In a frightening tale of decline, Transnet’s financial and operational trajectory resembles a ship lost at sea, adrift in a storm of mounting losses that now total billions of rands. The once-mighty state-owned transport entity is beset by a crippling underperformance in its operations, casting gloom over South Africa’s economic landscape. The repercussions of this mismanagement ripple outward, threatening to undermine the very foundations of the country’s prosperity.
By Themba Khumalo
Transnet’s financial troubles have worsened significantly, with the state-owned entity reporting a massive loss of R7.3 billion for the year ending March 2024.
This figure not only surpasses the R5.1 billion loss from the previous year but also underscores a troubling pattern, marking the second year in a row Transnet has been engulfed in fiscal turmoil.
The stark increase in losses serves as a clarion call, highlighting the urgent need for strategic reassessment and recovery.
The executives and the board of Transnet would have us take their word as gospel, declaring that recovery is on the horizon for a company long beleaguered by the follies of incompetent leaders and a woeful lack of investment in its critical infrastructure. Yet, the reality remains starkly at odds with their assertions, as the figures continue to paint a grim picture, with the freight rail and port operations trapped in a quagmire of inefficiency and turmoil, casting doubt on the veracity of their claims.
In an awful display of operational paralysis, Transnet continues to falter in its most elemental responsibility: enabling exporters to transport their wares to market and allowing importers to receive their goods at the ports. This failure is a formidable barrier to economic progress. For the year ending 31 March 2024, Transnet reported a meagre movement of 151.7 million tons of goods via its rail network, a mere 1.5% increase from the previous year’s 149.5 million tons—numbers that reflect stagnation rather than the dynamic growth our economy desperately craves.
The rail volumes achieved are a glaring reflection of the inadequacies of Transnet’s recovery plan, which had boldly aimed for the ambitious target of 154.4 million tons in the 2023/24 financial year. Instead, the actual performance fell short by a dismal 1.8%, a sobering reality that Transnet attributes to never-ending cable theft, derailments, and the ongoing struggles of a beleaguered rail network. In a bold attempt to regain its position, the recovery plan aims to boost rail volumes to 193 million tons by the end of the 2024/25 fiscal year.
During a results presentation on Monday, Transnet board chair Andile Sangqu meandered through a monologue, suggesting that the company’s financial debacle could have been mitigated if only the board and management were not so preoccupied with “legacy issues.” How convenient for Sangqu to shift the blame away from his board’s inability to steer Transnet back on course.
But let’s be real: this is not a remedy, it’s a feeble excuse.
We demand concrete outcomes outlined in the recovery plan, not a litany of grievances about the past. Eskom, too, has its share of legacy baggage; yet after 160 days of uninterrupted power, it’s clear that its leadership is focused on solutions rather than serving up a buffet of pathetic justifications.
The progress at Eskom is the direct result of a board and executives who truly understand the ins and outs of the business. These remarkable leaders, armed with top-notch qualifications and vast experience, are exactly what is needed to tackle the challenging demands of their positions with unmatched skills.
The Transnet board and executives seem to take for granted the immense significance of the entity’s operations within the South African economic framework. This state-owned enterprise is the primary artery for transporting the lion’s share of the country’s iron ore and coal to the far reaches of the globe. Additionally, Transnet is critical in the movement of freight and fuel throughout the country. It is also a vital conduit for importers to access their goods at ports.
When Transnet stumbles, it doesn’t merely disrupt operations; it paralyses businesses and stifles South African exports.
The SOE’s escape from its financial morass hinges on recruiting astute minds equipped with the necessary expertise, alongside individuals possessing the steady resolve to steer the organisation back to stability. Without the infusion of such talent, the spectre of further disaster looms large. The current leadership appears tragically lost, lacking the fundamental awareness of their operational environment and the dynamics at play.