Business Maverick

END OF THE LINE

Transnet leadership exodus continues, with Siza Mzimela the latest to leave 

Transnet leadership exodus continues, with Siza Mzimela the latest to leave 
Siza Mzimela, CEO of Transnet’s freight rail division has resigned from the state-owned company. (Photo: Gallo Images / Sowetan / Veli Nhlapo)

Mzimela has been facing enormous pressure to resign because under her watch, Transnet’s rail network, which she manages, has become inefficient and unreliable for big industry.

The CEO of Transnet’s freight rail division, Siza Mzimela, has resigned, joining a top leadership exodus at the troubled state-owned transport group. 

Mzimela sent a letter to staff on Thursday 5 October, informing them of her resignation and plan to stay on at Transnet until the end of the month. She joins CEO Portia Derby and CFO Nonkululeko Dlamini who have also left the company.

Read more in Daily Maverick: Transnet left rudderless as both CEO Portia Derby and CFO Nonkululeko Dlamini resign

In a statement released on Thursday afternoon, Transnet confirmed Mzimela’s resignation, adding that a recruitment process to find her successor is underway. 

Russell Baatjies has been appointed as the acting CEO of Transnet’s freight rail division. Baatjies was recently the managing executive of Transnet’s Cape Corridor, the main line for manganese exports and agricultural commodities. 

In Mzimela’s letter, seen by Daily Maverick and widely circulated on social media, Mzimela, who led Transnet Freight Rail (TFR) over the past three years, thanked the division’s 26,000 staff and urged them to reform the state-owned entity’s floundering rail network.

Transnet heavy industries failings

Mzimela has been facing enormous pressure to resign because under her watch, Transnet’s rail network, which she manages, has become inefficient and unreliable for big industry. The mining industry, mainly coal exporters who rely on Transnet, has been lobbying for the removal of Mzimela and Derby from the SOE. 

The release of Mzimela’s letter, confirming her departure, came hours before she was scheduled to address the mining sector at the Joburg Indaba about the SOE’s plans to reform its Transnet’s rail network, which has caused the economy and public finances to lose billions of rands. Mzimela’s keynote address, which was scheduled for noon, has been highly anticipated by the mining community following the leadership exodus at Transnet. 

During the address, Mzimela spent most of her time talking about challenges that TFR faces, including underinvestment and lack of maintenance in the rail network due to Transnet’s dire financial situation.

Underscoring the dire financial situation is that on 1 September, Transnet unveiled its disastrous results in which it recorded a financial loss of R5.7-billion. It has a smothering debt problem of R130.1-billion, with the SOE now paying R1-billion in interest every month on this debt. 

The lack of upgrades and maintenance to the rail system, Mzimela said, resulted in increased incidents of damage to Transnet’s rail infrastructure, making it unreliable. 

“Systemic underinvestment has resulted in increased maintenance backlog due to limited funds. Incidents cost Transnet R1-billion in 2022/23. Increasing climate-related incidents [such as severe flooding] diverts funding to emergency unforeseen maintenance,” she said.  

Mzimela urged the mining sector and other big industries to partner with Transnet and pour capital into upgrading its rail infrastructure. However, the private sector is often viewed Derby, along with other Transnet executives, mainly Mzimela, as being militant and often refused help offered by private sector players. 

‘Disaster’ for mining

Mzimela’s reign at TFR, which is the largest division at Transnet, has been described as “disastrous” by the mining sector. Over the past three years, rail volumes have been languishing below 200 million tons, and incidents of cable theft on the rail network have been pervasive. 

The mining industry, which depends on Transnet trains to rail coal to markets, estimated that the SOE’s inability to move trains due to mismanagement, cable theft, and vandalism, cost the industry R50-billion in lost opportunities in 2022 alone. 

Mzimela was not seen as the right fit for running Transnet trains because she was the CEO of state airlines SAA and SA Express, which were both in business rescue, but the latter is now defunct. She also had no rail experience.

Defenders of Derby and Mzimela have argued that expectations for them to turn around Transnet were lofty, considering the SOE was a key site of State Capture for many years. In her letter to staff, Mzimela referenced the challenges that she and the TFR staff faced. She wrote: “Despite the seemingly endless litany of legacy challenges, which include lack of tools for peak performance, lack of locomotives, crippling theft, and vandalism, as well as the ‘potholes’ in the infrastructure system that force slower movement of trains due to our company’s safety-first ethos, you, the people of TFR continued to push forward”.

Among the achievements during the three years that she led TFR, Mzimela highlighted the introduction of borderless trains with Mozambique, the repair of the container corridor after it was damaged by floods, the introduction of additional junior miners into the manganese sector and a new manganese export line to East London. DM

Gallery

Comments - Please in order to comment.

  • Jimbo Smith says:

    This is the stuff of tragic comedy. The collapse of Transnet has cost SA billions in lost exports. This didn’t happen yesterday; the decay has been festering for years. And all the while Pravin Ghordan holds onto his job while EVERY single entity in his realm of responsibility is a catastrophic failure. He has not fixed ONE of these smashed SOE’s. How do hard working, tax paying citizens tolerate this scale of massive failure? How does the Chief Executive of SA Inc, Ramaphosa, not fire this underperformer? In the private sector he would been fired years ago but in the public sector, failure means nothing. There is simply ZERO consequence.

  • Paul Savage says:

    “Mzimela was not seen as the right fit for running Transnet trains because she was the CEO of state airlines SAA and SA Express, which were both in business rescue, but the latter is now defunct. She also had no rail experience.” It beggars belief! No doubt the ANC Cadre Deployment Committee considered all the options, and even though she is quite simply hopeless at running an airline, as a solid ANC citizen she is appointed to run a critically important infrastructure SOE. When she finds she is completely out of her depth, she doesn’t resign, but staggers on for three more years, no doubt earning a fabulous salary, while the organisation basically fails in front of her eyes. Thanks ANC, great job. You muppets.

