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Business sees appointment of Phillips as key step in accelerating Transnet Recovery Plan

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Photo by Creamer Media

29th February 2024

By: Terence Creamer

Creamer Media Editor

     

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Organised business says the appointment of a permanent executive team at Transnet – led by CEO Michelle Phillips, who has been acting in the role since September and who has been with the utility for 20 years – will enhance stability in the relationships between Transnet and the business sector and accelerate the implementation of the Transnet Recovery Plan.

Phillips’ appointment was announced by Public Enterprises Minister Pravin Gordhan on February 28 alongside that of Nosipho Maphumulo, who has been appointed CFO.

“We have, over the past months, seen a much-needed improvement in the relationship between the country’s transport and logistics authorities and those businesses whose existence is dependent on efficient and effective logistics,” Busa president Mxolisi Mgojo said in a statement.

Likewise, Business Leadership South Africa CEO Busisiwe Mavuso said Phillips had demonstrated decisiveness and an ability to get things done over the past six months, during which business had intensified its collaboration with the utility in support of its recovery.

“Ms Phillips knows what business and government are trying to achieve with the Business for South Africa freight and logistics partnership.

"She was the acting CEO when we achieved a 45% reduction in vessels anchored outside Durban port and a 36%reduction in the waiting time to anchor for container vessels," Mavuso added.

The Minerals Council South Africa, whose members raised grave concerns about the utility's previous leadership, also congratulated Phillips and Maphumulo on their appointments and suggested that "green shoots" were showing in relation to Transnet's turnaround.

"The Minerals Council notes Ms Phillips’s commitment to implementing the Transnet Recovery Plan, which includes sustainable cooperation with the private sector to improve operational efficiencies," the council said in a statement, noting that mining accounted for about 80% of Transnet Freight Rail’s annual revenue. 

The Minerals Council and its members were actively involved in four corridor optimisation processes to stabilise the performances of the railways serving the coal, chrome, iron-ore and manganese mines, with miners having resorted to more expensive road transport in many instances.

"Returning bulk commodities to rail is a priority for the mining industry."

Mgojo, who is also CEO sponsor of Business for South Africa’s transport and logistics focal area, stressed that the progress made to date represented but the first step in addressing the crisis.

“Stability is essential to sustain the good work being done,” he added, noting that the poor performance of the country’s rail networks and ports was costing the economy an estimated R1-billion per day, with about R50-billion lost in the minerals sector alone in 2023.

Business is participating in the National Logistics Crisis Committee set up by President Cyril Ramaphosa in 2023 to improve Transnet’s operational performance, implement rail and port reforms and to create enabling conditions for the freight transport system to operate effectively.

“Though we are not yet close to the realisation of our ultimate objectives, there have been tangible and encouraging advances,” Mgojo said.

In particular, Busa highlighted the approval by Cabinet in December of the Freight Logistics Roadmap and the Rail Private Sector Participation framework, the establishment of an Interim Infrastructure Manager by Transnet Freight Rail, and the signing of mutual cooperation agreements allowing customers to assist with the procurement of spare parts.

It also noted the approval of a R47-billion guarantee facility for Transnet by the National Treasury, the deployment of technical experts from business into Transnet, and the implementation of best practices into day-to-day operations. 

“We expect that with skilled and experienced executives now permanently appointed in key positions within Transnet, there will be a strong foundation on which to further drive implementation of the company’s recovery plan,” Mgojo said.

Edited by Creamer Media Reporter

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