South Africa

Transnet Freight Rail boss resigns and hopes ‘current warzone will return to normality’

Transnet Freight Rail boss Siza Mzimela resigns

State-owned entity (SOE), Transnet, has seen another high-profile exit in less than a week after the resignation of Transnet Freight Rail (TFR) chief executive officer (CEO), Siza Mzimela.

Mzimela tendered her letter of resignation on Thursday morning. 

‘Litany of legacy challenges’

In a letter to staff, Mzimela confirmed her departure and praised her now former colleagues for the progress TFR made since she took over the reins in 2020.

“Despite the seemingly endless litany of legacy challenges, which include lack of tools for peak performance, lack of locomotives, crippling theft and vandalism, as well as the ‘potholes’ in the infrastructure system that force slower movement of trains due to our company’s safety-first ethos, you, the people of TFR continued to push forward,” Mzimela said.

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She cited some of TFR’s achievements during her tenure including:

  • Borderless trains in the North East Corridor, which reduce transit times and increase freight volume in chrome and magnetite;
  • Completing the construction of the Mamathwane Crossing Loop in the Northern Cape ahead of schedule, which led to introduction of a new manganese service to the Port of East London;
  • Repair of the container corridor between Durban and Cato Ridge after the devastating damage caused by floods in KwaZulu-Natal, ensuring that operations resumed swiftly;
  • The introduction of new players into manganese, thereby increasing junior miner participation;
  • Simplified structures to ensure efficient performance within the corridors and increasing female representation at executive level;
  • Improved regional co-operation;
  • Rebasing of tariffs with customers as part of reinventing the company for growth; and
  • Global recognition of Transnet’s engineers.

“With solutions to the key impediments mentioned, the current warzone will return to normality and TFR will be fully equipped to truly play its role of circulating the lifeblood of the South African economy,” her letter further reads.

Transnet departures

Mzimela’s departure comes after Transnet CEO Portia Derby and chief financial officer (CFO) Nonkululeko Dlamini both resigned due to the SOE’s underperformance last week.

While Derby’s resignation will be effective from 31 October, Dlamini left Transnet immediately after serving a month’s notice.

Michelle Phillips, the chief executive of Transnet Pipelines (TPL), will temporarily replace Derby from 1 November until a permanent CEO is appointed. Hlengiwe Makhathini will act as Transnet CFO.

Transnet has performed poorly, with the rail entity having reported a R8.8 billion loss for its 2023 year before tax and fair value adjustments after a loss of R4.7 billion in the previous financial year.

According to a study by the GAIN Group, inefficiencies at Transnet are costing the economy R1 billion a day.

Meanwhile, Public Enterprises Minister Pravin Gordhan tasked the Transnet board with creating an action plan aimed at overhauling the company’s operational performance.

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