Transnet acting CEO Tau Morwe is prioritising the restoration of trust, internally and externally, which he acknowledges has been affected by the “turbulence” associated with recent actions taken by the board to tackle corruption and recover money “siphoned” from the State-owned company.
However, he has also hinted to a possible shift in Transnet’s strategy, which he believes does not pay sufficient attention for the development of rail and port infrastructure and is, instead, designed primarily at “defending turf”.
Morwe will also participate in a review of the controversial R50-billion-plus ‘10-64’ locomotive procurement contracts, which are at the heart of State capture and corruption allegations. However, he stresses that any decisions regarding the four contracts cannot imperil Transnet Freight Rail’s (TFR’s) ability to deliver a service.
In an interview with Engineering News Online a day into his six-month contract, signed off by Public Enterprises Minister Pravin Gordhan, Morwe said his immediate objective was to reassure employees and customers.
To staff, he is communicating that the current leadership turbulence will not threaten jobs, while his message to customers is that the group’s operational performance will not be destabilised as a result of the actions being taken against senior executives and managers.
Besides the high-profile axing of Siyabonga Gama from the position of CEO, the board had also suspended Transnet Engineering CEO Thamsanqa Jiyane, executive manager Lindiwe Mdletshe, group supply-chain officer Edward Thomas and group treasurer Phetolo Ramosebudi.
Gama, who is contesting his dismissal, was fired on October 21 after he failed to meet the board’s deadline for the submission of reasons as to why his contract should not be terminated. Ramosebudi has resigned, but Transnet has reserved its rights to exercise action against him.
Prior to the May 24 appointment of the new board, which is headed by Popo Molefe, Transnet accepted the resignation of Garry Pita as group CFO.
Morwe said there were no immediate signs that the board’s actions against senior executives had affected Transnet operations or finances. The group’s results for the six-month period to the end of September were currently being audited and would be released soon.
Nevertheless, a “trust deficit” had arisen as a result of a perceived leadership void, which Morwe would actively set about addressing. At the time of the interview, he had already met with the board and senior executives and had several meetings scheduled with the broader Transnet leadership team and key customers. He indicated that he also intended meeting with trade union leaders and with Eskom.
In parallel, Morwe was preparing for a strategy review, which had been scheduled for November 26. The meeting will assess the role that Transnet is currently playing against what role it “ought to be playing in the economy”.
He told Engineering News Online that his perspective on Transnet’s role had evolved materially since his departure from the organisaiton, where he headed three divisions, including the Transnet National Ports Authority, TFR and Transnet Port Terminals. In fact, Morwe worked for the group for 17 years before taking early retirement in April 2015.
His perspective had also been informed by the consulting work he had done in the rest of Africa, including the work he performed in collaboration with Alec Erwin’s Ubu Investment Holdings on the Togo Transport Corridor.
“From the outside it became obvious that Transnet’s strategy has been too defensive,” Morwe said. “What also became obvious is that we strayed away from building infrastructure,” he added, highlighting the large position occupied by the procurement of equipment in the group’s capital investment programmes.
“If you look at the state of the rail network, the infrastructure, we’ve got serious challenges. And you only really see that once you step outside and when you start working with other governments.”