‘Transnet will make a mistake if rushed,’ says acting CEO

Transnet has told the government that it needs more time and cannot meet deadlines beginning in March in a roadmap to address the country’s logistics problems, its acting CEO said on Tuesday.

The state-owned rail and port operator has struggled to provide adequate freight rail and port services because of equipment shortages and maintenance backlogs, after years of underinvestment. Rampant cable theft and vandalism have also damaged the network.

Exporters, including SA’s miners, say they have lost millions of dollars as a result, with knock-on effects for the economy, but Transnet said trying to rush solutions would not help.

“We are in discussion with the Treasury and the shareholder on some of the dates,” acting Transnet CEO Michelle Phillips said on the sidelines of the Investing in African Mining Indaba in Cape Town.

“We have provided alternate dates because if you go to the logistics roadmap, there are a number of transactions with dates, a number of them speak to March this year. It can’t be done by me, and I don’t think we can do it as Transnet.”

In December, the government approved funding for Transnet together with the freight logistics roadmap, which plans for greater private-sector involvement in the country’s rail and port networks. Its provisions also include the creation of a separate infrastructure management unit and a timeframe that envisages appointing an infrastructure manager by March 2024; and allowing requests from private players for rights to operate parts of the freight rail network from April.

The utility has yet to announce replacements after the group CEO and head of the flagship freight rail subsidiary left in October. The Transnet board chair has said the vacancies could be filled by the end of February.

Phillips said Transnet supported the proposed reforms but was concerned that if things were rushed “we are going to make mistakes”.

“We have engaged and [shareholders] are considering our request. I would want to give them the space to consider. My focus now is to get operations at the right levels so that we can satisfy our customers, while working on the future.”

Reuters