Provide recommendations on the future challenges for Transnet Transnet board chair Popo Molefe said past spending on major procurement meant that there was noadequate rehabilitation of the infrastructure network that new locomotives were meant to operateon. There had also been decades of neglect of the system, said Molefe. "The impact of state captureon Transnet has been devastating. That will be apparent in our annual financials and the irregularitiesthere. It also becomes apparent in our operational performance because that is linked to the mannerin which we contracted when we procured locomotive and equipment," Molefe said.He said the controversial procurement of 1 064 locomotives under former CEO Brian Molefe leftTransnet in a tough spot as the related rolling expenditure in subsequent years was deemed improper.Additionally, they could not be accommodated by the current rail network. "We met with NationalTreasury to deal with these things because all of these challenges mean that we cannot move trainswhen they need to be moved. The other issue is criminal activities that our infrastructure is exposedto. For us to operate properly, we need to summon all energy and collective wisdom to meet thesechallenges," said Molefe. Transnet and the Special Investigating Unit filed court papers in March tohave said locomotive contract with China South Rail set aside.Transnet 'very much exposed'Public Enterprises director general Kgathatso Tlhakudi said Transnet was a victim of the country andregion's çurrent economic cycle." It was a difficult year, as you will see. Transnet is very much exposedto the economic cycle, the pandemic and some of the challenges we have had relating to the safetyof our infrastructure. This had a direct impact on the performance of the business," said TIhakudi. Hesaid the role of historical maleficence could not be discounted or overstated in the challenges thatTransnet faced. "The burden of the past must not continue to drag down the performance in thepresence. But we are confident that a good baseline has been set for an improved performance forthe group going forward," Tlhakudi said.Job cutsCommittee chair Khaya Magaxa said the committee would also like for the Transnet delegation to takethe committee into its confidence regarding the entity's plans for retrenchments and the cyberattacksit suffered earlier this year. "We would like to get an update on what happened and to what extentthat has been dealt with. There will also be a retrenchment of 10% of employees at Transnet. We hopeyou put us in the same wavelength in terms of the contributing factors behind that," said Magaxa.Speaking to maleficence in previous undermining Transnet's current financial position, Auditor-General Tsakani Maluleke said in her audit report of national and provincial departments and entitiesthat R16.9 billion or 55% of Transnet's irregular expenditure was incurred in previous years but wasidentified and disclosed in the current year. "Approximately R37 billion of the Transnet amount relatesto the procurement of 1 064 locomotives that was found to be irregular. "These transactions are thesubject of ongoing investigations and court processes, the outcome of which will determine theappropriate steps to be implemented for dealing with the irregular expenditure, including recovery oflosses incurred, if any, disciplinary steps or condonation if there are good grounds to do so," saidMaluleke.Source: https://www.news24.com/fin24/companies/transnet-position-may-only-start-to-improve-in-late-2022-parliament-hears-20211208 * TRANSNETTransnet group CEO Portia Derby told Parliament's Portfolio Committee on Public Enterprises thatwith the subdued national and regional economic outlook and structural challenges at Transnet, thestate-owned entity only expected to chart its way back to profitability by late 2022. Derby led aTransnet delegation in updating the committee in the first parliamentary briefing the entity has giventhe legislature since the release of its annual report and financial statements in October, where itemerged Transnet had suffered a R8.4 billion net loss for the year ended in March 2021.This is the first loss that Transnet has posted in years, and while the rail and logistics giant remains theonly SOE which funds its own operation capital, even Transnet management is concerned that statecapture, its previous management, vandalism, and Covid-19 will undermine its recovery. Derby toldthe committee that improvements in performance and efficiency would be critical in the coming yearsand that Transnet was still a long way from permanently improving its financial position. This wasfurther complicated by vandalism and cable theft, she said.Still in trouble"It was a tough year. There is no doubt about that, given the impact of the pandemic. Despite this, wehave prevailed to some extent. We are still a company in trouble. There is a lot that we need to do toget Transnet back on a stable footing and profitable once again," said Derby. She said internal andexternal matters, including the ongoing Covid-19 pandemic and its impact on overall national andregional economic activity, were expected to continue weighing on the entity for the foreseeablefuture. "The latter half of 2022, maybe 2023, is when we will start to see some improvement. Withthe rate at which vaccination is taking place in South Africa and on the continent, and continuingspread of omicron, the pandemic is set to continue to constrain economic activity and performance,"Derby said. Derby further said the board was giving its attention to safety, following vandalism,cyberattacks and a recent attack on truck drivers in Mooi River.'Devastating' impact of state capture

