South Africa
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Plans reportedly underway to rehire hundreds skilled Transnet staff

Transnet faces a leadership crisis. With a significant loss in skilled staff and revenue, what’s next for the struggling utility?

The abrupt resignation of Transnet CEO Portia Derby may pave the way for a comprehensive strategy to revitalise the floundering state-owned utility.

After two turbulent years marked by declining performance and missed opportunities in a burgeoning commodities market, Derby stepped down on Friday, giving in to mounting pressure from mining and industry sectors.

Trasnet shakeup

As reported by The Sunday Times, Derby’s controversial decision to offer Voluntary Severance Packages (VSPs) has backfired spectacularly.

While the move shaved R3.2 billion from Transnet’s wage bill, it also led to the departure of 450 invaluable employees – ranging from engineers to crane operators – with scarce skills.

Consequently, this has weakened an already struggling entity that had previously been targeted for state capture during the Jacob Zuma era.

Transnet, post-Derby

An anonymous senior government leader told The Sunday Times plans are underway to rehire some of the experienced personnel who were let go.

This comes as other top brass in the company, such as Transnet Freight Rail CEO Siza Mzimela, are rumored to be considering their own exits.

Meanwhile, Public Enterprises Minister Pravin Gordhan is pushing for a quick turnaround.

After the utility reported a dismal R5.7 billion loss and dwindling revenue, Gordhan tasked the board with creating an action plan aimed at overhauling the company’s operational performance.

READ: Gordhan ‘confident’ in Transnet board amid calls for change in leadership

The Domino Effect

It remains unclear if the board’s suggestions will lead to further leadership changes, but the minister seems focused on drastic improvements.

That said, the repercussions of Transnet’s plight extend far beyond the company itself.

Business chambers, labor unions, and the Minerals Council have all demanded decisive action, blaming Transnet’s inefficiency for severe economic fallout.

Notably, there are looming threats of massive layoffs in the mining sector, further exacerbating South Africa’s employment crisis.