Michelle Phillips
GROUP CEO: Transnet
‘It is an ambitious target, but some people said maybe we’re not ambitious enough, so we continue to push to see where we will end up’
IN March 2024, Michelle Phillips became Transnet’s eighth CEO in 23 years. She took over an embattled institution, which continues to shoulder the blame for poor economic performance due to its malfunctioning rail system and inefficient ports. Under Phillips’s leadership, Transnet began implementing an 18-month recovery plan, including the Freight Logistics Roadmap that separates the rail operating company and infrastructure management to enable private or third-party access to freight rail. The recovery plan also includes steps to improve operational and financial performance. Transnet’s rail performance has progressed in the past year, albeit at a slow pace.
Phillips set ambitious objectives for the end of the 2025 financial year: a 170-million-ton target for rail volumes, and she aims to turn the loss-making enterprise back into the black. This may prove difficult, considering Transnet needs billions of rand to upgrade infrastructure but at least the precipitous decline in export coal volumes has been arrested. An estimated 50.2Mt are expected to be railed for the 2024 calendar year.
S&P Global placed Transnet on CreditWatch, citing concerns over high debt service costs and an insufficient cash flow to improve its operational underperformance. This means Transnet faces a strong possibility of a credit ratings downgrade if the turnaround in operational and financial performance does not materialise soon. Transnet posted an interim R2.2bn loss for the six months ended September, R600m worse than in the previous financial year.
On a positive note, government approved a blueprint at the end of 2024, paving the way for opening access to the rail network to private operators to involve corporate expertise in fixing the ailing state-owned enterprise.
LIFE OF MICHELLE
Phillips holds a Bachelor of Jurisprudence and an LLB from Nelson Mandela University. A trained advocate, she started her career as a forensics investigator at the Special Investigating Unit – the government’s litigation agency. She joined Transnet in 2001 as a manager at the Transnet National Ports Authority and served in various managerial positions at Transnet Port Terminals. In 2020, she was appointed CEO of Transnet Pipelines – a position she held until she was appointed interim group CEO in October 2023.
