We have detected that the browser you are using is no longer supported. As a result, some content may not display correctly.
We suggest that you upgrade to the latest version of any of the following browsers:
close notification
Date
: 27/08/2004
Source: Department of Public Enterprises
Title: A Erwin: Transnet Group financial results
STATEMENT BY ALEC ERWIN MP, MINISTER OF PUBLIC ENTERPRISES ON
TRANSNET GROUP FINANCIAL RESULTS, 27 August 2004
The financial results of the Transnet Group announced today are a
realistic statement of the current financial position. In a sense
they represent many past problems coming home to roost. Quite
clearly this represents a major challenge as the CEO has fully set
out. However, it is the intention of Government to address this
challenge and to decisively turn around the fortunes of the Group
and indeed its impact on the economy. This cannot be done
immediately and will take us a few years. However, we are seeking
to achieve very real improvements in the short term. Our intentions
are indicated in the Annual Report.
As has been indicated in the State of the Nation Address we will be
presenting a more comprehensive financing strategy to the Cabinet
by the end of September. However, let me make some general
remarks.
An efficient transport and logistic system is particularly
important for the South African economy, as it is far from the
worlds largest markets and the economy's largest manufacturing
centre is based almost six hundred kilometres from the nearest
sea-ports. In a global context where competition is increasingly
between the efficiency of supply chains, it is imperative that the
national transport and logistics system provides the economy with
an efficient, inexpensive and reliable service. If we can develop
such a system in our economy then we would enjoy an advantage by
being well placed in relation to all the worlds major economies at
present.
However this will require investment within and modernisation of
our transportation system. Transnets ability to invest on a
sustained and sustainable basis has been marred from year to year,
by volatile income and expenditure movements. Accordingly every
effort has been made in the financial statements to present an
accurate statement of what is a problematic position. In doing this
we will now have to focus on building the revenue base from the
actual core business of Transnet, which is transportation and its
support for an efficient logistics system. As we do this we have to
ensure that we are a cost competitive transportation system. This
in turn requires a more coherent corporate structure and strategy.
The shape that his will take is indicated in the Annual
Report.
I am very pleased with the work and the degree of cooperation in
developing this new corporate strategy and vision and I am also
confident that we have the management to carry out the task.
However, it is now a case of getting down to work and anyone not up
to this will have to make way. It is a time for innovation and
energy. Again I am confident that we have this abundance within the
people power we have in Transnet. My Department and I will give the
fullest possible support to the Board, the CEO and her management
in achieving our objectives. We will also support them in removing
any obstacles to the achievement of those objectives.
As the Shareholder Minister I have decided to make changes to the
Board of Transnet. I have asked a respected and experienced
business leader, Mr Fred Phaswana, to chair the Board. We are
appointing a Board of thirteen people at this stage, two of which
are executive directors. I am making a list of the members
available to you. However, having listed them I believe that we
have the correct combination of experience and skill sets to take
Transnet into the next period. We may make one or two further
appointments in the near future.
This new Board will have my full support and I have every
confidence in them as they embark on rebuilding our balance sheet
and completing the turnaround of Transnet.
It is not an easy task chairing an enterprise as large as Transnet
and it is particularly difficult during the tumultuous times of
South Africa's economic transformation. Accordingly I would like to
express my gratitude to Dr Khumalo and the previous Board for the
public service they have provided and the many hours of hard work
they have put into the task. I wish them all the very best and
again express my gratitude.
As the Group accounts show we remain in a very difficult position
in SAA. As in the case of Transnet the government is very confident
that SAA has massive potential to succeed. But we have to sweep
clean within its present financial position. The airline business
is a very competitive one and by no means easy. But for many
reasons South Africa is in an advantageous position in relation to
its airline. We have to bring these advantages to book. One thing
we could not afford was any delay in moving in this
direction.
Accordingly the State as the ultimate Shareholder of SAA through
Transnet has decided to exercise it prerogative to act with speed.
I am appointing Prof Jakes Gerwel as the Chair of the SAA Board
with immediate effect. His experience will provide a wise and
steady hand as we stabilise the position and chart effective
strategies for both our domestic and international business. I also
take pleasure in announcing the Chief Executive Officer designate,
Mr Khaya Ngqula. Mr Ngqula will commence his duties on the 15th
October. Minister Mphahlwa and I have consulted on the management
of the smooth transition of leadership within the Industrial
Development Corporation.
I have appointed additional persons to the SAA Board as set out.
Again as I announce these I am satisfied that this is a good
combination of experience and skill in a Board that will face many
challenges. The term of office of both Boards is three years
subject to certain review conditions. As is the case for Transnet
the Board oversight of SAA is not an easy sinecure. Accordingly, I
would like to thank Ms Tshidi Mogkabudi for standing in as the
acting Chair and for the work she has done on the Board. I wish her
well in all she does.
We are starting at the bottom from the point of view of the
respective balance sheets of Transnet and SAA. However, these are
enterprises that will both benefit from and drive the prosperity of
the South African economy. They are as safe a bet as we are in
South Africa. I wish the Boards of both enterprises everything of
the best as we start this difficult but exceptionally exciting
journey to success.
For any queries contact: Gaynor Kast
Ministerial Spokesperson
Tel: (012) 431 111
Cell: 083 747 6328
Issued by: Department of Public Enterprises
27 August 2004
Map
