The Minerals Council South Africa called for the replacement of Transnet’s senior management before the employer body and the parastatal agree on a way forward to confront the sector’s concerns about the country’s rail and port performance.
This has emerged in a News 24 report which cited a letter, allegedly signed by Minerals Council chairperson Nolitha Fakude, that blames Transnet CEO Portia Derby, and Transnet Freight Rail CEO Sizakele Mzimela, for the poor performance of the parastatal’s services, warning that the country faces an “existential crisis” if the parastatal is not fixed.
In the letter, Fakude called for the pair to be replaced and warned that Transnet could go bankrupt if action was not taken.
“For more than 24 months, we have given the benefit of the doubt to the Transnet management team, who have aptly demonstrated, through several bizarre decisions and statements - and in particular the ongoing tragic decline in the performance of Transnet - that they cannot resolve the crisis and are not capable of turning around the performance. We are insisting on the critical need for urgent change,” the council’s letter said, as quoted by News24.
“Given that Transnet SOC’s operating performance is deteriorating, we cannot see how the company will avoid breaching its debt covenants early in 2023, at which stage the directors of Transnet SOC will need to place the company into liquidation or risk being sued for trading recklessly,” the letter said.
“The bulk commodity mining companies that are members of the Minerals Council are now demanding urgent action on this crisis, as it is now posing an existential crisis for Transnet and for the mining companies.”
According to the report, the council proposed that Transnet bring in technical experts to stabilise its four bulk commodity lines that currently have a “critical shortage” of suitable technical leaders. It added that war rooms comprising industry experts should be set up to confront poor performance on each rail corridor.
The letter urged Transnet’s board to take a critical leadership role to address the crisis. It warned that the industry and country would be placed in an “existential crisis” if urgent action was not taken to fix the parastatal.