BRIEFING BY THE MINISTER OF PUBLIC ENTERPRISES, BARBARA HOGAN, TO THE PORTFOLIO COMMITTEE ON PUBLIC ENTERPRISES, September 15 2009
Chairperson and Honorable Members,
We welcome this opportunity to explain the processes related to the selection and appointment of a suitable CEO at Transnet.
First, let me say at the outset that whilst the delay in appointing a suitable CEO for Transnet is not ideal, neither is it as problematic as it would seem. The point of the matter is that not only is Transnet the best performing SOE in our stable from a financial point of view, but its strategic plan and future growth path for the next few years is very much in place, having received extensive Board and management attention in the preceding year.
The competent and very experienced team of senior and middle managers at Transnet are quite capable of steering the company through the carefully formulated growth plans going forward. Having said that, I am also mindful of the enormous challenges facing Transnet and I would agree that the process of appointment cannot be prolonged for too much longer. I call upon all concerned to ensure that there is a rapid and satisfactory conclusion to the events that have thus far unfolded and which have hindered the appointment of a CEO.
In terms of the Articles of Association of Transnet, the Executive Authority (i.e the Minister) is responsible for the appointment of the CEO. This prerogative is fairly unusual; normally the Board appoints the CEO for understandable reasons as it is obviously desirable that a CEO must enjoy the confidence of a Board. The process followed by the previous Minister was to request the Board to undertake a selection process and then to make a recommendation to her. Thereafter the Minister would apply her mind to their recommendations.
A candidate [Pravin Gordhan] was thus identified by the Board and recommended to the former Minister before the departure of the former CEO in February 2009. However, the said candidate withdrew his candidacy before the former Minister was able to make a formal recommendation to Cabinet just prior to the elections. After the elections, the Board embarked on a new round of applications and submitted another set of recommendations to the new Minister.
During the course of these events, disciplinary proceedings were initiated by the Board against a person [Siyabonga Gama] who was invited by the Board to a final round of interviews. In turn the same person has alleged that these proceedings were deliberately instituted to thwart his candidacy for the position of CEO. The resultant furore that has subsequently erupted has led to the withdrawl of the latest preferred candidate [Sipho Maseko] from the process. The dispute referred to is presently subject to adjudication and before the Courts.
Regrettably, the names of several individuals who applied for the position and the names of the preferred candidates have now become public knowledge and the confidentiality of these candidates has been breached. Those candidates that were not successful face a similar risk. This is a regrettable situation.
It is imperative that matters at Transnet reach a swift resolution in the interests of all concerned and most importantly in the interests of Transnet. I therefore call upon everyone to put the interests of Transnet first and arrive at a speedy resolution.
In the meantime, it remains important to ensure that Transnet is steered towards delivery, and in the event that the outcome of this matter is protracted, I will exercise my prerogative to appoint a CEO at Transnet, in consultation with Cabinet.
In so doing, I will be mindful of the transformational imperatives of our times, the particular skills and experiences required for the job and the leadership capabilities of the candidate.
I thank you for your attention.
Issued by the Department of Public Enterprises, September 15 2009
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