Business Unity South African (Busa) has added its voice to the multitude of positive responses to the appointment of Michelle Phillips as the permanent CEO of Transnet.
“Business has been partnering with government since June 2023 to address the challenges facing our transport and logistics sector, and the resultant effect on economic and job growth,” said Mxolisi Mgojo, Busa president and CEO sponsor of Business for South Africa’s (B4SA’s) Transport and Logistics Focal Area.
“One of the critical matters we have raised has been the imperative to appoint a new CEO at Transnet. The appointment of a permanent executive team at Transnet will enhance stability in the relationships between Transnet and the business sector, which will lead to an acceleration of progress in implementing the Transnet Recovery Plan (TRP)” he added.
Mxolisi believes the past months have seen a much-needed improvement in the relationship between the country’s transport and logistics authorities and those businesses whose existence is dependent on efficient and effective logistics.
“But this progress, while valuable and necessary, is only the first step in addressing the crisis. Stability is essential to sustain the good work being done.
“The state of the country’s rail networks and ports is costing the economy an estimated R1 billion per day. Approximately R50bn was lost in the minerals sector alone in 2023. The International Monetary Fund has almost halved its growth outlook for SA in 2024, largely due to Transnet's struggles to effectively administer our ports and freight rail. The total cost to the South African economy in 2023 resulting from Transnet’s inefficiencies was approximately R450bn, equivalent to 6% of GDP. This results in reduced tax revenue, increased sovereign credit risk, and higher transport costs for commuters (as much as 40% of monthly income for the poorest South Africans).
“We expect that with skilled and experienced executives now permanently appointed in key positions within Transnet, there will be a strong foundation on which to further drive implementation of the company’s recovery plan. We believe that we have a better chance today than we have had in many years to resolve the challenges facing the transport and logistics sector. There are concrete indications that government, Transnet, business, and labour are jointly committed to resolving the logistics crisis and enabling the sector to contribute to economic growth and job creation in South Africa,” said Cas Coovadia, Busa CEO.
“We have, through the partnership with the government, worked well with Michelle Phillips in the period she played the role of acting CEO at Transnet. We look forward to ramping up our interaction and making real and sustained progress on the critical issues we are working on now that she has been appointed the CEO.
