Transnet bemoans lack of adequate law enforcement to bring rail saboteurs to book

Cash-strapped rail utility Transnet on Friday hit out at law enforcement, saying it was partly to blame for the chaos in the logistics industry.

Crumbling road infrastructure, billions of rand in lost export earnings and scores of job losses lie in the wake of a dysfunctional rail system that too often functions at the mercy of well-organised criminals.

Speaking at the McCloskey Southern African Coal Conference in Cape Town on Friday, Mabaso said at least 4-million tonnes of the unmet volume could not be delivered due to criminal activity.

According to Bonginkosi Mabaso, chief commercial officer at Transnet, the 12-milliontonnes difference between what TFR should have achieved and what it managed was primarily due to security issues.

Many of the people who get arrested for crimes such as cable theft, he said, were repeat offenders. “This is because the conviction rate has been very low,” Mabaso said.

Transnet was moving 226.5-million tonnes of goods via rail in 2017/18. Four years later, in 2021/22 this had decreased by a third to 150-million tonnes.

Nowhere has the undoing of rail services been more pronounced than in the coal industry. Coal railed via Transnet Freight Rail’s (TFR) coal line (part of the North Corridor) to Richards Bay Coal Terminal (RBCT) decreased sharply, from 70-million tonnes in 2020 to 50-million tonnes in 2022. Last year that number fell further, to about 48-million tonnes against TFR-contracted capacity of 60-million tonnes.

Another Transnet executive, speaking at the same event, said they had been disappointed in the ability of law enforcement to work with the information it gets from Transnet to send criminals that work as part of syndicate networks to jail.

“We want to run trains, but we have become glorified investigators,” said Theo Johnson the acting managing executive for TFR’s north corridor.

“We need to close the gap between [arrests and convictions], too many [of the criminals] come back to commit the same crimes that they were previously arrested for.”

Johnson said it was clear that some of the criminals getting arrested were wellorganised and part of syndicates targeting the coal line.

“They know exactly where to pounce to bring the coal line to a standstill. They have gotten smart — when we close one gap they soon move on to the next site,” he said.

Mabaso said theft and vandalism incidents on the North Corridor increased by more than 1,800% between 2017/18 and 2021/22.

One way in which Transnet is trying to improve the security situation is by appointing peace officers. They were at an “advanced stage of finalising the peace officer deployment”, said Mabaso. These peace officers will focus on improving case management processes to ultimately improve the conviction rate.

But crime has not been the only factor leading to the decline in coal railage performance — the unavailability of locomotives has been equally damaging.

Transnet has been struggling since 2019 to get a service provider that can assist in supplying spare parts for some of the trains it bought in a controversial deal with Chinese manufacturer CRRC E-Loco Supply for 1,064 locomotives. It has about 200 locomotives that remain idle and cannot be returned to the railway lines as the CRRC refuses to provide it with spare parts.

The total number of locomotives available for the coal line has dropped by about 40% from 259 in 2017/18 to 160 in 2022/23.

Business Day has previously reported that TFR recently signed a mutual co-operation agreement with industry stakeholders that has allowed RBCT to procure batteries and compressors for stranded locomotives. These spare parts, which are expected to be delivered by April, could see up to 50 locomotives return to service, said Mabaso.

The deterioration of rail services to the coal industry has cost miners and exporters dearly. Transporting coal to port by rail costs about R230/tonne, but when trucked via road these costs can easily increase almost threefold to about R750/tonne, said Alan Waller, CEO of RBCT.

This has a direct impact on coal margins and while exporters could justify the higher transport cost when the coal price hit record highs in 2022, at current prices in the region of $100/tonne it becomes more difficult to afford trucking.

The economic repercussions of lower coal prices, combined with the rail crisis have been devastating.

Seriti Resources, which supplies coal to Eskom and the export market, retrenched hundreds of workers at its Klipspruit Colliery in Mpumalanga last year.

The Minerals Council of SA previously estimated that if SA managed to fix the logistics bottlenecks, the mining sector could earn an additional R150bn in revenue per year through exports of coal, chrome, ferrochrome and manganese.

Much of the coal that could not be moved to port via rail has now shifted to road. Figures supplied by the Minerals Council show that between 2019 and 2023 total coal exports from SA dropped by only about 4% to 70-million tonnes. This means that a large share of the 12-million tonnes not moving through RBCT is now being trucked to other ports in SA and Maputo.

The number of trucks on the roads has increased “massively” and the road infrastructure along some routes, such as the N2 from Ermelo to Pongola (en route to Richards Bay and Durban), cannot handle the tonnage that is being moved.

Gavin Kelly, CEO of the Road Freight Association, said these roads have not been built to carry the tonnage being transported by coal trucks.

“If we continue using the roads we are now using, without real maintenance being done, we have about 18 months before we start seeing a real collapse of road infrastructure,” said Kelly.

“We really need to get rail sorted out as soon as possible.”

erasmusd@businesslive.co.za