The head of Transnet Freight Rail (TFR) North Corridor between Mpumalanga and Richards Bay, which has been implicated in the running of ghost trains, has resigned, worsening the entity’s leadership crisis.
Ali Motala’s resignation from the corridor, which transports key commodities such as coal, chrome ore and ferrochrome, follows the departure of TFR’s Siza Mzimela and Transnet CEO Portia Derby and CFO Nonkululeko Dlamini in October.
“He was very sick,” a source close to the matter told Business Day.
TFR confirmed Motala’s resignation on Monday, saying that he left for personal reasons. His successor will be named once governance processes have been completed.
“Motala has a wealth of railway experience and has officially agreed to be available until January 2024, to enable a smooth transition and handover,” TFR said in a statement.
The corridor has been under Motala’s stewardship since 2019, when he was appointed acting managing executive before being confirmed in the role two years later.
The Sunday Times has previously reported that the corridor was used by criminal syndicates to run ghost train operations, which refers to locomotives that run along Transnet’s rail network infrastructure but whose revenue does not flow back to the entity.
The syndicate has netted corrupt employees of the rail and ports company and their accomplices up to R50m in illicit kickbacks, according to the report. The matter was handed over to the Special Investigating Unit earlier in 2023 for further investigations.
TFR is Transnet’s largest division, contributing almost half of its revenue. It is also the most challenging division as it battles the escalation of theft and vandalism of its infrastructure, as well as a lack of locomotives.
The challenges for its rail infrastructure, particularly on its coal lines, have been cited as being behind a loss of revenue for some mining houses.
A lack of available Transnet rail capacity to export coal through Richards Bay Coal Terminal has forced miner Seriti to find alternative local markets.
To rectify the deteriorating rail infrastructure operated by TFR and to raise funds to upgrade and maintain the infrastructure, the company launched an auction of its slots in 2022, which would have allowed private players access to its network. However, the first phase of the project has hit a brick wall, with TFR cancelling the contract with chosen bidder Traxtion Sheltam.
The project has been criticised by potential bidders for requiring an investment of hundreds of millions of rand by third parties in equipment that would last 30 years for a two-year contract. TFR has previously defended the process despite warnings from the private sector that the requirements to gain access to the slots and the financing required are too stringent for the pilot phase.
The company on Monday conceded the two-year project limitations on the project “may have hampered rail development along the East London railway corridor”.
It said limitations will be addressed in phase 2 of the third-party open-access project.
Traxtion was chosen as the preferred bidder, with the expectation that it would access the rail network by April 2023. However, this was delayed to June at the request of Traxtion.
TFR announced the entire process has been cancelled with Traxtion after both parties agreed that the two-year pilot phase, which would have allowed the company access to slots between Kroonstad and East London on the Cape Corridor, was too complex to implement given legislative and infrastructure requirements.
“The phase 1 slots sale process was to explicitly serve the purpose of gathering insights and learnings that would inform the future implementation of third-party open-access regime on TFR’s rail network,” TFR said in a statement.
TFR announced in 2022 that the 16 slots along its Container Corridor (Gauteng to Durban) and South Corridor (Gauteng to East London) would be sold to third-party operators for two years on a take-or-pay basis. In other words, the buyer of the slot would have to pay the minimum portion of the agreed payment whether or not it made use of the slot.
TFR says phase 2 of the project, of which Traxtion will form part, will begin once the work of the department of transport and the Interim Rail Economic Regulator Capacity has been completed.
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