R3.2bn. Lost. Not only to Kumba Iron Ore but to its shareholders too. And a large percentage of that will not flow into government coffers at a time when every cent is needed, not least to help rebuild KwaZulu-Natal.
Kumba told the market on Tuesday it had cut 1-million tonnes from its full-year sales target because of rail and port constraints and on a trailing average price of $220 (R3,224) a tonne. It is a big chunk of revenue not flowing into the SA economy.
If it were an unusual, one-off instance of poor logistics, then there would be far less to say. But other miners of bulk commodities as well as importers and exporters have long complained about Transnet’s rail and ports as bottlenecks in their strategies.
State-owned Transnet points firmly at theft and vandalism of its infrastructure as the root of its inability to move coal, iron ore, chrome, manganese and general freight, but these are relatively new arguments.
The complaints about Transnet’s service predate the latest excuses but will nevertheless cost billions to address, so the utility’s executives are turning to the private sector to help it address the problem of the rampant theft of cables, signalling gear and tracks.
Sitting on the outside of whatever meetings Transnet has with its clients and the state’s security services, it’s difficult to determine any sense of urgency or action to deeply problematic infrastructure giving the private sector sleepless nights.
What on earth have the security services been doing in recent years to protect such precious and invaluable infrastructure that is the biggest railway network in Africa, but one that has been so poorly managed and maintained in the democratic era?
It is criminal of the state to have allowed such an incredible resource to become neglected and vandalised.
If President Cyril Ramaphosa wants to revitalise his flagging efforts to lure R1-trillion of investment, he could whip his public enterprises minister Pravin Gordhan into urgent action to bring in private sector participants into ports and onto the rails, and then light a bonfire under his security cluster ministers to protect whatever’s left.
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