Eskom and Transnet Face Leadership Crisis Amid Executive Departures: Ministers Accused of Interference

Eskom and Transnet, prominent state-owned enterprises (SOEs) pivotal to South Africa's economy, are witnessing a serious leadership crisis with a mass departure of executives in recent weeks. This crisis within the organizations exacerbates their existing inefficacies, impacting the economy and public finances.

Allegedly, Public Enterprises Minister Pravin Gordhan's meddling has caused this executive exodus. Former board members of the beleaguered utilities blame government interference for the severe instability, claiming that ministerial meddling has worsened under the Zuma administration.

CFO of Transnet, Nonkululeko Dlamini, recently exited the company, adding to the leadership instability. Further into the turmoil, Portia Derby, CEO, and Siza Mzimela, chief rail officer, are also preparing to exit resulting in their significant operations to be left without a helm.

A series of leadership changes has also hit Eskom. The SOE is operating without a group CEO since the resignation of André de Ruyter in February. The sudden resignation of the chairman, Mpho Makwana, has caused an additional crisis, with Mteto Nyati quickly stepping in as Eskom’s seventh board chair since 2011.

These departures come at a time when South Africa's economy is reeling under losses caused by the inefficiencies of Eskom and Transnet. Eskom's electricity outages alone cost the economy an estimated R899-million a day. In addition, Stellenbosch University estimates that due to the constant rail disruptions at Transnet, the country suffers a loss of about R1-billion a day.

Analysts argue that revamping these key SOEs is an immediate priority for the rapidly deteriorating South African economy.