Gordhan denies interfering in Eskom CEO selection‚ weighs in on Transnet

After a week of turmoil at both Eskom and Transnet, public enterprises minister Pravin Gordhan on Monday denied his department was interfering in the operations of the two parastatals.

Transnet on Friday confirmed its group CEO Portia Derby and CFO Nonkululeko Dlamini would be leaving the parastatal and announced interim replacements for both.

Business Day reported on Monday there is pressure on Transnet Freight Rail (TFR) boss Siza Mzimela to resign amid poor performance from the division — the largest in the utility.

Transnet’s R5.7bn loss for the 2022/23 financial year was largely driven by TFR’s worsening performance. Rail volumes dropped 13.6% from 173-million tonnes in 2021/22 to 149-million tonnes‚ the publication reported.

Eskom has also come under scrutiny after a Business Day report revealed the minister had told the board to consider candidates above the age of 60 for the contentious post.

This after Gordhan rejected the board’s submission of one candidate‚ saying it fell short of the memorandum of incorporation (MOI).

Gordhan denied claims of interference with the process of appointing a new CEO and allegations that he rejected the board’s selection‚ telling 702 radio station he wanted the process to be “concluded sooner rather than later”.

“I reject both those allusions because it is popular to find a scapegoat to explain what things happen or don’t happen‚ so I reject both those ideas. Companies have a document‚ let’s call it the constitution of a company‚ which is called a memorandum of incorporation.

“This tells the company what it can and can’t do and very clearly. Within the state entities‚ such as Eskom‚ boards are supposed to identify three individuals and three names need to be submitted,” he said.

“We were confronted with the violation of the MOI by the submission of one name. It had to be referred back to the board. I have not interfered. This is a formal‚ legal process that needs to be followed and the board understands what it has to do.”

This doesn’t mean the process will have to start over‚ Gordhan clarified‚ as there are “shortened routes that can be taken” to fast-track the appointment.

Speaking about Transnet and Derby’s exit‚ Gordhan said: “Officially‚ from what I have been told‚ she’s decided to pursue other interests. The board is in the best position to comment on the details because they’re the ones who were engaged with this issue. Regrettably‚ one of the bright and relatively young people has to move on.”

The minister conceded that something had “to be done on the rail side” as the decline in performance was “unacceptable”.

Asked if he had confidence in Mzimela as TFR CEO‚ Gordhan said: “I think she’s relatively new and is not familiar with the sector. She’s probably tried her best. But there are a lot of experienced people in the recent past who have been associated with rail for years and I think that kind of institutional knowledge you can’t develop overnight‚ with a few exceptions.”

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