Spoornet CEO Dolly Mokgatle was swept out of the second hardest executive job in the country this week, because she couldn’t hold her own against the woman who has the hardest — her boss, Maria Ramos.
Spoornet, with R18-billion in revenues, is at the heart of the government’s economic growth strategy and to Ramos’s plans for Transnet. It is also struggling with ageing infrastructure, mounting losses — R509-million in the six months to September 2004 — and a bloated parastatal culture.
No official reason has been given for Mokgatle’s departure. But in the wake of her resignation, insiders at Transnet and Spoornet sketched a picture of steadily worsening relations between the two women, as Ramos pushed for accelerated improvements at the troubled rail giant and Mokgatle bridled at what she saw as incursions on to her turf.
But it wasn’t simply a clash of boardroom egos. Both aides to Ramos and Spoornet insiders say Mokgatle struggled with crucial tasks, including the recapitalisation of the coal-link line from the collieries of Mpumalanga to Richard’s Bay, negotiations to restore and increase capacity on the Sishen-to-Saldahna Bay iron ore line, and the revitalisation of the general freight business.
Industry sources said one specific problem may have been the stalled tender process for new locomotives to run on the coal-link and ore lines, after Mokgatle suspended the awarding of a contract to Japanese industrial giant Mitsui.
By the end of the year, according to a Transnet executive, the chorus of complaints from business — increasingly going directly to the government or to Transnet head office — was becoming too loud to ignore. Companies such as iron and coal miner Kumba, cement-maker PPC and petro-chemicals firms and car manufacturers queued up to protest at the toll of shabby rail services on their business.
The mismanagement of a $5-billion concession to revamp the Zambian network — exclusively reported in December by the Mail & Guardian — was the last straw, sources said. Mokgatle allegedly refused to take responsibility for Spoornet’s failure to meet its targets in terms of the concession agreement.
Individual crises aside, however, insiders suggest that Ramos and Mokgatle never shared a common vision for Spoornet. Mokgatle told the Sunday Times shortly after her move from Eskom that she ”wanted to control a business”. Ramos, however, looked at the problems of Spoornet from the perspective of the Transnet group, and wanted to drive things from the centre.
”Mokgatle wanted to run her own show,” said one Transnet official. After her appointment in June 2003, Mokgatle spent a painstaking six months establishing a vision and strategy for Spoornet, which Ramos immediately wanted to change when she took up her post in January 2004.
Ramos is by her own admission a ”taskmaster” who expects her team to keep up with her relentless pace. When she left the Treasury in September 2003, she remarked that not even her house plants could survive her work habits.
Aides say she is driven by a national vision in which Transnet’s role is seen as essential to economic growth. Because she views her mission as national, she makes short shrift of the racial barbs hurled at her and has culled managers she considers underperformers — even those with strong political connections — ruthlessly.
However, she still has strong Cabinet backing, government officials say, and a mandate to get the job done.
Alec Erwin made a telling public declaration of support following Tuesday’s announcement. ”The improved performance of Spoornet and its restructuring into an efficient rail transportation provider is a central priority for the economy and needs management that can carry out the task,” he said through his spokesperson, Gaynor Kast.
Mokgatle had few people left on her own team who could back her, operationally or in the boardroom, in a battle of this magnitude.
As critics warned after her appointment was announced, Mokgatle had no technical knowledge of the rail business, and her background was not in operational management. Her struggles with the engineers and technocrats who dominate Spoornet — both the white old guard and more recent appointments — were almost inevitable.
Ahead of her resignation, she suspended three executive directors — including Ravi Nair and Harry Mashele, who were blamed for the Zambian debacle — and fired one.
General manager of finance Althaf Emmamally, whom she had brought with her from Spoornet, then resigned, depriving her of a key ally and leaving her isolated, without a management team to challenge the old guard and drive crucial changes at the company.
With Mokgatle’s departure, Ramos is now free to build her own team, and free of the conflicting loyalties that may have complicated the picture when board and management still reflected former public enterprises minister Jeff Radebe’s bid to turn Transnet around.
Explaining Mokgatle’s resignation, a Transnet executive said: ”All we’re looking for now is someone from a strong operational background. At Transnet, we’ve got analysis, visions and reviews coming out of our ears.”
The executive dismissed talk of a racial backlash against Ramos, saying that, ”her imperative is to improve the economy’s competitiveness. Transnet has many highly-skilled people of all colours.” Those who had bought into Ramos’s vision — and there were many of all races — were finding their space in the revitalised transport parastatal, he said.
Spoornet’s customers, meanwhile are watching the situation closely.
Negotiations are currently under way between Transnet and Kumba Resources, which is heavily reliant on the line from its Sishen mines to the iron ore terminal at Saldahna Bay. It has been so frustrated by capacity limitations that it has offered to help finance recapitalisation.
Kumba operations director Mike Kilbride said, however, that he did not expect negotiations over a joint venture to revamp the line to be seriously affected.
”Our engagements have largely been at a Transnet level, and we think those initiatives will continue. There’s definitely positive progress, which we are quite pleased with.”
The major challenges for Transnet now are to focus on restructuring Spoornet, launch a major investment programme to rebuild its balance sheet and infrastructure, and to reduce by 80% the number of staff working at the Carlton Centre headquarters.
That last objective will certainly entail more turmoil. ”She’s not making any friends,” one person close to Ramos remarked. ”It’s going to be tough.”