Question

Provide recommendations on the future challenges for Transnet Transnet board chair Popo Molefe said past spending on major procurement meant that there was noadequate rehabilitation of the infrastructure network that new locomotives were meant to operateon. There had also been decades of neglect of the system, said Molefe. &#34;The impact of state captureon Transnet has been devastating. That will be apparent in our annual financials and the irregularitiesthere. It also becomes apparent in our operational performance because that is linked to the mannerin which we contracted when we procured locomotive and equipment,&#34; Molefe said.He said the controversial procurement of 1 064 locomotives under former CEO Brian Molefe leftTransnet in a tough spot as the related rolling expenditure in subsequent years was deemed improper.Additionally, they could not be accommodated by the current rail network. &#34;We met with NationalTreasury to deal with these things because all of these challenges mean that we cannot move trainswhen they need to be moved. The other issue is criminal activities that our infrastructure is exposedto. For us to operate properly, we need to summon all energy and collective wisdom to meet thesechallenges,&#34; said Molefe. Transnet and the Special Investigating Unit filed court papers in March tohave said locomotive contract with China South Rail set aside.Transnet 'very much exposed'Public Enterprises director general Kgathatso Tlhakudi said Transnet was a victim of the country andregion's çurrent economic cycle.&#34; It was a difficult year, as you will see. Transnet is very much exposedto the economic cycle, the pandemic and some of the challenges we have had relating to the safetyof our infrastructure. This had a direct impact on the performance of the business,&#34; said TIhakudi. Hesaid the role of historical maleficence could not be discounted or overstated in the challenges thatTransnet faced. &#34;The burden of the past must not continue to drag down the performance in thepresence. But we are confident that a good baseline has been set for an improved performance forthe group going forward,&#34; Tlhakudi said.Job cutsCommittee chair Khaya Magaxa said the committee would also like for the Transnet delegation to takethe committee into its confidence regarding the entity's plans for retrenchments and the cyberattacksit suffered earlier this year. &#34;We would like to get an update on what happened and to what extentthat has been dealt with. There will also be a retrenchment of 10% of employees at Transnet. We hopeyou put us in the same wavelength in terms of the contributing factors behind that,&#34; said Magaxa.Speaking to maleficence in previous undermining Transnet's current financial position, Auditor-General Tsakani Maluleke said in her audit report of national and provincial departments and entitiesthat R16.9 billion or 55% of Transnet's irregular expenditure was incurred in previous years but wasidentified and disclosed in the current year. &#34;Approximately R37 billion of the Transnet amount relatesto the procurement of 1 064 locomotives that was found to be irregular. &#34;These transactions are thesubject of ongoing investigations and court processes, the outcome of which will determine theappropriate steps to be implemented for dealing with the irregular expenditure, including recovery oflosses incurred, if any, disciplinary steps or condonation if there are good grounds to do so,&#34; saidMaluleke.Source: https://www.news24.com/fin24/companies/transnet-position-may-only-start-to-improve-in-late-2022-parliament-hears-20211208 * TRANSNETTransnet group CEO Portia Derby told Parliament's Portfolio Committee on Public Enterprises thatwith the subdued national and regional economic outlook and structural challenges at Transnet, thestate-owned entity only expected to chart its way back to profitability by late 2022. Derby led aTransnet delegation in updating the committee in the first parliamentary briefing the entity has giventhe legislature since the release of its annual report and financial statements in October, where itemerged Transnet had suffered a R8.4 billion net loss for the year ended in March 2021.This is the first loss that Transnet has posted in years, and while the rail and logistics giant remains theonly SOE which funds its own operation capital, even Transnet management is concerned that statecapture, its previous management, vandalism, and Covid-19 will undermine its recovery. Derby toldthe committee that improvements in performance and efficiency would be critical in the coming yearsand that Transnet was still a long way from permanently improving its financial position. This wasfurther complicated by vandalism and cable theft, she said.Still in trouble&#34;It was a tough year. There is no doubt about that, given the impact of the pandemic. Despite this, wehave prevailed to some extent. We are still a company in trouble. There is a lot that we need to do toget Transnet back on a stable footing and profitable once again,&#34; said Derby. She said internal andexternal matters, including the ongoing Covid-19 pandemic and its impact on overall national andregional economic activity, were expected to continue weighing on the entity for the foreseeablefuture. &#34;The latter half of 2022, maybe 2023, is when we will start to see some improvement. Withthe rate at which vaccination is taking place in South Africa and on the continent, and continuingspread of omicron, the pandemic is set to continue to constrain economic activity and performance,&#34;Derby said. Derby further said the board was giving its attention to safety, following vandalism,cyberattacks and a recent attack on truck drivers in Mooi River.'Devastating' impact of state capture

Accepted Answer

According to the given case study, the company has faced losses. The company management is worried…