    • Sydney Kaye says:

      She is ANC, Black and Female. That seems to the combination of qualification required for any top job, government or private sector. Since it disqualifies 75% of the population it’s no wonder they gave to scrape the barrel. If you add “competent” that would knock outa further 15%. Why the private sector has to follow these unwritten rules beats me.

    • William Kelly says:

      Wonder why they are fighting so hard to keep cadre deployment records, as if they are capable of keeping any, out of public sight?

  • Hermann Funk says:

    If an owner of a small business has to go into liquidation, he/she is not allowed to run another business until they are rehabilitated which can take ten years. Here we have a woman who caused billions of damages while heading two airlines being moved to another SOE, again proving her incompetence without any consequences for her action. 95% of the problems SA experiences were avoidable.

  • Fanie Rajesh Ngabiso says:

    “troubled” is definitely not the first adjective that springs to mind.

  • Henry Coppens says:

    Any one who says the rail service must not be fixed because this will put the truck drivers out of a job, clearly cannot run a company let alone run a bath. It’s like saying we need to contrinue to litter to keep the cleaners employed. These now ex CEO’s etc were not put there to do a good job and ‘fix’ things . they were put there to help implement the ANC NDR, . What we would see as the absence of ‘zero conseqence’ is part of this strategy. Things like accountabilty together with merit, hard work and hopnesty (MPH) are odious western practices, necessary to be dispensed with in order to follow the NDR to bring about a connected elite with no accountability. ‘I am not making making is up’ as they say. These people are so incompetent that they see themselves as doing a good job. Well they are are, for what they were put there.. Gordhan, their ultimate boss, even if he wanted to, would not be allowed to fix things as this would interefere with the NDR plan which, as a good communist, he must champion . While it is good to bemoan the consequences of this policy, the solution is the destruction of the NDR, and the only way to stop this runaway train is to destroy the ANC – and I mean destroy, not simply vote them out because they will not go without a hell of a fight with the dirtiest of tricks. They take careful note of their heroes in places like Zimbabwe who are showing them the way.

  • Dennis Bailey says:

    She has resigned, if anyone’s watching, and being paid for it. Viva ANC, Viva!

  • Vincent Britz says:

    Typically of the the ANC government, all senior management of all failed SOE all just resign and then get placed into a new roll in a different SOE for them to run into the ground.

    Let’s be honest here! The ANC government is the biggest Gang/Mafia in SA. Doesn’t matter what the ANC government minsters/politicians/department heads/Department managers ect ect ect, do. They always have some way of getting away with it!

  • Malcolm Mitchell says:

    There is no point in tinkering with the Transnet monolith. It needs structural reform to break down the monolith into separate entities for the different forms of transport. Furthermore the provision of infrastructure must be separated from operations as is common throughout the world. The current structure set up many decades ago might have been appropriate for the stage of development of SA at the time , but is no longer so.

  • Denise Smit says:

    How do these people get the most important jobs in the country? Of course they are the deployed cadres of the ANC/EFF. Any one who still says we must wait for change of government until 2029 when Rize Mansi has risen must be deaf and blind. There will be nothing left of the country. Who will be the next pharmacist Gordan will deploy to Transnet. Denise Smit

  • Stefan Hendriks says:

    We need audit controls over ALL scrap metal dealers (& other potential buyers of stolen state infrastructure). Cable theft only pays off when the items are sold. I don’t understand why in our country a hole cannot be fixed before it turns into an abyss?! Zero accountability and cadre employment.

  • Egmont Rohwer says:

    ComRAIDS in action

  • Craig King says:

    Unfortunately the people who put her in post are still in post themselves and will make the next appointment. One executive expressed concern that improving the rail service would result in job losses in the trucking sector. These are the people we depend on to keep life working in South Africa.

  • Brian Cotter says:

    Among the achievements during the three years that she led TFR, Mzimela highlighted : …and a new manganese export line to East London.
    This project was not mentioned in the list of projects presented to Parliament in June 2022. However the fanfare is for a paltry 0.5 Mtpa export with no automation just skip loading.
    So I suspect a little bit of use some rail capacity here in place of road trucks.

  • George (Mike) Berger says:

    There’s a great deal of fingerprinting at individuals and subtly at ethnic groups, perhaps with some justification. But the problem lies with the party responsible, the ANC and cannot be fixed without removal of or sidelining the party.
    They have created a monstrous bureaucratic organization of political appointees without the expertise, motivation and ability. Even worse is the culture which is focussed on selfpromotion and selfenrichment rather than performance. Legislative restrictions prevents decisive action against incompetents or obstructive elements. Combine this with ethnic and gender preferences, lack of skills and laziness in the workforce, deliberate criminal vandalism and theft plus underfunding and NOBODY can fix the rotten system.
    At the root is the ANC. Until it’s poisonous influence is removed reform is impossible. One can build around it perhaps but ultimately while the same gang is in charge nothing significant is going to happen.

  • Fuad XXX says:

    Mr President, how much more disastrous incompetence will you allow from your cadres without consequences? Surely it is time to put South Africa first PLEASE!!!

Please peer review 3 community comments before your comment can be posted

X

This article is free to read.

Sign up for free or sign in to continue reading.

Unlike our competitors, we don’t force you to pay to read the news but we do need your email address to make your experience better.


Nearly there! Create a password to finish signing up with us:

Please enter your password or get a sign in link if you’ve forgotten

Open Sesame! Thanks for signing up.