Business and labour are counting the cost of the rise in theft and vandalism on state-owned railway operator Transnet Freight Rail’s (TFR) line linking Gauteng and Durban, which for the past week has been operating at a quarter of its capacity.
TFR blames the escalation of theft and vandalism along the 740km-long container corridor, which links the Port of Durban with City Deep station in Johannesburg, for the 75% reduction in operating capacity over the past week, according to Bloomberg.
However, unions and businesses that spoke to Business Day say continuous and desperate pleas to the state entity to arrest the destruction of the rail network, particularly in the container corridor, have yielded minimum results.
TFR is used by its customers to transport crucial commodities such as coal and iron ore from rail to port in SA and its neighbours. The container corridor is used to transport agricultural and automotive goods, grain, fuel, chemicals, coal, manganese and chrome.
TFR was already operating below capacity due to a shortage of locomotives, poor maintenance and vandalism and theft of infrastructure, costing its customers billions of rand in potential revenue due to throttled shipments, says United National Transport Union (Untu) acting secretary-general John Perreira.
“The workers are a bit unsure of what the future is ... there is a bit of uncertainty if the container is not profitable then job security is a concern,” Perreira said.
Representing 24,992 members at the Transnet bargaining council, Untu raised the alarm earlier in May over the continuous copper cable theft on the container rail corridor.
“The Pietermaritzburg area is a huge concern as we have learned that the Dargle and Lions River stretch is only using one of the double-tracked rail lines instead of both lines, thus impacting the efficiencies of the freight rail lines which directly impacts the profitability and efficiency of the TFR operating division,” Untu says.
Transnet’s weakened financial position, partly due to previous looting under state capture, allowed investment of only 30% in infrastructure, leaving its network vulnerable to vandalism and theft.
Cable theft
During the 2022 two-week-long wage strike, TFR says, cable theft surged 22%, costing millions in replacement on the container corridor alone.
The SA Freight Forwarders Association says SA’s rail network capacity has fallen from almost 230-million tonnes of freight in 2017 to 179-million in 2021.
Cable theft costs the fiscus R47bn annually and contributes to congestion in the logistics network, which impedes cargo flow to the ports.
On Thursday, furniture chain Lewis CEO Johan Enslin noted frequent problems on the Durban-Johannesburg line.
Enslin said that when Transnet had a four-week delay on the line around the Christmas season, Lewis was forced to use trucks at higher cost to transport imported furniture from Durban harbour to the warehouse. He said the problem had recurred in the past two weeks.
“I spoke about that line between Durban harbour and Johannesburg being out of action during peak trading. The last two weeks we had to deal with the rail line that was once again out of operation. And we once again were pushed into a corner, where we had to start making use of private logistics at a massive additional expense.
“It would be great if we can get better service delivery and some return for the taxes that we are paying.”
Chris Schutte, CEO of SA’s largest chicken producer, Astral, said at the company’s results presentation on Monday that 95% of its raw materials were transported by Transnet. “It is now only 5%. We now do it by trucking at four times the cost.”
Astral sells chicken feed to other producers and provides its four farms with feed as well.
Schutte also complained about Eskom’s generally poor performance.
“The dramatic demise of Eskom in the generation and distribution of electricity ... failing water supply networks, together with the disastrous state of Transnet, have destroyed the capacity of the agricultural sector to function efficiently, which is fast becoming globally cost uncompetitive,” he said.
The BMW Group relies on Transnet to export 53% of its cars, but due to capacity constraints it is only able to transport between 35% and 45% of its contractual obligations to BMW.
The only viable alternative to freight rail is transport by road. This comes with its own challenges, such as the strain on the road network, especially on the N3 to Durban, and from severe congestion in the Durban port, BMW said.
Similar sentiments are shared by Ford SA, which says the delays along the container corridor have added to additional losses in sales volumes locally of imported units.
“We have to shift production capacity around to meet daily production schedules, based on delays,” Ford said.
TFR had not responded to Business Day’s queries by the time of publication.
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