Transnet’s Group CEO, Michelle Phillips, is optimistic that the struggling state freight company can bounce back from its R7 billion loss last year and achieve a billion rand profit in the current financial year.
However, Phillips acknowledged that achieving this turnaround would require additional borrowing.
On Tuesday, Transnet faced tough questioning from the Standing Committee on Public Accounts (SCOPA) about why its finances had deteriorated so drastically, shifting from being one of the state’s better-performing state-owned enterprises to its current troubled state.
Into her sixth month as Transnet’s permanent CEO, Phillips highlighted that several measures had already been implemented to boost the company’s profitability, including plans to sell non-core properties and adopt more prudent spending practices.
Phillips expressed confidence that if Transnet meets its 250 million tonne freight target, it could achieve its billion rand profit goal in 2024.
“It is an ambitious target, but some people have said maybe we are not ambitious enough, so we continue to push to see where we will end up,” Phillips stated.
However, former Transnet CEO and current MK MP, Brian Molefe, was skeptical of Phillips’ explanation that asset purchases and loans during the state capture years were to blame for the company’s decline.
“What happened after 2017/18 that Transnet is now making such extraordinary losses from a very profitable situation during the so-called state capture years?” Molefe questioned.
Amid various challenges, Phillips also pointed out that theft and vandalism were severely disrupting the functionality of the rail network.
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