The world is changing fast and to keep up you need local knowledge with global context.
Transnet has sent an SOS to the government about the freight chaos on the Joburg-Durban corridor, urgently calling for action to combat sabotage and cable theft. Francois Nortjé, Director of Distribution Junxion at the Port of Gauteng and a prominent advocate for rail issues, emphasised that this chaos has persisted for 22 months He told Biznews that the recent problems are not unprecedented, and there remains a lack of effective legislation to address the prohibition of copper exports. In an interview with Linda van Tilburg of Biznews, Nortjé estimated that Transnet’s losses due to these issues amounted to R30-35 billion, surpassing the impact of state capture.
Extracts from the interview
R7 billion rand lost in 22 months and still no legislation on copper exports
It’s been 22 months. Now they are crying out for help, and I don’t know the entire container corridor. I am in the land in the Port of Gauteng, which is just the last part of the Transnet line before it becomes a PRASA line… so I don’t claim to know the entire line, but this theft has been happening for a long time. I have a guy who works for me studying logistics. He stays on the property next to the railway line. He counts the trains for me. There hasn’t been a major drop in the last three weeks or two weeks, so it’s nothing new. They should have spoken up 22 months ago. It’s good that they are speaking up now and that something can be done about it. But this is nothing new. In these 22 months, Transnet has lost another R7 billion on that line. In the year ending March 2022, they lost R3.4 billion on that line. That’s what they told Parliament. So, these figures are not from me. Waiting for 22 months is costing R7 billion and no legislation has been passed to prevent the exportation of copper cable. And to me, that is the most important thing because you are fighting organised crime that buys stuff from the people who are stealing, and it’s very difficult. So, reduce the demand for it. Don’t allow copper to be exported. Why that is not being expedited through Parliament, I don’t know.
No private shareholder would accept losses of R10 million a day
They are over-dramatizing that it has now suddenly dropped so dramatically. There was a false impression that traffic on the line dropped 75% two weeks ago. Now, it was always at about 30%. Now it has just dropped to 25%. We count the trains, we know how few there are. They are much fewer than what they were before COVID. It’s sad, and now they want to privatise this line, which is good because they can’t run it. But they could have stopped this bleeding two years ago. So, hopefully, they’ll get it right quicker now that they realise the pain of hanging on. Holding this line is now getting so bad because, at more than R10 million a day, I don’t know who can hold on. It can only be the government. Nobody with private shareholders whose own money is in the game would take this kind of bleeding R7 billion over 22 months when you could have pressed the button 22 months ago.
Privatising the “gangrene” part of Transnet is going to be difficult
You can’t have everything on the highway between Durban and Joburg, it will be a mess. That line needs to work, but whether it can work is another question given the way Transnet wants to privatise it. The train takes about 24 hours from Durban to City Deep, it’s roughly 625 kilometres, as I understand it. I hear it’s a bit longer. These trains take three hours to cover the last 25 kilometres to avoid a head-on collision with a passenger train. Once you reach City Deep, there is a World Bank report from 2016 by a person named Duncan, who worked at the Treasury that revealed that it takes a week to turn the trains around at City Deep and Kazerne. In 2014, they announced that they were going to spend money on upgrading City Deep and Kazerne, and now it’s 2023. The access road to Kazerne has not been started yet; it is still a gravel road filled with potholes. City Deep and Kazerne were designed 50 years ago, following an old-fashioned and archaic methodology. So, how do they plan to privatise this line? Because that’s what they want to do with a 20-year concession. You privatise it with a part that’s got gangrene for the last ten years, that’s busy killing Transnet.
Bigger losses at Transnet than state capture
I believe this line has lost more money than state capture. It lost R20 billion without interest until February 2022, and it must have incurred an additional R5 billion. Now, if you consider the tax break they receive due to making a tax profit in some years, and then you add the interest, this line has cost Transnet approximately R30-35 billion since 2010.
- Paul O’Sullivan: Wolves guarding sheep at new SAPS Kidnapping Unit; and ‘it’s personal’ vendetta against State Capture law firm
- OUTA: Kusile corruption case reveals powerful state capture network
- Linebooker, SA’s Uber for freight, beats stress test after month-on-month growth accelerates to 20%
- Premium: How world sees SA – Durban’s self-made disaster is hammering the economy
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.