END OF THE TRACK
Transnet left rudderless as both CEO Portia Derby and CFO Nonkululeko Dlamini resign
The resignation of Transnet group CEO Portia Derby now leaves vacancies at SA’s two critical state-owned entities, Transnet and Eskom, that Public Enterprises Minister Pravin Gordhan is tasked with filling.
Transnet CEO Portia Derby has resigned after three years at the helm of the state-owned transport company.
Daily Maverick understands that Derby handed her resignation letter to the Transnet board on Friday, 29 September, and has committed to staying at the company until the end of October.
In a statement issued on Friday evening, Transnet confirmed Derby’s resignation. Transnet said CFO Nonkululeko Dlamini has also submitted her resignation, leaving the SOE on Friday, 29 September, “after serving a month’s notice”.
This leaves Transnet’s two most senior positions in the C-suite vacant.
Transnet said Michelle Phillips, CEO of Transnet Pipelines, will replace Derby on an acting basis until a permanent replacement is found. Hlengiwe Makhathini will act as CFO in Dlamini’s place.
Derby and Transnet Freight Rail CEO Sizakele Mzimela have faced mounting pressure to resign from various industry bodies and, more recently, organised labour as the company’s financial and operational crisis has worsened under the pair’s watch.
Mzimela, who is in charge of Transnet’s rail network, which is unreliable and causing losses worth billions of rands to the economy, remains in her post.
Derby was appointed by Public Enterprises Minister Pravin Gordhan in 2020 to turn Transnet around, after years of underperformance at the SOE and high-level corruption.
Derby’s resignation now leaves two vacancies at critical SOEs, Transnet and Eskom, that Gorhan is tasked with filling, and has yet to do so.
Speaking about Derby’s resignation, Krutham (formerly Intellidex) MD Peter Attard Montalto told Daily Maverick:
“There will be much relief in many quarters at Portia’s exit from Transnet. However, we must not forget that the problems are very very deep in the organisation, and the board will struggle to find a credible person quickly, who must be exceptionally strong so as not to be captured by the blob layer in the company where the problems really lie.”
In recent months, Derby has come under intense criticism from the mining industry for failing to fix Transnet’s rail network and ports. The Minerals Council South Africa, which represents 80% of the mining industry, has been vocal in calling for Derby and Mzimela to be replaced.
The Transnet board was due to issue a report on the performance of the two executives on Friday after Gordhan directed them to assess their suitability for the posts. The market saw this as Gordhan losing confidence in the leadership of the two.
Transnet’s rail operations are a crucial cog in South Africa’s economy. They are responsible for moving most of the iron ore and coal that is produced in the country and then taken around the world.
But exporters are facing major problems in railing their goods to market, and this can be seen at Transnet Freight Rail (TFR), Transnet’s largest division, which generates most (45%) of the SOE’s revenue of R68.9-billion. Rail volumes at Transnet declined by 13.6% as TFR moved 149.5 million tons (mt) down from 173.1 mt. Volumes have been languishing below 200 mt since 2020. Transnet ports are also ranked among the worst in the world.
Transnet also faces a financial crisis. Transnet swung from a profit of R5-billion to a loss of R5.7-billion for the year ended March 2023. And while the attention has been on Eskom’s debt problems, Transnet has its own. Its debt has reached R130.1-billion, with the SOE now paying R1-billion in interest every month. DM
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Nothing will change, they are incompetent so there were no real rudder effect anyway
Exactly. More useless and incompetent people the world has yet to see. Where on earth are they found?
It’s a good start. Two down, hundreds of thousands of incompetents still to go. They have collectively destroyed a once-thriving entity, and in the process the rippling effects have led to the destruction of roads and other infrastructure.
I love that expression ‘blob layer’. And I see that one of the blobbiest of all, Siza Mzimela, is still there. Watch out for even more destruction if Pravin promotes her.
Exactly! Still waiting for the meeting to be rescheduled which she didn’t attend last year in February (but of course failed to let us know she couldn’t make it any more). Michelle Phillips not much better either quite frankly. Jabu Mdaku at TPT also a complete waste of time. The only decent executive we dealt with was Velile Tube, while he was CEO of TPT, but he took a package after less than 18 months – probably to frustrated to continue trying to effect change with no support from above and loads of resistance from below.
Rudderless! Better to have no rudder than one taking the ship in circles and smashing into others
No competent CEO will touch any of the SOE’s unless they have full government backing and complete freedom to execute their mandate. This will require:
Effective law enforcement to get rid syndicates and corrupt officials
Scrapping of prescriptive employment and procurement policies
Crushing unions to be able to get salaries within bounds and fire the deadwood
I don’t think the ANC are able to give the necessary backing.
You are 100% correct – these are al deployed cadres put there by the ANC/EFF by the communist Gordan at the behest of the ANC/EFF deployment committee. Who will be the next deployed cadres with insufficient competencies? Denise Smit
Transnet left rudderless? The whole of SA was left rudderless on the day when Thabo Mbeki became president, and we have already hit the rocks. All we do now is pick up pieces of wreckage. Imbeciles.
