Minister of Public Enterprises, Pravin Gordhan has put his weight behind the board of Transnet to come up with remedies to turn the parastatal around, despite numerous calls for its CEO and executives to be axed.
Gordhan was reacting to correspondence from the Association of South African Chambers (ASAC) in which its members have called for decisive action to resolve the issues impacting the economy because of Transnet’s underperformance.
Last week, IOL reported on a scathing letter penned by the Durban Chamber of Commerce and Industry to Gordhan calling for the removal of Transnet Chief Executive Officer Portia Derby and her executive team.
South African mining companies also recently reported shrinking revenue and profit margins as a result of Transnet’s inefficiencies in exporting ore and called for experienced personnel at the leadership of the state-owned group.
ASACs correspondence followed a directive that Gordhan gave to the Board of Transnet about three weeks ago to urgently produce a convincing turnaround plan within one month in a bid to quickly address the derailment of the group’s operational and financial performance.
"I am confident that the board understands the scale of the challenges that are confronting Transnet, and I can assure the South African public that the board has my full support in its effort to come up with the requisite remedial actions. We will be engaging the chambers," Gordhan said in a statement issued by his department on Tuesday.
The recently announced annual financial results of Transnet have also made it very clear that the entity urgently required serious interventions that would address the root causes of the deficiencies that had a negative impact on the economy and hurt export competitiveness, he said.
"The board is seized with the injunction that I have given it, and I am sure that the issues that have been raised by the Chambers will be addressed in its recommendations or in the feedback that the Board will present to the shareholder. The shortcomings of Transnet are of national concern," said Gordhan.
Among the issues Gordhan instructed the board to consider were operational transformation, root causes, stringent and rigorous accountability oversight, management review, information and operational data transparency, excessive cost structure, and employee engagement.
IOL