Siza Mzimela, the Chief Executive Officer (CEO) of Transnet Freight Rail (TFR), has tendered her resignation amid mounting pressure from the Transnet board. In a letter addressed to TFR staff last Thursday, she acknowledged the challenges faced during her three-year tenure and encouraged her team to remain hopeful about improving TFR’s performance.
Challenges Under Mzimela’s Leadership
During her time as CEO, TFR’s performance has been less than stellar, resulting in a significant drop in rail export volumes, particularly in the mining sector. This decline has had tangible consequences, with two major coal producers even contemplating employee retrenchments.
Speculation regarding Mzimela’s departure had been circulating in both business and government circles. Her resignation comes on the heels of the sudden announcements of CEO Portia Derby and CFO Nonkululeko Dlamini’s departures, which were made public last Friday.
A Decline in Rail Export Volumes
The decline in rail export volumes is a cause for concern. In the 2018/2019 fiscal year, rail export volumes stood at 213 million tons. However, the last financial year saw a significant decrease, with volumes plummeting to 149 million tons.
Factors Contributing to the Decline
Several factors have contributed to this decline. External factors, such as the global pandemic, rising crime, flood damage, and a cyber attack, have undoubtedly impacted Transnet’s operations. However, there are also indications of internal mismanagement, including a lack of basic controls and outdated systems. These internal issues have resulted in the company achieving only 25% of its targets in the past financial year.
In the wake of these developments, questions linger about the future direction of Transnet Freight Rail. Stakeholders will be closely watching for the appointment of new leadership and the strategies they employ to address these pressing issues.As this story unfolds, South Africans will undoubtedly seek answers to how these challenges will be navigated and whether Transnet can regain its status as a reliable and efficient rail service provider.