Portia Joy Derby, chief executive officer of Transnet SOC Ltd., at the Africa CEO Forum in Abidjan, Ivory Coast, on Tuesday, June 14, 2022. Photo: Andrew Caballero-Reynolds/Bloomberg via Getty Images
Outgoing Transnet CEO Portia Derby has told the Mail & Guardian she believes she and her team made “significant progress” at the state-owned entity during her tenure.
Derby said as part of the turnaround strategy, Transnet needed first to focus on implementing improved, modern and automated systems across its six major divisions while operating in an internal environment of systemic corruption, slow and cumbersome procurement processes, a lack of working capital and a high level of criminality.
She said she could have blamed someone else for the failings during her tenure, but that would be “unethical”.
There was no fall guy necessary, she said, and she did not believe she had been made out to be one. “We have kept on saying we still need help with dealing with security and we needed money to deal with the backlog on the maintenance on the rail.”
Derby, who served at the helm of the company for three years, will leave at the end of October.
“The issue around whether Transnet is efficient or not, efficiency in this day and age in organisations is driven by your systems, you have to have modern IT and software and the likes. It is a well known fact that our IT was 100% outsourced for 15 years. It is only now that we are 70% done with taking back control of much of that environment so that we can upgrade it and update software.
“Only once you have upgraded the system are you able to put in the modern applications that will help to run much of our operations efficiently, and the rail in particular, and this is a known fact,” she said.
Automation of procurement was another significant focus, with plans to implement digital procurement to reduce interference and enhance transparency.
“So the possibility of interference will be reduced significantly. That automation exercise is in process and will be implemented. I am pretty sure that in a matter of time things will come through. I do think there are a lot of things [about governance] that must be discussed with the government and this is the overarching governance of the enterprise, not the internal bit,” she said.
In the National Logistics Crisis Committee, which was established to tackle the declining performance of South Africa’s ports and railway system, one of the big issues that needed tackling was fast tracking performance.
Derby said: “The procurement decisions that help procurement move faster and efficiently were only made in August, so my puzzlement will always be, knowing all of this — is Transnet Freight Rail and Transnet’s poor performance a surprise and entirely our fault?”
Derby exits amid scathing reviews from organised business, and more recently Cosatu, which have placed the inability to correct the severe underperformance and systemic corruption at the failing entity at the feet of Derby and Transnet Freight Rail head Sizakele Mzimela, whom Derby appointed.
The M&G previously reported that at least six business organisations had written to public enterprises minister Pravin Gordhan, urging him to fire Derby.
In its correspondence to Gordhan, the Durban Chamber of Commerce and Industry said: “The business community of eThekwini has reached a point where we can no longer tolerate her behaviour,” while alleging that Derby and her executive team were “sabotaging” businesses because of poor service delivery at the Port of Durban.
However, Derby defended the paratstatal’s port record, saying it was turning a profit and would in time improve.
“The ports are performing much better, they are making money, we are in the process of acquiring equipment and none of this stuff is fast,” she said.
Transnet reported a loss of R5.7 billion in 2022/23 and a drop of 23.6 million tonnes in rail freight, down to 149.5 million tonnes.
Derby’s departure leaves South Africa’s two critical state owned entities – Eskom and Transnet – without permanent heads. Both were the biggest targets of state capture and both are still flooded with corruption.
According to a statement released by Transnet on Friday: “During her tenure she worked with the team in Transnet to introduce a private partner for Transnet Port Terminals into the container terminal space, the first of its kind, including working with key stakeholders in introducing reforms, aligned with Government policy, which aim to turn the organisation around, restructure the rail sector particularly, and enable the growth of the freight logistics system.”
Over the past few months, Derby has faced significant scrutiny from the mining sector because of not being able to address the issues plaguing Transnet’s rail network and ports. The Minerals Council of South Africa, representing 80% of the mining industry, has been outspoken in advocating for the replacement of both Derby and Mzimela.
“In the end, I was trained to act in the interest of the organisation and Transnet matters for every single one of us in South Africa, much bigger than me. So the people on the inside have the opportunity to show their metal, which they have been showing frankly,” she said.
Michelle Phillips, the Chief Executive of Transnet Pipelines (TPL) will be the Acting GCE from 1 November 2023, until a permanent GCE is appointed. Hlengiwe Makhathini will act as Group CFO while a permanent replacement is sought.
Lesego Chepape is a climate reporting fellow, funded by the Open Society Foundation for South Africa.