The crisis at Transnet, like the chaotic state of other state-owned entities in our country, can be attributed to the continuous meddling of corrupt and dangerously ambitious political forces in its daily operations. What is happening at Transnet is a prime example of how not to be a toxic shareholder-representative. It is a masterclass in failure and everything else that can go wrong.

By Themba Khumalo

After a night filled with bone-chilling thrills and a whirlwind of unpleasant events, where blades gleamed in a hypnotic shade of crimson at Transnet, it is now the perfect moment to embark on an extraordinary voyage.

To set Transnet on the right course, it is time to give the dumb cadres the boot, toss them to the curb – say goodbye to the clueless bunch who couldn’t find the sunrise if it smacked them in the face and instead reintroduce battle-hardened executives who were unceremoniously squeezed out of the organisation. Let these battle-scarred men and women be granted a just opportunity to unleash their boundless skills and witness the breathtaking transformation that shall sweep through Transnet.

In addition to the executive changes, it is crucial to recognise the significant role that Transnet plays in driving the country’s economic growth. While it may be tempting to focus on reshuffling the executive team, the key solution lies in holding the shareholder accountable and urging them to cease any political interference that may be affecting Transnet’s operations.

The primary and crucial concern for me and many other patriots is to ensure that the incoming batch of executives at Transnet are provided with the necessary freedom unfettered by the shackles of political meddling, they must diligently execute their duties, unyielding to external pressures.

It is crucial to steer clear of those sticky situations where the shareholder tries to meddle with the turnaround plan or call the shots, because trust me, that can stir up a whole lot of complications and challenges.

It should be noted that the potential failure of the new executives and the current board of directors at Transnet is more likely to be a result of political interference rather than their lack of capability.

The current shareholder structure is a tangled web of confusion, with political meddling running rampant and lines of control resembling a wild rollercoaster ride. It is like trying to navigate a maze with no map and a mischievous scallywag leading the way.

Transnet, an organisation entrusted with the crucial task of managing ports, rail, and pipelines, was established with the important objective of developing a globally competitive freight system. However, it has been hindered by excessive and unnecessary political interference, as well as a lack of strong government commitment. The original aim was to create a system that would effectively support the long-term growth and expansion of the country’s economy.

TFR Derailed

TFR, previously known as Spoornet, has been a vital player in South Africa’s mining sector. The growth of the country’s railway infrastructure has been closely linked to the rise in the exploration and export of mining resources over the past century and a half.

In the past, Transnet Freight Rail (TFR) held a dominant position as the leading force within Transnet SOC Ltd. It was widely recognised and admired for its remarkable expertise in heavy-haul freight rail. Its name resonated throughout the industry, symbolising its impressive capabilities in efficiently transporting goods across long distances.

TFR prided itself on its extensive railway network that covered South Africa and seamlessly integrated with other rail systems in the sub-Saharan region. Its rail infrastructure constituted around 80% of Africa’s total rail system. The company placed great emphasis on its reputation for technological advancement, both within Africa and globally, and maintained a strong presence in 17 countries throughout the continent.

Initially, the parastatal played a crucial role in the logistics of mining and exporting precious metals, particularly gold. However, the discovery of additional minerals prompted the need for diversification of transportation routes, infrastructure modernisation, and the introduction of specialised wagons to facilitate the extraction and transportation of other minerals like coal and iron ore.

In 2015, the parastatal reached its highest freight volume, transporting nearly 230Mt. However, in 2022, this figure dropped significantly to a mere 149Mt.

Due to the perplexed yet insatiable leadership within the corridors of power, Transnet’s fate took a treacherous turn. Ineptitude, graft, and a bewildered Department of Public Enterprises pushed Transnet towards a perilous precipice, ultimately landing it in the intensive care unit of the corporate world.

There is hope

Andile Sangqu, the chairman of Transnet’s board, has unveiled an ambitious turnaround strategy that, if effectively and comprehensively implemented, has the potential to convert the company’s R5.7bn loss into a R5.1bn profit within a two-year timeframe. The strategy aims to significantly increase rail volumes to 170Mt by the conclusion of the 2023/2024 financial year and further to 191Mt by 2024/2025, in contrast to the previous low of 149Mt recorded in 2022.

To fully execute the strategy, the board has formally requested a R100bn financial assistance package from the government. This includes a direct equity injection of R47bn and the absorption of R61bn of Transnet’s R130bn debt, mirroring the debt relief measures extended to Eskom.

Sangqu has underscored the critical importance of the government’s approval of the proposed financial rescue package for the successful implementation of the turnaround plan. He has expressed apprehension that without the requisite funding from the government, Transnet would be unable to fulfil its commitments outlined in the turnaround strategy.

There is a glimmer of hope on the distant horizon as some highly qualified individuals have been put forward as potential candidates to assume leadership roles at Transnet. These individuals bring with them extensive expertise and a profound understanding of the organisation.

There are two individuals, Mlamuli Buthelezi and Ravi Nair, whose expertise and qualifications align with the needs of Transnet. Their whereabouts were the subject of my curiosity a few weeks ago, and it appears that they have since emerged as frontrunners in the selection process.

Mlamuli Buthelezi previously served as the Chief Operating Officer (COO) at TFR, responsible for managing all freight railway operations in South Africa. His tasks included order management, train planning, central command centre operations, resource allocation, and ensuring the successful implementation of the train plan. He later got promoted to Transnet Group COO.

As Group COO, Buthelezi was in charge of four operational divisions within Transnet, namely Transnet Freight Rail, Transnet National Ports Authority, Transnet Port Terminals, Transnet Pipelines, and Transnet Properties. It meant managing a substantial workforce consisting of over 40,000 employees, as well as the oversight of a business turnover amounting to approximately R70 billion.

After he departed from Transnet, Buthelezi extensively engaged in consulting activities related to engineering projects, the energy sector, transportation, and logistics.

Ravi Nair is a highly experienced and accomplished mobility specialist with extensive experience in executive leadership roles within the freight and passenger railway industry. With a successful track record in positions such as Chief Strategy Officer, Chief Commercial Officer, Chief Operations Officer, and Chief Executive Officer, Ravi is regarded as a versatile and knowledgeable expert in rail strategy, national transportation policy and planning, growth and diversification, complex networked rail operations, rail/port integration, logistics, inter-regional operations, organisational design, large-scale transformation and turnarounds, change management, digitalisation and technology, talent leveraging, and large-scale employee mobilisation.

Ravi had a long and successful career at Transnet Freight Rail, spanning just over 24 years until his departure in 2019. During his tenure, he held various leadership positions, including Chief Executive Officer, Acting Chief Executive Officer, General Manager of Strategic Projects (Growth & Diversification), General Manager of Steel & Cement Business Unit, and General Manager (CFO, CRO, Chief Planning Officer, COO).

We all have our opinions on what we consider to be great or not, so feel free to express your thoughts. However, there are no better candidates than the two mentioned above.