No good news flows out of Transnet nowadays. By all accounts, the state-owned rail and ports company is on life support.
It has become costly to its customers, to the fiscus, to the economy and to South Africans in general.
Multiple business organisations, including the Minerals Council and business chambers whose members are feeling the effects of a dysfunctional Transnet, have called for the sacking of group CEO Portia Derby and the head of its freight rail division Siza Mzimela.
But it’s a cop-out to lay all the blame at the door of the two executives. They inherited an entity that was headed for trouble. When they arrived in 2020, the company was deep in the clutches of state capture. Previous bosses had taken out huge loans to purchase hundreds of locomotives from China in a grossly inflated deal, with Gupta-linked advisers scoring billions of rands. Half of those locomotives and spare parts are still stuck in China.
These crooks, inside and outside the company, are not just stealing from Transnet and the miners. They are stealing from the fiscus, the country and all of us
When she came in, Derby sought to clean up Transnet and rid it of those who were involved in the parastatal’s capture. However, she went about it the wrong way. She offered voluntary severance packages that were taken up by highly experienced and skilled employees, including rail engineers, mechanics, train drivers and management experts.
These skills were lost to Transnet overnight, and the result has been gross dysfunction of an entity that is the lifeblood of the economy. Critical industries, including mining, agriculture and the automotive sector, depend on functioning railways and ports to transport commodities and other bulk goods.
It has not helped Derby to surround herself with fairly inexperienced executives who may not possess the required skills to run a complex operation such as Transnet.
At the same time, vandalism of the rail infrastructure was spiking. Last year the company reported that 1 ,000km of copper cable used to power electric locomotives had been stolen in a single financial year. It was spending R1.6bn on security and another R400m to replace these cables. She’s had to deal with the effects of Covid-19 and the KwaZulu-Natal floods.
Derby and her executive team would not have imagined that crooked employees, working with middlemen, would attack the company from within, with trains dispatched to coal miners being diverted for employees’ personal gain.
We report today how up to 25 ghost trains were operated on the Transnet Freight Rail (TFR) network between December 2022 and February 2023, netting corrupt employees millions in illicit kickbacks.
The Special Investigating Unit (SIU) has been roped in to help dismantle the syndicate comprising dispatchers, staff at ports and control, and the middlemen who pay them to divert trains. Having to deal with the theft of trains in broad daylight adds to the many headaches Derby and her leadership team face.
But as one expert observed, there is a simple solution to reduce or eliminate this problem entirely. Other countries, including Zambia, have installed trackers on their freight trains, allowing them to monitor their movement in real time. Why is it that no-one at TFR has thought of using similar technology?
It underlines the lack of urgency on the part of management and its political authority in eliminating corruption and fixing operational problems.
Given the centrality of Transnet to our economy, eliminating corruption and theft at the company should be a priority. The SIU, and all law enforcement authorities probing the criminality crippling Transnet, should speed up their investigations and make sure everyone involved is brought to book.
These crooks, inside and outside the company, are not just stealing from Transnet and the miners. They are stealing from the fiscus, the country and all of us.
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