After the Bell: I have a solution for Transnet’s Carlton problem — and you aren’t going to like it

One doesn’t like to be overly cynical. Well … allow me to rephrase. Comedian George Carlin once said that inside every cynical person is a disappointed idealist. So perhaps one doesn’t like to be overly cynical, but it is immensely satisfying!

To feed your cynicism, the easiest and most effective way is to read the financial statements of SA’s state-owned enterprises. My colleague Ray Mahlaka reported this week about the Transnet big picture, which is a complicated story.

Transnet’s losses this past financial year were enormous at R7.3-billion but once-off (we hope) because Transnet lost a 2011 court case for overcharging its customers Sasol and Total Energies. And while revenue was up by 11.6% to R56-billion, top-line earnings are still half what they were before Covid. This is an organisation in deep distress.

I thought it would be fun to look not so much at the big picture, but at the little one, and that is Transnet Property. Wait, I hear you say, Transnet has a property division? Indeed it does. And how is that going? Turns out, not so good. Revenue is down by 31% in a year. Wowzer.

The advantage of looking at the small picture rather than the big picture is that it does give you clues about the state of the organisation. If there is one thing we all know about Transnet it’s that years ago it bought the Carlton Centre, which was the tallest building in Africa for 46 years until 2019.

Transnet bought it in 2007 for the miserly sum of R33-million from Anglo American Properties just as the Joburg city centre started its long descent into Gotham. It cost about R66-million to build in the 1970s; god knows what that is in today’s money.

People I knew who worked in the Carlton found it pleasant enough, though it’s like a fortress on a battlefield. With limited entrances and CCTV all over the place, crime is low, people drive in and park in the huge parking garage, and drive out in the evenings.

It also has a great history — I remember as a child looking through the viewing stations when it was being built; people were enormously proud of the Carlton. And there was the dressing up to the nines to dine at what was for a long time Johannesburg’s best restaurant, The Three Ships. (I went once as a kid.)

So, back to cynicism. If there is one iron-clad law of corporate headquarters, it’s that ultimately they will move to a place closer to where the CEO lives. And so it was with the Carlton. Former Transnet CEO Maria Ramos announced in 2007 that the building would be sold and when Brian Molefe took over, he moved the head office staff out and into another fortress, the Waterfall estate in Midrand. It has moved a few times from there.

Anyway, if you read the results this year, the Carlton does get a mention, under the heading of “key indicators — not achieved”. There are a lot of them. Apparently, a target to sell the Carlton was set, and it has been, well, not achieved. The only other note is that “Transnet is considering the new strategy following a tender non-award”. What exactly is a “tender non-award”? I have no idea.

The basic issue here is that Transnet decided to sell the building in 2007 and then physically moved out. Seventeen years later, it still hasn’t been sold. Seventeen years. I mean, FFS. I’m guessing the sale price is not going to be what the estate agents would like to see. But what kind of organisation tolerates that kind of inaction for that long? For something so basic as selling a building?

As Transnet is not using the centre and it’s costing the organisation money, I have a suggestion: Just give the keys to anyone hanging around the entrance. Anyone. Ask for a rand maybe. Tell them, “Do what you want with it.”

At least then, we won’t have this infernal process of non-decisions, non-action, non-awarding, excuses, expenses, tender issues, yet another delay, a fight over BEE, yet another corrupt contract that goes to court and gets reversed, and so on. At least then, year after year, it won’t be yet another perennial problem not solved. In the meantime, the building is degrading, and eventually it will become unsellable, if it isn’t already

I’m not a businessperson, but surely the price you pay for not making a decision is often much higher than the price you pay for making a bad decision quickly, because a bad decision made quickly can be unmade quickly. Not making a decision means the problem doesn’t go away and just gets harder to solve. And it eats into your time for addressing much larger and more pressing problems.

And so on. Or is that just the cynicism talking? DM