Logistics reforms cannot be rushed: Transnet acting CEO Michelle Phillips
Rail and port operator yet to appoint substantive leadership team
State-owned rail and port operator Transnet has told the government it needs more time and cannot meet deadlines beginning next month in a roadmap to address the country's logistic problems, its acting CEO said on Tuesday.
Transnet has struggled to provide adequate freight rail and port services because of equipment shortages and maintenance backlogs after years of underinvestment. Rampant cable theft and vandalism have also damaged the network.
Exporters, including South Africa's miners, say they have lost millions of dollars as a result, with knock-on effects for the economy, but Transnet said trying to rush solutions would not help.
“We are in discussion with the National Treasury and the shareholder on some of the dates,” Transnet acting CEO Michelle Phillips told Reuters on the sidelines of the Investing in African Mining Indaba in Cape Town.
“We have provided alternate dates because if you go to the logistics roadmap, there are a number of transactions with dates, a number of them speak to March this year. It can't be done by me, and I don't think we can do it as Transnet.”
In December, the government approving funding for Transnet together with the Freight Logistics Roadmap that plans for greater private sector involvement in the country's rail and port networks. Its provisions also include:
- the creation of a separate infrastructure management unit and a timeframe that envisages appointing an infrastructure manager by March 2024; and
- allowing requests from private players for rights to operate parts of the freight rail network from April.
The utility is yet to announce replacements after the group CEO and head of the flagship freight rail subsidiary left last October. The Transnet board chairperson has said the vacancies could be filled by the end of this month.
Phillips said Transnet supported the proposed reforms but was concerned that if things were rushed “we are going to make mistakes.
“We have engaged and they [shareholders] are considering our request. I would want to give them the space to consider.
“My focus now is to get operations at the right levels so that we can satisfy our customers, while working on the future.”
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