Triple leadership boost for SA parastatals signals reform push

Dan Marokane assumes his position as Eskom Group CEO today. Picture: Jennifer Bruce

Dan Marokane assumes his position as Eskom Group CEO today. Picture: Jennifer Bruce

Published Mar 1, 2024


It’s a triple slam for South Africa on the state-owned enterprise front after three key permanent group CEOs positions were filled this week to lead implementation of structural reforms, which was welcomed by business.

This comes after Cabinet yesterday appointed former Afrox and Sasol manager, Xolile Sizani, as the new CEO of the state-owned oil company PetroSA, nearly a year-and-a-half after parting ways with Pragasen Naidoo.

On Wednesday, Minister of Public Enterprises Pravin Gordhan appointed Michelle Phillips as Transnet’s Group CEO and Nosipho Maphumulo as the Group chief financial officer, following the resignation of Portia Derby and Nonkululeko Dlamini, respectively, in October.

In December, Gordhan also appointed former CEO of the state-owned forestry company Safcol, Tsepo Monaheng, as the new Group CEO of the Denel Group.

All this comes as Dan Marokane assumes his position as Eskom Group CEO today after he was appointed by Gordhan in December following the resignation of Andre de Ruyter a year before.

Business has been working closely with the government on the transport logistics workstream within the National Logistics Crisis Committee to find solutions to the challenges, including allowing private sector participation in the rail sector.

Business Unity SA president Mxolisi Mgojo yesterday said Phillips’ appointment would enhance stability in the relationships between Transnet and the business sector, which would lead to an acceleration of progress in implementing the Transnet Recovery Plan (TRP).

“We have, over the past months, 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,” Mgojo said.

“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.

Mining accounts for about 80% of Transnet Freight Rail’s annual revenue, and approximately R50bn was lost in the minerals sector alone in 2023.

The mining industry’s exports have been crippled by Transnet rail inefficiencies as volumes transported by rail have declined by a third in the past six years.

The industry yesterday said it looked forward to continuing constructive engagements to stabilise the rail network and returning it to nameplate capacity.

Minerals Council spokesperson Allan Seccombe said they worked well with Phillips in her acting CEO role, and were expecting to build on the good relationships they had established to continue collaborating to urgently address the challenges at the railways and ports.

“The Minerals Council notes Ms Phillips’s commitment to implementing the Transnet Recovery Plan, which includes sustainable cooperation with the private sector to improve operational efficiencies,” Seccombe said.

“Mining companies have increasingly resorted to road transport to export their products, which is far more expensive and inefficient than using trains. Trucking is deleterious for the environment, communities, roads and safety. Returning bulk commodities to rail is a priority for the mining industry.”

Meanwhile, Marokane assumes leadership of Eskom at the time the power utility is still struggling with heightened levels of load shedding and unstable financial position as it expects to report another R20bn loss for the 2023/24 financial year.

However, Old Mutual Wealth investment strategist Izak Odendaal said the appointment of permanent leadership at Eskom and Transnet was the first step in ensuring that they regained their good operational performance.

“These are two vital entities for South Africa’s economy and both face serious financial and operational challenges,” Odendaal said.

“It is, therefore, very important that they now have permanent, instead of acting CEOs.