Shake-up: The South African Transport and Allied Workers Union, as well as business chambers in the country want urgent changes made to Transnet’s management team. Photo: Darren Stewart/Gallo Images
Transnet has called on the South African Transport and Allied Workers Union (Satawu) to help it investigate allegations of procurement and recruitment irregularities the union raised against management of the state-owned entity.
This comes after Satawu threw its weight behind calls to Public Enterprises Minister Pravin Gordhan by the Association of South African Chambers (Asac), the Durban Chamber of Commerce and Industry and the Pietermaritzburg and Midlands Chamber of Business, for a management shake-up at Transnet.
In one letter, signed by Durban chamber chief executive Palesa Phili, the organisation pleaded with the minister to intervene in the state rail, port and pipeline company’s affairs.
It called for the removal of Transnet chief executive Portia Derby and “her executive team”, including Transnet Freight Rail chief executive Sizakele Mzimela and Transnet National Ports Authority (TNPA) chief executive Pepi Silinga. This was after the state-owned entity posted a R5.7 billion loss amid declining rail freight volumes and rising debt costs in the 2022-23 financial year.
Satawu has now alleged in a statement that Silinga — who served in senior management and as chief executive of Coega Development Corporation for more than 20 years — has been joined at TNPA by “the whole team that used to work for CDC” under him “with no experience in this highly regulated division of Transnet”.
These included executive managers, senior managers and fixed term contractors, the union claimed. Asked to name the individuals, Satawu spokesperson Amanda Tshemese declined to do so.
“We not gonna fold hands and do nothing about the dying of Transnet … This leadership couldn’t wait to have their opportunity to come and loot Transnet,” Satawu said.
“Firstly, we need an explanation from the chief people of Transnet to explain why only CDC ex-employees are the qualifying to be appointed at TNPA … We want to put it to you that this recruitment was irregular…
“The same CDC is now the major implementing agency of all TNPA projects. To list a few, the manganese terminal, fencing projects etc. Which procurement process was followed here?”
Satawu added that Transnet had bought generators for R1 billion which were now “a white elephant” because no environmental impact assessment had been completed for the purchase.
“They have not been commissioned; this was shared in the NBC meeting that sat on 19 September 2023. Our question to Pepi is simple, what due diligence was done here before procuring these generators?” Satawu said.
“Transnet is struggling and yet money is spent on things that are not giving no return on investment. TNPA is struggling with their marine services due to old tugs and unavailability, but Pepi saw it fit to prioritise generators over tugs.”
The union said Silinga was also considering outsourcing marine services, thus “killing our marine South African skills”.
“We request the board chair and the GCE of Transnet to conduct an urgent investigation on Pepi and that he be removed from this position with immediate effect.”
In the statement, Satawu said it had obtained a certificate to strike over the matter after filing a labour dispute with the Commission for Conciliation, Mediation and Arbitration regarding “irregular procurement” and “irregular recruitment”.
Responding to allegations in the union’s statement, Transnet said on Wednesday that it had “zero tolerance for corruption and views the allegations levelled in a serious light. In this regard, we have requested Satawu to assist Transnet in investigating the matter, by providing information to substantiate the claims. Any further action will be assessed if/when any information or evidence is provided to substantiate the claims.”
Melanie Vennes, Asac chairperson and chief executive of the Pietermaritzburg and Midlands Chamber of Business, said Gordhan had last week sent his director general and senior officials to Durban to interview unions and business.
But, she added, that although discussions were important, business needed to see action and a turnaround in port service delivery.
“We want to see basic changes — equipment that works and systems that work, let’s get the port working,” Vennes said.
“There are complaints on the ground that the leadership spent exorbitant amounts on generators but failed to do an environmental impact assessment and that they are lying around and not being used, when the port needs new straddles.
“Without a working logistics system we can’t compete, it just makes it impossible for us to compete, not sorting out this issue costs the economy R1 billion a day, so it is imperative and urgent that it gets sorted out. The other imperative thing that needs to get sorted is our north to south rail, there are potentially 35 000 jobs on the line in the coal mining industry, the impact on our economy is massive.”
Vennes said it was “not okay” that Durban Port was rated near the bottom of the World Bank’s Container Port Performance Index, as one of the world’s most congested ports. Durban was ranked 341 and Cape Town 344 out of 348 ports globally in 2022.
“This is not personal about anybody or thing — it’s absolutely critical to get it right in the interests of South Africa. We have a very low growth rate, an electricity crisis. We cannot afford for everything not to work,” Vennes said.
Last week Gordhan said he had noted correspondence from Asac calling for “decisive action to resolve the issues impacting the economy because of Transnet’s underperformance”, but threw his support behind the state-owned entity’s board.
In a statement, Gordhan said Transnet’s recently announced annual financial results had made it clear that it “urgently requires serious interventions that will address the root causes of the deficiencies that are having a negative impact on our economy and are hurting our export competitiveness”.
“I am confident that the board understands the scale of the challenges that are confronting Transnet, and I can assure the South African public that the board has my full support in its effort to come up with the requisite remedial actions. We will be engaging the chambers.”