.
“They hid the poor performance behind the notion of the poor availability of locomotives, while issues such as infrastructure, operating systems and skilled staff were all eroding.”
The reversal of Transnet’s decline will require a turnaround on all levels, says Havenga.
“Transnet is broken on all four levels – rolling stock, infrastructure, skilled staff and operating systems.
“Given the scope of damage, it will take time. Last year was the worst year in Transnet’s history, but I believe the foundations are being put in place to fix the problem.
“But, as I noted, we have interim leaders. We need permanent appointments. Interim management does not have the legal scope to do everything that is required in the case of Transnet. If these permanent appointments do not happen soon, it could jeopardise the progress we have seen to date.
“Two mistakes can be made here,” says Havenga. “The wrong people can be appointed, or it takes too long to make the appointments.
“If this happens, we are in serious, serious trouble as a country.
“The scope of job losses would multiply, leaving South Africa vulnerable to increasing internal instability. Transnet’s failures have already cost the country 5% of gross domestic product last year.”
Should a new leadership be put in place soon, Havenga believes it is possible to see a steady increase in rail and port volumes this year. He also believes that a new management team will see to the introduction of true private participation at South Africa’s ports and on its railway lines, as envisaged by national government and clearly articulated in the Freight Logistics Roadmap.