The country’s economic progress within the ever-changing international trade environment relies on the effective operation of our ports and rail systems. Transnet’s mismanagement and operational issues have caused a significant lack of confidence in South Africa, resulting in a grave fiscal challenge.

By Themba Khumalo

Transnet continues to be burdened with weighty challenges, particularly in its procurement processes, because of the stringent guidelines outlined in the Public Finance Management Act (PFMA). Somebody with a lonely functioning brain cell at the National Treasury must push these regulations to be revised because they have rendered operations arduous and complex.

The PFMA is significantly constraining Transnet’s operational flexibility and impeding its ability to respond promptly to urgent circumstances.

The impact of this challenge is glaringly evident in the struggling ports and railways, which unresolved inefficiencies have long weighed down. The significant issue primarily revolves around the cumbersome and limiting nature of the procurement process.

Although it makes sense that the PFMA was introduced to ensure responsible management of public finances, given the pervasive corruption that has caused the entity to suffer considerable financial losses, it is difficult to overlook its monumental failure.

An employee of Transnet underscored the critical necessity of acquiring rail and port equipment, spare parts, and replacement components promptly to facilitate swift replacement and refurbishment, ensuring the company’s seamless operation and meeting the freight industry’s requirements. However, the bureaucratic procedures outlined in the Public Finance Management Act (PFMA) impede the timely acquisition of these essential resources.

The result has led to an increase of non-compliant trucks on our roads, causing extensive damage to infrastructure, costly transportation of goods, and a massive backlog of containers at ports, particularly in Durban. According to sources within Transnet, the backlog will continue for an extended period, potentially lasting three months or longer.

Efficient ports play a crucial role in a country’s economic development by facilitating the smooth movement of goods within and across borders. The current debilitating challenges relate to operational matters and underscore the Transnet Ports Authority (TNPA) deficiencies.

The TNPA and Minister of Public Enterprises, Pravin Gordhan, exhibit a limited comprehension of the pivotal role played by ports as vital conduits that facilitate the connection of producers to consumers, manufacturers to raw materials, and businesses to global markets.

Efficient ports are essential for the reduction of transportation costs, the minimisation of delays, and the facilitation of smooth goods movement.

Furthermore, ports substantially impact trade, foster economic development and draw foreign investments. It is a no-brainer that well-maintained ports can create employment prospects and support the development of interconnected industries such as logistics, transportation, warehousing, and manufacturing.

The Department of Public Enterprises is taking far too long to fill essential positions at Transnet, notably Group CEO and COO, suggesting a lack of understanding of the significance of our nation’s competitiveness in the international arena, whose efficiency of its ports and rail is directly tied. Ports, as well as rail, serve as the backbone of a robust and interconnected economy.

The importance of efficiently operating ports extends well beyond their immediate geographical confines, significantly influencing a country’s economic well-being at its fundamental level.

Transnet faces numerous challenges and needs immediate and comprehensive solutions to address these difficulties for the country’s economy. It is imperative to address inefficiencies in planning and personnel management, revitalise the railway network, prioritise infrastructure maintenance, and embrace maritime digitalisation to progress. These actions are not merely strategies but rather crucial measures to guarantee the resilience and efficiency of our ports.

Efficient and strategic planning and skilful personnel management are crucial factors that require careful consideration. One of the critical factors that contribute to the challenges faced by Transnet is the need for more planning and personnel management within the port and rail authorities. It is crucial to optimise these processes to overcome the challenges.

It is essential to recognise that employees who are not satisfied can lead to a decline in productivity. Therefore, it is necessary to create a comprehensive strategy to address these underlying issues effectively. From what I have gathered thus far, Transnet has many dissatisfied employees.

Maintenance and Technology

The excessive dependence on trucks for container transportation has led to a significant bottleneck that requires immediate intervention. Enhancing the railway network could substantially improve the capacity for direct container transportation to the harbour, alleviating road congestion. Recent events, such as the disruption of coal truck traffic outside Richards Bay, highlight the pressing need for railway infrastructure improvement.

The port’s equipment has yet to receive adequate maintenance for an extended period, leading to operational issues during the loading and unloading of ships. The continuous operation of these crucial components and improved port efficiency depend on establishing a thorough maintenance plan.

In a period characterised by an increasing focus on digital transformation, Transnet must align itself with the current global digital technology trends in the maritime and rail industries. Integrating digital solutions will improve the organisation’s capacity to strategise, allocate resources, and communicate efficiently, leading to decreased congestion and improved adaptation to evolving supply chain requirements.

Strategy Execution

Despite significant time, money, and effort investments, Transnet has faced challenges in effectively implementing its objectives and strategies. To increase the likelihood of success, the company must involve executives who can effectively address the following issues:

▪Ensuring the feasibility of strategy execution during the formulation process.

▪Establishing clear expectations for strategy implementation, including communicating roles and responsibilities to all stakeholders.

▪Managing performance and allocating responsibility for critical tasks.

▪Developing a communication strategy to achieve consensus among stakeholders for implementation.

▪Assessing organisational bandwidth to ensure managers can efficiently fulfil their duties.

By addressing these concerns, Transnet can progress towards achieving the intended results of its strategies.

So, a determined and confident leader with keen strategic insight is needed to spearhead the transformation initiatives at Transnet as the Group CEO rather than appointing an inept individual with political connections.