Many have celebrated the fall of Transnet boss Portia Derby, as though executive leadership was the sole cause of the entity's disintegration. Now that the Transnet crisis has been personalised around her, you may think the problem is solved and a suitable replacement is around the corner.
Hardly. Anyone putting up their hand for that role in the current environment should be assumed certifiably mad, or a chancer.
Derby's departure is just half a page in a long book on state capture and failed leadership. Pinning Transnet's operational failures on her does not explain the full story of what has happened at Transnet since 2018, when the Zuptas were chased away from running South Africa.
Transnet was one of the badly captured entities but was still in decent operational and financial health. Derby justifiably cops much blame for how it disintegrated under her watch.
Under her, the baby was thrown out with the bathwater when scores of people were driven out to make way for a new, clean team to undo state capture. The same happened at Eskom, when the entity was denuded of engineering capacity when state capturers were driven out — along with throngs of good people.
André de Ruyter and Derby were signature appointments at SOEs under the “new dawn”. That they have both left represents a 100% failure rate, with which public enterprises minister Pravin Gordhan and President Cyril Ramaphosa must contend.
The boards of these entities and the government thought these were skilled leaders. They could not have become bad overnight if they were indeed capable, strong leaders.
The mess that is SA’s balance sheet cannot be resolved through spreadsheets and PowerPoint presentations. It is a political problem
We are clearly dealing with the politicians' poor judgment, and potentially their contribution to the executive failures, as much as the follies of the departed CEOs. Ramaphosa and Gordhan owe each other, and all of us, a visit to the mirror, together and individually.
But they will likely move on to another chapter of rewriting state capture and continue looking for CEOs at Eskom and Transnet. No-one can fix these organisations under the current system of political dysfunction. They are both far too corrupt and broken.
We have to imagine a new set-up instead of this painful requiem for apartheid creations such as Eskom and Transnet.
The ANC cannot reform the economy fast enough because of a lack of ideological clarity and skills. What is required is the dilution of the risk, which is concentrated in the failing state.
We need someone with the capacity — in this case, the private sector — to play a much more significant role in offering the services that the state fails to provide.
Speedy energy sector reform would render Eskom's generation division redundant — which would be a sign of ANC success. The government can still take the credit when its policy metamorphosis keeps the lights on, albeit by reducing its own role.
We need to take a sledgehammer to the current organisation of state assets, and have them bought by people with a better, more flexible balance sheet. That is the reality of life.
The ANC has ruined most of what it got from the apartheid government, and the fact that some family silver must be sold cannot be ignored. The more we go down the dark hole of SOE collapse, the more our assets will be submerged in public debt and economic mayhem.
While we personalise Transnet's problems, another train will smash us soon: its debt cliff. This part of the crisis receives little attention yet stands out as a big risk to the economy.
A Transnet default would mean the debt of other state entities could become repayable due to cross-default clauses. That would throw out the national budget's contingent liabilities framework. This would cause havoc among domestic investors, such as banks that are overweight on state bonds. It would be the realisation of a systemic crisis.
It is unlikely that Transnet would be allowed to default, but avoiding this will require nervous moments at the National Treasury as it looks for more money to avert the crisis.
The debt will be refinanced at far more unfavourable terms, under junk conditions. The dreaded debt spiral is in play now as we sink deeper into the dark, dingy hole of decades of ANC misrule.
Solely blaming “state capture” for our problems, or the likes of Derby, fails to properly analyse what we are dealing with. State capture was an ANC creation: it happened because of the ANC, which created a docile and corruptible public service that could be captured with the help of its leaders.
We cannot bank on the ANC to undo this mess. We are on a rocky fiscal path, made possible by poor political leadership.
Recent ideas from the state about reorganising government departments and placing SOEs under a holding company have a lot of preconditions that must be met for the project to succeed. One is the management of the debt of the entities, which cannot be moved around into slots as if one is playing games such as Monopoly or Snakes & Ladders.
The mess that is South Africa's balance sheet cannot be resolved through spreadsheets and PowerPoint presentations. It is a political problem, and the discourse needs to be refocused towards that.
* Mkokeli is lead partner at public affairs consultancy Mkokeli Advisory. He is a former public enterprises spokesperson.
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