Transnet CEO and CFO quit

Two top executives at South Africa’s beleaguered state ports and rail operator quit after facing criticism by mining companies over their failure to arrest its decline.

Transnet SOC Ltd. chief executive officer Portia Derby will step down at the end of October, while chief financial officer Nonkululeko Dlamini will leave a month earlier, the company said in a statement on Friday.

The board appointed Michelle Phillips, chief executive of Transnet Pipelines, as acting group CEO with effect from Nov. 1.

Inefficiencies at Transnet may have cost the country R150 billion in exports last year, according to the Minerals Council.

Volumes of iron ore and coal shipped through Transnet’s freight rail network for export have dropped because of issues including vandalism, idle locomotives and cable theft.

Miners and labour unions have called for a turnaround at the company as the slowdown of shipments limits profit and threaten jobs.

Glencore Plc and Seriti Resources Holdings Ltd. over the past two weeks have started talks to cut hundreds of jobs in South Africa as their ability to export coal is stymied by inefficiencies at the freight company.

South African Public Enterprises Minister Pravin Gordhan pledged on Sept. 1 to implement a “radical plan” for Transnet and stem the deterioration of its operational and financial performance.

The government revamped its board in July and appointed a former mining executive as its new chairman.

Transnet’s rail operations were also affected by a strike last year, along with floods and power supply disruptions caused by state-owned utility Eskom Holdings SOC Ltd.’s inability to meet demand, it said in its latest results.

Derby was appointed as CEO in 2020 with a mandate to rebuild Transnet’s reputation.

The company had been a central target during a period of rampant state corruption under former President Jacob Zuma.

A government probe identified irregular contracts worth a total of R41.2 billion over a period of almost decade.

Trouble continued for the company with trains derailed by groups seeking the contracts to fix them and locomotives being left idle because of spare-parts shortages.

Derby changed the company’s security strategy and proposed other measures, including shrinking its 20,000km freight rail network and using more diesel-powered trains to bypass electricity issues.

Shipments on Transnet’s dedicated coal line still failed to pick up pace, leading to calls for Derby to resign.

Acting CEO Phillips first began working at Transnet in 2001, it said in a separate statement.

Her experience prior to joining the company includes working as a legal representative at South Africa’s Special Investigating Unit.

Hlengiwe Makhathini will act as group CFO while a permanent replacement is sought, Transnet said.

Now read: South Africa’s R50-million “ghost train” criminal syndicate

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Transnet CEO and CFO quit