Africa-Press – South-Africa. The CEO of Transnet Freight Rail (TFR), Siza Mzimela, has resigned.
Mzimela sent a letter to staff on Thursday reminding them of the progress made in the past three years, thanking them for their service, and urging them to not give up the fight to make TFR a success.
Mzimela has come under enormous pressure from the Transnet board to resign over the past four weeks. TFR has performed poorly during her tenure, with export volumes dropping to their lowest levels in years. Both business and organised labour have campaigned for her removal.
The consequence of Transnet’s failure has been that the mining sector missed out on an export commodity boom while other countries, such as Australia, cashed in. The Minerals Council estimated that SA companies forfeited R100 billion in revenue, which would have netted between R40 billion to R50 billion in tax revenues for the state. Two major coal producers have recently announced plans to retrench employees as trucking coal to the ports has become unviable.
READ| Glencore to retrench mine workers as Transnet woes, lower coal prices bite
Mzimela was appointed by Transnet CEO Portia Derby in early 2020. Derby resigned last week, also after coming under pressure from the board. Under Derby and Mzimela, a large number of skilled and experienced staff left the organisation through a voluntary severance arrangement they put in place.
Minister of Public Enterprises Pravin Gordhan, who appointed Derby, earlier this week described Mzimela as “relatively new to the rail sector” and said that there were skilled and experienced people who could do the job that he had learned about in “the recent past.”
While the two have faced challenges outside their control – a political dispute with a Chinese supplier over locomotive parts, the pandemic, rising crime, and flood damage – there has also been evidence of fundamental management failure. A lack of basic controls, outdated systems, and inexperienced staff resulted in Transnet meeting only 25% of its targets for the past financial year.
The company is also in financial difficulty with R130 billion in debt that it cannot service from revenue.
In her letter to TFR employees, Mzimela highlighted the difficulties that TFR has faced in accessing spare parts for the Chinese locomotives, resulting in a train shortage.
The trains were bought by Transnet from China Railway Rolling Stock Corporation (CRRC) by previous management during the state capture era. Large-scale corruption in the contract led to the freezing of funds due to CRRC, with unresolved disputes between CRRC and SARS and the Reserve Bank. Gordhan has been unable to resolve these at a political level.
In her letter to staff, Mzimela says:
Among the achievements during her tenure, Mzimela noted the introduction of borderless trains with Mozambique, the introduction of additional junior miners into the manganese sector, a new manganese export line to East London, and the repair of the container corridor after it was damaged by floods.
*This story has been updated throughout with more details.
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