'We have not been transparent' – Transnet CEO addresses latest controversies

Clement Manyathela interviews Andile Sangqu, CEO of Transnet.

Listen below

Transnet has found itself in headlines more frequently over the past few years – if it isn't their R500 billion mess, it's their aged equipment creating backlog with 70k goods containers stuck or the privatisation of their ports.

The reality of the situation is that the state-owned enterprise is at the forefront of the logistics crisis.

According to the South African Association of Freight Forwarders, their inefficiencies have cost the economy more than R100 million a day.

President Cyril Ramaphosa has said that efforts are on the way to fix the rail and ports to enable the economy to grow faster again, but considering how long the country has been faced with these issues, is this an empty promise?

"We have not been open and transparent in communicating our problems and our challenges"

Sangqu is just five months into his role at Transnet.

While he says that he was eager to tackle the challenges head-on, he adds that the extent of the crisis is much bigger than he anticipated.

This is largely due to the enterprise not being "transparent, open and honest" in communicating their problems and challenges.

Amongst a plethora of things that need to be fixed, one of their main concerns is improving this to elevate awareness.

"We have not been open and transparent in communicating our problems and our challenges."

Andile Sangqu, CEO – Transnet

"Indeed, the lost revenue is very substantial"

Earlier this year it was reported that the country lost out on R50 billion in potential revenue due to the utility's inability to meet demand.

Sangqu confirms that there's been a substantial loss, but can't give the exact figure.

"We have seen that our turnover has been declining for the last five to seven years"

After looking at their income statement and the turnover of Transnet, things aren't looking good.

In fact, their turnover has been declining for the past five years.

Sangqu attributes this to:

• Their inefficiency in terms of lacking a "high performance culture"

• Cable theft and security issues

• Equipment that has passed their economic life

In terms of their balance sheets, Transnet is paying R13 billion per annum on debt service costs.

"The whole issue of not upgrading our equipment – it's one of the reasons why we're here."

Andile Sangqu, CEO – Transnet

"We've got unsustainable debt."

Andile Sangqu, CEO – Transnet

"We should not think that everything is going to be solved in the short term"

In Durban, an urgent intervention team has put plans in place to address slow turnaround times affecting the docks and unloading of containers at the port.

Dealing with this will require a two-pronged approach:

• What immediate issues need to be addressed to solve the problem short-term

• What needs to be done to ensure that Transet never finds themselves in this situation again

The latter, according to Sangqu means the acknowledgement that all ports do not have to be run by Transnet, but instead could be privatised.

"We have a problem at the moment and that problem must be solved."

Andile Sangqu, CEO – Transnet

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