Busa working with the government to try to fix Transnet

A ship moors outside Cape Town harbour, behind the harbour-control tower of Transnet. Photo: AFP

A ship moors outside Cape Town harbour, behind the harbour-control tower of Transnet. Photo: AFP

Published Oct 9, 2023


Business would be keen to participate in South Africa’s logistics systems, most of which currently resided under Transnet, when the right frameworks were in place to facilitate third party access, Business Unity South Africa (Busa) deputy CEO Khulekani Mathe said on Friday.

Busa was asked a number of questions by Business Report in the aftermath of the resignations last week of three of Transnet’s top executives, and growing concern among many organisations and trade unions about the corruption and inefficiency at Transnet’s freight rail and port operations.

The crumbling rail infrastructure is causing the loss of thousands of mining jobs, billions of rand of lost turnover to mining groups, billions of rand of lost tax revenue and putting the country’s export infrastructure as a whole in jeopardy.

“We are encouraged by the fact that there is a new Transnet board that seems to be taking the calls that have been made repeatedly by business and unions alike in the past about the poor performance of the executive team that has just resigned,” said Mathe.

“We would urge the board to appoint an executive team that has the requisite skills and experience in running the freight rail system to turn things around,” he said.

“Fixing Transnet is one of the actions needed to address our transport and logistics crisis. One of the work streams of the National Logistics Crisis Committee (NLCC) is focusing on improving the operational performance of Transnet – the NLCC was a structure set up by President Cyril Ramaphosa through which business and government work together in a partnership.”

Mathe said Busa met with Transnet regularly as part of the NLCC to explore a range of measures to improve the freight logistics network and its performance.

Third party access was provided for in the Rail Policy whose implementation was the responsibility of Transnet and the Department of Transport.

“Our participation in the NLCC underscores our concern about Transnet,” he said.

Key findings from the auditor-general’s report on Transnet for the 2022/23 financial year included: operational inefficiencies; a significant decline in performance targets – only 26.3% of annual targets achieved; security and criminality; financial reporting concerns, notably material misstatements, revenue collection inefficiencies, and irregular expenditure; procurement and contract management issues; internal control gaps; and a lack of disciplinary actions against officials responsible for irregularities.

There were also IT infrastructure vulnerabilities and corruption that entailed the collaboration of certain sections of the private sector and Transnet staff as reflected in “ghost trains”.