Cape Town — Transnet, the state-owned South African rail, port and pipeline company, says it has completed a turnaround plan. eNCA reports that the plan outlines operational and financial initiatives to be implemented over the next 18 months. It's hoped the focus on freight rail will help reverse a U.S.$398 million (R7,5 billion) loss reported in September 2023. The strategy will be submitted to shareholders this week.
The state-owned enterprise has been ailing for a number of years, and South Africa saw the downward spiral of transport services, particularly passenger rail transport, since Transnet offloaded this sector to the Passenger Rail Service of South Africa (PRASA).
Transnet was also rocked by several resignations in recent weeks - notably that of CEO Portia Derby who resigned on September 27, 2023, and the company's Chief Financial Officer Nonkululeko Dlamini who left on September 27, 2023, after serving a month's notice, Daily Maverick reports.
Derby was given a deadline by the Minister of Public Enterprises Pravin Gordhan to turn around the parastatal's fortunes, following calls from various quarters for Gordhan to act on the crisis at Transnet.
Transnet board member Popo Molefe also resigned on October 13, 2023 after five years. Molefe previously serving as Transnet's chairperson.
Siza Mzimela, the CEO of Transnet's freight rail division, was facing enormous pressure to resign because under her watch, Transnet's rail network became inefficient and unreliable for big industry, writes Ray Mahlaka for Daily Maverick.
Meanwhile, African National Congress (ANC) Secretary-General Fikile Mbalula defended Gordhan in response to criticism that he led the country's state-owned enterprises (SOEs) into a crisis.
The country's ailing rail and freight infrastructure is, according to a study by South African research consultancy GAIN Group, costing the economy R1 billion a day. On September 1, 2023 Gordhan gave Derby three weeks in which to come up with a turnaround plan after the company announced its 2022/23 financial results that showed a loss of U.S.$300 million (R5.7 billion).
There has been several attempts to turn around the fortunes of the ailing parastatal but only time will tell if what the country so desperately needs to boost port and harbour operations, and the transportation of goods, will come to fruition.