Crime syndicates are crippling South Africa: report

 ·13 Nov 2022

Transnet says that sabotage and the derailment of its locomotives cost the South African economy R1 billion a day as it tries to clear 5,500 tonnes of coal and assess the damage.

This comes after a derailment along its main coal line this past week, reported the Sunday Times.

On Tuesday (8 November), a train carrying export coal from Mpumalanga to Richards Bay was derailed near Ulundi – which prompted the freight rail company to investigate the matter as it was “extremely concerned about disruptions to its operations”.

During its investigation into the matter, Transnet CEO Bonginkosi Mabaso told the Sunday Times employees had received threats via WhatsApp. A day later, the derailment happened, costing the South African economy billions daily.

“Transnet loses R55 million in revenue daily, just on the coal line. If you look at the multipliers, the mining industry and the impact on the economy, you are looking at R1 billion a day due to this derailment,” said Mabaso.

This latest cost to the country comes shortly after prolonged strike action at Transnet over wage disputes crippled South Africa’s export industry.

The Minerals Council of South Africa said that the strike had cost the mining sector R6 billion a day, compounded on top of the R50 billion already lost by previous failings of Transnet.

Even before the crippling labour strike that hit the group in October, Transnet was operating well below target due to shortages of locomotives, poor maintenance, a lack of spare parts for trains, copper cable theft and vandalism.

According to data cited by the South African Association of Freight Forwarders (SAAFF), supply chain logistics delays have cost the economy between R100 million and R1 billion each day, but the overall cost “is substantially greater than that.”

Sabotage and crime syndicates are crippling SOEs

In addition to the 12-day strike over wage disputes, Transnet also said that cable theft spiked by 22% throughout the strike – further hobbling a service that has already cost exporters billions in rands.

“We have lost 12 kilometres of cable during the strike. The theft occurred between Ladysmith and Pietermaritzburg, which is a major hotspot for cable thieves,” said Transnet managing executive Rudzani Ligege.

Transnet executives said that the cable theft resulted from low numbers of security staff, who were concentrated in areas of protest. Ligege added that it would cost around R24 million to replace the 12 kilometres of stolen cable.

As Eskom has reported similar issues, Transnet is not the only SOE being robbed by these crime syndicates.

Within the same month as the 12-day strike at Transnet, Eskom roped in the help of the Special Investigative Unit (SIU) and the Directorate for Priority Crime Investigation (Hawks) to investigate several high-profile incidents – including theft of coal, the theft of diesel, the theft of cables, bomb threats, fraud and corruption, sabotage and various others.

One such case involved almost 6,000kg of aluminium being stolen from Eskom, while in another, diesel worth R200,000 was stolen from Kriel Power Stations, where transporters colluded with Eskom weighbridge clerks to steal the fuel.

Additionally, during its investigation, the SIU identified 334 conflicts of interest cases at the group, where employees were found to be potentially linked to various entities and vendors doing business with Eskom – finding 5,464 employees have been identified for failing to submit declaration forms declaring their interests.

Transnet’s head of safety and security, Marius Bennett, noted that these crimes are clearly a widespread issue across South African SOEs – adding that relevant authorities need to step in.

He said that these crime syndicates are not isolated Transnet incidents, and we need the National Prosecuting Authority (NPA) and the Police onboard to assist. “If we get this right, we will turn the tide on these crimes”.

Read: Government clarifies big changes to BEE laws in South Africa

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