http://www.businessday.co.za/articles/C ... ?id=134545
State banks on Molefe to kick-start Transnet
Former PIC chief is group’s first permanent CEO in over a year
LINDA ENSOR
Published: 2011/02/17 06:36:33 AM
CAPE TOWN — Former Public Investment Corporation (PIC) head Brian Molefe was yesterday appointed group CEO of state- owned Transnet, ending a long period of uncertainty at the transport company and underlining the government’s intent to take a more hands-on approach to state- owned enterprises.
His appointment follows Public Enterprises Minister Malusi Gigaba ’s promise last year that the state would involve itself more directly in such entities. Mr Gigaba pledged then to meet the CEO and chairman of each parastatal every month.
Mr Gigaba’s first major decision as minister was the appointment in December of a new board for Transnet, headed by former CEO Mafika Mkhwanazi. The group had been without a permanent board for more than a year. Mr Gigaba gave the new board three months to find a new CEO — to replace Chris Wells, who had been acting in the post for almost two years.
He also made it clear that other vacancies would have to be filled shortly thereafter.
Transnet is embarking on an enormous infrastructure investment programme and faces huge challenges in overcoming operational inefficiency.
The parastatal’s board of directors submitted a short list of three candidates for CEO to the Cabinet for selection after it considered 63 candidates.
Mr Gigaba told reporters at Parliament yesterday that Mr Molefe would assume the position with immediate effect, and had been given a five-year contract.
While questions have been raised in the past about Mr Molefe’s political affiliations and about his closeness to former president Thabo Mbeki , this proved not to have been an obstacle to his appointment.
Mr Molefe, who managed more than R910bn in assets while at the helm of the PIC between 2003 and 2010, has considerable knowledge of capital markets. This would be vital in his new position, as Transnet has to raise funds for its five-year, R93,4bn capital investment programme to modernise its rail, port and pipelines infrastructure.
Time will tell whether Mr Molefe will help shift freight traffic from road to rail in line with the government’s transport strategy.
Mr Molefe said yesterday that another key challenge he faced would be to help Transnet contribute to meeting SA’s job creation needs. He said he was "moved" by the confidence placed in him and would "do his best" not to disappoint.
Mr Molefe’s appointment ended a long period of uncertainty at the helm of the giant freight parastatal and would restore the confidence of suppliers and customers, Mr Gigaba said .
"Mr Molefe’s appointment strengthens the stability of the leadership of Transnet, and allows the company’s primary focus to return to that of running a sustainable business," he said.
"Mr Molefe brings a wealth of expertise, and his understanding of capital markets and asset management will be invaluable as the company moves forward with its massive infrastructure investment programme." Mr Gigaba said Mr Molefe’s appointment would boost the standing of Transnet in the capital markets .
It would also free Mr Mkhwanazi from the executive responsibilities he took on in December, and allow him to concentrate on providing strategic leadership for the organisation as nonexecutive chairman. Mr Wells will resign in March — or earlier if this suits the parastatal.
The leadership vacuum at the parastatal was caused by the departure of former CEO Maria Ramos, who joined Absa . It led to intense boardroom battles as contestants fought to take her place.
Mr Gigaba praised Mr Wells’s leadership, which he said had ensured that Transnet’s balance sheet remained sound; and that it fulfilled its commitments to developing infrastructure.
He said Mr Wells did not waver at taking tough decisions.