It was like witnessing a demolition Derby. Molefes unite. How dumb to appoint her and expect anything different
Gordon appointed Derby over other candidates because he ‘knew’ her. This is political interference yet again. It makes me think Gordon has lost the plot and must go. I used to think he was one of the good cadres, but like all the others he is now useless. He can’t fix Eskom or Transnet. What is he useful for??
He’s never had the plot.
To be fair, Transnet has been rudderless for 3 decades
Left rudderless? Therein lies the specific problem in SOEs and indeed in our countries leadership. To steer the country and SOEs one needs strong leadership and strategic insight. What we have are warm bodies that are earning a fortune and shopping, shopping, shopping in Sandton City. There is no strategy, plan or direction – well, there is definitely a plan to get more bucks to spend at Sandton City.
This has to be the most embarrassing bunch of rulers in the world (excluding the possibility of Trump ruling the US from prison).
Will the ANC ever discover that competent people, not loyal cadres are required to run massive SOEs? In filling these posts, Pravin Gordhan please note:
1. Transnet is not a political party. It is a transport and logistics company, requiring high levels of management and technical skill.
2. Transnet is not a get-rich-quick opportunity for some well-connected ANC member. It is critical support to the South African economy.
3. Transnet is not an endless pile of money that can be drawn on at will by corrupt individuals. It is a business that requires integrity and strong leadership to thrive
4. Transnet is not an island that can excel irrespective of its context. No new CEO will do well as long as he/she:
* lacks the freedom to do the job as necessary
* lacks government and union support
* operates in an environment of corruption
* suffers constant criminal onslaught on infrastructure and projects
* is constrained by BEE policies to employ politically correct people rather than competent people
Spot on summary
They’ve had their fill. Making space for someone else from cANCer to feed at the trough…
R1-billion in interest every month!
That is R12 billion a year.
Swung from a profit of R5,7 billion to a loss of R5 billion.
It is incredible… can such a situation ever be fixed?
The 5.7bn profit came from selling assets and was a one off. Reminiscent of SAA selling its planes and leasing replacements, which got Coleman Andrews and senior management some nice bonuses, based on the illusion of profit.
What is scary is that Portia Derby did much the same and at the time was lauded for it
Game of deck chairs, anyone? What the hell has happened to Pravin Gordhan? He used to be one of the few “good” guys (theory of relativity applies here). Perhaps part of the problem is that there seem to be few, if any, competent, appropriately qualified people who would touch this circus with the proverbial barge pole.
Hooray. Great opportunity for more ANC corrupt cadres, family and friends to be deployed, earn fantastic remuneration. Porsche, Mclaren, BMW, Mercedes et al sales will soar
The common denominator in all the SOE’S is Pravin Gordhan . He has personally ensured that the major SOE’s have remained in incompetent and generally corrupt cadres. He has to go before anything positivr will happen!
100% correct .Pravin Gordon is a idealistic Communist wanting a development state in a country where stealing is not frowned upon but encouraged
I really appreciated Pravin Gordhan as being one of the very few good guys who stood up to the evil of zuma and I struggle to comprehend how he has apparently lost his way. What’s on earth has happened?! Is he dishonest? Is he useless? Both? Or are commentators here missing a trick?
Too little too late. The real problem is government. Transnet is probably beyond saving. The best to hope for is that it dies quickly and that it is taken over by something new that replaces everything and everyone from scratch. That won’t be allowed by the cANCer of course, but they will be out of money by then and unable to influence matters. We will learn that the IMF are not pleasant the hard way.
When ideology drives strategy and vision you will make all the wrong decisions for all the wrong reasons. And so after all these years of doing the wrong things the chickens have come home to roost. One always thought that Pravin had some intellectual capacity to not only know this but would actually do something about it. They say you become like the 5/6 people you spend most of your time with, this clearly applies to Pravin, you have also failed your nation and just become one of them. So sad.
How much were they paid out in bonuses during their destructive period at the helm. Whatever this amount is it should be paid back. It’s tax payers money and we don’t reward incompetent losers.
Rudderless????? – I thought that that was a permanent state of affairs in all SOE’s. As for Pravin looking for competent people – sorry Pravin – you are a disappointment. Just making sure that the comRAIDS can carry on feeding at the trough.
I sincerely hope that the people who swooned when Gordhan advised dot joining and Ramaphosa lullabied about the new dawn feel a bit silly now. Nothing whatever that comes out of the ANC can be trusted. The least trustworthy of their excretions being their deployees.
Total collapse of governance the past 20+ years. What works? No law and order. Not a single govt department or SOE works, all been transforned and yet they wish to transform even more. Will this improve? Methinks not under current government, militant unions, illiterate (30% pass) population with poor work ethic. Look North and consider the rapid declune the past 20+ years. Why would this change now?
How about appointing someone based upon competency and a proven track record of positive results. Oh hang on…. that leaves ANC cadres completely off the list of possible.