KZN business forum shuts down Transnet coal line operation in violent clash | Fin24

A file photo of freight trains delivering coal to the Richards Bay Coal Terminal in KwaZulu-Natal.

• Transnet said attempts to restore the service on a key coal line have been disrupted by an Ulundi business forum.
• Transnet has declared a force majeure over this week’s derailment. 
• It has previously declared force majeure over floods, a fire, riots, a cyberattack and a strike. 
• For more financial news, go to the News24 Business front page. 

Transnet has withdrawn its teams from the site of the derailment on the coal export line to Richards Bay after a violent clash with the Ulundi Business Forum which was demanding business opportunities in the salvage operations. 

The development will cause further delays in restoring operations after Tuesday’s massive derailment of 87 wagons, which also damaged a substantial piece of the track. On Thursday, the company declared its sixth force majeure in 18 months in an attempt to avoid penalties on its contracts with users that contain a minimum delivery target. 

READ | Transnet declares force majeure at ports over strik

In a statement on Friday afternoon, Transnet said that industry users, which have been assisting in the salvage operations, initiated consultation with the business forum. Business forums have become a feature of local construction and mining activities, often using extortion and violence to secure business opportunities.  

“Industry has contracted the Ulundi Business Forum for equipment to assist in the derailment recovery and the Forum now insists on direct contracts with Transnet over and above what they have with Industry. Transnet rejected this demand and the forum resorted to violence which included assault, blocking access roads and the discharging of a firearm,” said the statement. 

South African Police Service (SAPS) and Transnet security personnel are on the scene and Transnet said it would lay charges of violence, tampering with essential infrastructure and extortion.

Transnet has declared force majeure six times since July 2021 for parts of its business due to a cyberattack, riots, a fire, floods, a strike and now the derailment. In a statement earlier this week, Transnet said that it was investigating the cause of the accident but that sabotage was suspected as it had received threats from the surrounding community, demanding business opportunities. 

In terms of the agreements that Transnet has with users of the export coal line, Transnet is required to transport a minimum contracted tonnage of coal or face financial penalties.

In a letter to users on Thursday, the company said: “Following the derailment, Transnet promptly notified Coal Export Parties of the situation and further advised Coal Export Parties that it was prevented from or may be delayed in performing any of its obligations under the Agreement.

Under the contracted arrangements, Transnet Freight Rail committed to delivering 60mt during the 2022/23 financial year and is far behind on its commitments. The company has not yet said how long it will take to clear the derailment and restart operations. 

In the interim, some critical flows like chemicals, will be diverted via the mainline between Durban and Gauteng.