Transnet may sink Hogan

2009-09-12 12:38

THE controversy over who is to ­become chief executive of Transnet is proving to be damaging to the ­parastatal and the individual who may get to occupy the hot seat.

It has also become a political hot potato that could scorch Public Enterprises Minister Barbara Hogan.

“Barbara must go. She is still ­going to give us problems going ­forward. She appointed the white acting chairman and the CEO, so she must deal with them. We want Siyabonga Gama there,” an ANC ­national working committee member said this week.

Gama is the chief executive of Transnet Freight Rail (TFR) and is currently being investigated by Transnet for alleged breaches of corporate ­governance.

“If she was a real ANC cadre she would have known that once the leadership had resolved that Gama was the preferred candidate she must implement,” the member said.

Hogan did not comment despite numerous requests for her view. She is facing pressure from Luthuli House and Parliament.

The member did not explain why the ANC had allowed the board to lead the process of appointing a chief executive for Transnet when it already had a preferred candidate.

Since the ANC assumed power Cabinet has always appointed the chief executives of parastatals, with little board involvement.

The articles of association, which govern the relationship between the government and Transnet, dictate that the government, through the public enterprises minister, appoints both the chief executive and the Transnet board.

The Transnet chief executive job became available after former boss Maria Ramos left in February to join banking group Absa.

The chief financial officer, Chris Wells, has since been acting chief ­executive. Anoj Singh is now acting chief financial officer.

The ANC knew that Ramos was leaving last November. At the time the public enterprises minister was Brigitte Mabandla. It is not clear why the ANC did not move then to make the appointment.

That indecision means that Transnet now needs to fill the positions of chief executive, chief financial ­officer and chairperson after Fred Phaswana left at the end of the board’s term last month. Hogan has since appointed Geoff Everingham as acting chairperson and reappointed the board for another term.

Vytjie Mentor, the chair of Parliament’s portfolio committee on ­public enterprises, said Hogan had been called to account for the ­Transnet saga.

“She is still coming to the committee. We are very, very worried. There are three executive positions that are affected by this. It must be resolved very speedily. I get a sense that people think they have time. We must free up the leadership of Transnet so that it can focus on what the company must do,” she said.

This week support for Gama increased. On Friday an ANC Youth League national executive committee member said they had discussed the matter and resolved “to fight for Gama’s appointment tooth and nail”.

Gama this week said he did not ­understand why charges had been brought against him because he had provided answers to both acting chief executive Wells and the board.

Transnet is investigating the circumstance under which Gama went beyond his authority in approving a R19-million security contract. Gama only has authority to approve fixed-term contracts of up to R10?million. Gama said the five-month contract he authorised was for R7.8 million.

“At the end of that period TFR had not concluded awarding of a new contract and the security manager extended the contract with existing suppliers on a month-on-month basis on the same terms. This is normal practice within the parastatal in such instances,” he said.

Gama said it was impossible for him to know all the details of each of nearly 3?000 contracts that TFR had with different suppliers.

Another allegation is that Gama defied a board decision to include Transnet Rail Engineering in a contract to build 50 new locomotives. The locomotives are being built by a service provider.

Gama said the contract allowed the service provider to produce 10 locomotives.

He has launched a High Court ­action to clear his name.

The week also saw Sipho Maseko, the Transnet board’s preferred candidate, withdraw from the race.

“It is important to point out that we understand fully the frustrations brought about by the delay in the selection process. However, we are doing all we can to ensure that the matter is speedily resolved,” reads a Transnet statement.

This means that the job is Gama’s should he win his court case.

It is unclear if any other candidate would want the job after all the furore, if Gama remains in the race.

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