South Africa’s transport industry is still absorbing the unexpected announcement on Friday that the state-owned logistics utility will be without its group chief executive, Portia Derby, from the end of October.
On Friday The Citizen reported that Transnet had officially announced the resignation of Derby from her position, an unexpected that many from South Africa’s freight forwarding fraternity say is long overdue.
The parastatal’s group chief financial officer and executive director on Transnet’s board, Nonkululeko Dlamini, has already tendered her resignation a month ago, and left the board on Friday, September 29, the same day as Derby’s departure was announced.
Although Derby is said to have reached an amicable separation agreement with the board, Freight News understands she was asked “to go in as dignified a manner as possible or be fired.”
This opinion was aired by a member of the South African Association of Freight Forwarders whose name is being withheld.
Since Friday’s news about Derby broke, it’s been widely reported that the resignations come in response to mounting pressure from the Association of South African Chambers for the removal of the Transnet board.
The Association has taken a strong stance against Derby’s failure to turn Transnet around after it was gutted by state capture enablers like Siyabonga Gama and Brian Molefe.
Derby was married to Molefe but got divorced about ten years ago.
According to The Citizen, the Association contends that the board’s actions have led to Transnet’s underwhelming performance, especially at the ports and with rail freight.
Transnet has defended Derby, praising her for steering the company through a notably challenging period.
It said this period was marked by the suspension of the 1064 locomotive contract, an event that continues to pose significant constraints on Transnet.
Additionally, the company faced various setbacks, including the global Covid-19 pandemic, subsequent cyberattacks on its ICT systems, floods in KwaZulu-Natal, and a labour strike towards the end of 2022. Each of these incidents has had adverse effects on Transnet’s operations.
Notably, the floods necessitated a substantial capital outlay to restore the critical Container Corridor between Johannesburg and Durban to full functionality.
The Citizen added that the calls for the removal of the Transnet board have also elicited a response from Public Enterprises Minister Pravin Gordhan.
Gordhan acknowledged the challenges facing the company while expressing confidence that the board is fully aware of these issues.
He said: “The recently disclosed annual financial results of Transnet have made it abundantly clear that the organisation urgently requires significant interventions to address the root causes of its deficiencies. These deficiencies are having a detrimental impact on our economy and harming our export competitiveness.
“The board is fully aware of the imperative I have given them, and I am certain that the concerns raised by the Chambers will be addressed in their recommendations or in the feedback presented to the shareholder. Transnet’s shortcomings are of national significance.
“I have faith in the board’s understanding of the magnitude of the challenges confronting Transnet, and I can assure the South African public that the board enjoys my unwavering support in its endeavours to devise the necessary remedial measures. We will engage with the Chambers,” Gordhan said.
Michelle Phillips, the chief executive of Transnet Pipelines, will assume the role of Acting GCE from November 1 until a permanent GCE is appointed.
Hlengiwe Makhathini will act as group CFO while a permanent replacement is sought.
Derby will be available until the end of the calendar year to support the acting GCE and the board as part of the handover process, The Citizen reported.