Siza Mzimela has stepped down as CEO of Transnet Freight Rail, following the departure of Transnet CEO Portia Derby.
Labour federation Cosatu has welcomed the resignation of Transnet’s senior management this week. However, it warned that thousands of jobs could be at risk if the crisis is not speedily resolved.
This as troubles at the state logistics company, Transnet, continue to pile up after Transnet Freight Rail CEO Sizakele Mzimela resigned midweek, just days after the head of the SOE, Portia Derby, also fell on her sword, leaving the organisation rudderless. Derby leaves at the end of October, while CFO Nonkululeko Dlamini also left and has now joined Telkom.
The DA called on Minister of Communications and Digital Technologies Mondli Gungubele to rescind Dlamini’s appointment, calling it – just a few hours after she resigned from Transnet – a disgrace.
MP Natasha Mazzone said:
Dlamini’s appointment to Telkom is simply astounding considering the train wreck that she and Portia Derby left behind at Transnet. The DA completely rejects this clear case of cadre recycling, which has been responsible for the collapse of the SOE sector in South Africa.
She said with her at the helm, compliance with auditing and financial reporting standards by Transnet remained weak.
These weak controls had direct implications on Transnet’s reported irregular, fruitless and wasteful expenditure, which increased from R1.1 billion in 2022 to R2.3 billion in 2023.
READ: SIU says officials resigning from public service before facing the music hampers investigations
Cosatu spokesperson Matthew Parks said that Public Enterprises Minister Pravin Gordhan must move with speed to appoint not just acting but permanent replacements.
“It’s critical that the people appointed to Transnet and TRF can hit the ground running and really turn things around,” he said.
“The fact that today, Transnet transports fewer goods than it did 30 years ago, yet the economy has doubled in size, points to the crisis. And right now, the fiscal crisis facing the state is directly because of the chaos at the company.”
He added:
Mining is going to go through a job bloodbath soon if you don’t see things moving quickly in the next few weeks of Transnet. So, we hope government will put in place a package of support that it gave to Eskom to rebuild the once-powerful SOE that is supportive of economic growth.
Both Derby and Mzimela have largely been blamed for the dismal performance of Transnet. Under their tenure, Transnet has been on a downward trajectory being burdened with mounting debt levels, increased cable theft, vandalism of infrastructure and delays at the ports.
Failure to deliver on its commitments has cost the mining industry billions in lost income, as well as tax revenue losses for the fiscus.
READ: Transnet CEO Derby and CFO Dlamini quit
Parks said for the next management of the ailing SOE to succeed, it must receive support from government.
“Otherwise, they can appoint the best management in the world, they will not succeed. There has to be support from government to Transnet around this crisis, from wasteful expenditure to corruption, from cable theft and vandalism to criminality and arson; and investment in infrastructure machinery in the skills of staff to bring it back and skilled staff who were unnecessarily allowed to leave earlier.
We don’t have the luxury of time. Transnet is critical to the mining, manufacturing and agricultural sectors. Government needs to move more with speed and get it moving.
Mining companies have been complaining about the duo’s performance and called for their sacking earlier this year in a scathing letter addressed to then board chairperson Popo Molefe.
The Minerals Council SA, which represents big mining companies in South Africa, said the crisis at Transnet was having a catastrophic impact on the industry. This as mining houses were not able to fully take advantage of the recent commodity boom because of logistical challenges at Transnet.
READ: Minerals Council SA calls for Transnet CEO, rail chief to be axed
Under their tenure, declines in tonnages on major bulk commodities were recorded and a two-week strike a year ago that cost miners nearly a billion a day didn’t help the situation.
Last month, Transnet reported losses of R5.7 billion after a 13.6% decline in freight volumes and rising debt levels, which cost the company about R130 billion. This is the exact opposite of a R5 billion profit reported in the last financial year.
Recent Comments