http://www.businessday.co.za/articles/C ... ?id=135017
Delicate footwork required
TRANSPORT parastatal Transnet is often described as a pivotal cog in SA’s transport infrastructure.
Published: 2011/02/22 07:45:39 AM
TRANSPORT parastatal Transnet is often described as a pivotal cog in SA’s transport infrastructure. In fact, this is something of an overstatement. The rail portion of Transnet is crucial to only two industries: coal and iron ore. Much of the rest of South African industry gave up years ago and, as a result, the roads from Johannesburg to Durban or Cape Town are a seemingly never-ending procession of trucks.
That said, Transnet’s ports business is much more crucial for the economy, and its pipelines are vital. But the heart of Transnet is the railways, and it is this conundrum that faces new CEO Brian Molefe.
Up until now, Transnet has been something of a relegated organisation, operating outside of the Department of Transport with its own minister — an absurd arrangement. It remains a bit of hotchpotch, despite the sensible decisions to hive off South African Airways and to privatise some of the property portfolio. Yet its importance has recently been rediscovered, by a government with a new enthusiasm for infrastructure development. Mr Molefe therefore enters an organisation on the rebound, and it is crucial that he maintains that momentum.
Ironically, Mr Molefe’s previous job as a financial manager is not much help. Most of Transnet’s financial problems have been largely straightened out by his predecessor, Maria Ramos. His most critical task will be to create an effective organisation at the administrative level. He will need to win back customers from the many logistics groups that have filled the gap during Transnet’s slumber, and they will not cede ground easily.
To do this, he will need a strong team around him, and may have to import some technical skills from outside. The one thing he must not do is allow the organisation to develop a reputation for providing tenders to political pals. If he does so, his own credibility and the credibility of the organisation will disintegrate, and Transnet’s hard- fought ability to raise finance off its own balance sheet will evaporate.
The job requires some delicate political footwork, but it also cries out for some creativity and sense of expansiveness. Though it is state- owned, Transnet is actually in competition with other forms of transportation. Many customers who use the rail network do so only because they have no other option.
Mr Molefe needs to find some new customers, and focus on helping rather than hindering Transnet’s existing clients.