Following the revealing 2021 World Bank index that placed Transnet’s container port performance at a lowly 364th out of 370—with two other Transnet ports also languishing in the bottom 10—the Durban Chamber of Commerce has intensified its call for a shake-up at the top tiers of Transnet’s leadership.
Addressed to Transnet board chair Andile Sangqu and public enterprises minister Pravin Gordhan, the Chamber’s letter strongly advocates for the dismissal of several key executives, prominently including CEO Portia Derby. Citing the continual decline of both port and rail services, the Chamber underscored the resultant revenue losses affecting not just Transnet, but its broad client base.
The Chamber, which represents an extensive network of 2,900 businesses spanning from small to large enterprises within the city, communicated its urgent concerns: “Businesses are grappling with dwindling revenues daily due to port inefficiencies; this state of affairs is untenable.”
They further stressed that the current leadership, particularly Derby and her team, have repeatedly exhibited inadequacies. The Chamber’s letter asserts, “Transnet is in dire need of an executive team that embodies accountability, transparency, and most critically, one that approaches this pressing issue with the urgency it demands.”
Gordhan has recently tasked the Transnet board with formulating a financial recovery strategy. This directive followed a substantial reported loss of R5.7bn for the fiscal year ending March 31, 2023. This financial decline is exacerbated by TFR’s underperformance, with rail volumes registering a decline of 13.6%, from 173Mt in the 2021/22 period to 149Mt in the current review period. Additionally, Transnet’s daunting debt stands at R130bn, incurring R1bn in monthly interest.
These financial woes coincide with Transnet’s move towards the partial privatisation of its flagship Durban container terminal (DCT 2). Recently, the company has named Philippines-based International Container Terminal Services Inc (ICTSI) as its preferred partner to manage the port for an upcoming 25-year tenure. This landmark privatisation deal comes amidst criticism directed at Transnet for the inefficiency and unreliability of its ports, as glaringly indicated in the World Bank’s 2021 rankings.
The Chamber’s letter resonates with sentiments previously expressed by the Minerals Council in December 2022. The industry body had then implored Gordhan to consider the termination of Derby’s tenure in light of Transnet’s deteriorating performance. In a twist, following this appeal, a collaborative initiative was agreed upon between the then Transnet board chair Popo Molefe, the company’s board, and the Minerals Council leaders, aiming to enhance the efficiency of South Africa’s rail and ports systems.