Spoornet derailed – look north for reasons…

TERRY HUTSON WHAT WENT wrong at Spoornet? Was chief executive Dolly Mokgatle pushed, or did she resign in frustration over the lack of support from her bosses at Transnet, as has been suggested. “Look north,” suggested a source within Spoornet last week, when asked why he thought Mokgatle had departed so suddenly. Spoornet, a principal shareholder in the concession of Zambia Railways, plans a US$5 billion (R30bn) turnaround, but by the end of ten months has achieved little more than a forensic report and the suspension of several top managers. The problem at Zambia Railways – lack of capacity and poor management skills - is strangely reminiscent of what is happening with the parent body back home, say rail analysts. The same source within Spoornet says all decision-making within Spoornet will now become paralysed by Mokgatle’s departure. “It happens every time there’s a change at the top: the new person wants to do things differently so we have to wait for someone else to be appointed who will want a new study to be commissioned.” But what also worries those who rely on Spoornet for their business is that the company continues to get involved with other African railways. In November Spoornet became the operational partner of a consortium shortlisted to operate a combined Kenya and Uganda Railways, as well another in Tanzania. “How can we go about fixing other people’s railways when we are incapable of getting things right at home,” said the source. Spoornet’s lack of capacity cost the South African coal industry an estimated four million tonnes of exports during 2004. Over three million tonnes was lost on the Richards Bay coal line, where a major derailment early in 2004 prevented deliveries to the port for several weeks, leaving the terminal to play catch-up for the remainder of the year – unsuccessfully as it turned out. RBCT finished the year below 65.9mt, well below its targeted 69mt. In Durban the Bluff coal terminal, which can comfortably handle 2mt annually, continues to lose exports largely because Spoornet is unable to deliver coal to the port. Several major ore exporters met recently with government and Transnet to speed up the refurbishment programme on the Saldanha ore line. Solutions included offers to purchase their own rolling stock and build new lines to the ports. In 2003/04 Spoornet recorded a loss of R668m and posted another loss of R509m for the first six months to September (2004). How long the company will continue to bleed, taking Transnet down with it, depends largely on the successor Transnet chooses to succeed Mokgatle and how quickly he or she can take up the reins. Of equal importance is how soon Siyabonga Gama, seconded by Maria Ramos as Spoornet’s caretaker, can return to the National Ports Authority before that organisation also becomes paralysed in the absence of a decision-maker.