South African transport utility Transnet has continued the process of appointing new senior executives with the news that Siza Mzimela has become the new CEO of Transnet Freight Rail (TFR).
The pace of appointments has picked up since Portia Derby became the new group CEO in March. Several Transnet appointees have come from outside the port and rail sector, as the company focuses on those with senior management experience rather than a background specifically in managing cargo operations.
Until March, Mzimela was acting CEO of state owned airline SA Express, which was in severe financial difficulties before the coronavirus epidemic hit the entire airline industry hard.
It suspended all operations on 18 March, with most staff placed on compulsory leave. She had previously served as CEO of national flag carrier South Africa Airways. The opposition Democratic Alliance (DA) party has challenged her appointment, describing it as “bizarre” and arguing that she does not have sufficient experience in the freight industry. However, she was also previously non-executive director and chairperson of logistics firm Cargo Carriers.
TFR has three main operations: transporting coal to Richards Bay Coal Terminal (RBCT); iron ore to the Atlantic port of Saldanha; and manganese, which is currently mainly shipped out of Port Elizabeth and Saldanha, but which will eventually be exported from the relatively new port of Ngqura via a rail corridor that is still under development. The company accounts for about 58% of Transnet’s total revenue and employs about 33,000 people.
Mzimela’s biggest challenges in the near future will be coping with falling volumes and demand for all three commodities because of the ongoing epidemic. TFR is likely to come under pressure not to charge its take-or-pay customers but needs the revenue to finance its capital investment plans. In the longer term, she will be tasked with overseeing the development of rail capacity from the Waterberg Coal Basin in the far north of the country to RBCT and connecting the line to Botswana.