South Africa’s Transnet Investigates Coal Train Line Derailments

(Bloomberg) -- South Africa's state-owned rail company Transnet SOC Ltd. is repairing a main line used to export coal and investigating whether recent derailments benefited suppliers.

A train of over 200 wagons derailed July 3 on its way to Richards Bay, where Africa's biggest coal terminal is located, Transnet said in a statement. Repairs continue on the line that's partially open after the second such incident of the financial year.

“What is clear to us is that things have to change,” Transnet said. It is reviewing the cause and contributing factors of all recent derailments. “There are serious risks in a recovery system based on emergency procurement, which may be open to abuse not only internally, but by suppliers who benefit from such incidents occurring,” the company said.

Read: S.Africa's Richards Bay Coal Terminal 2020 Exports Drop 2.7% y/y

Transnet plans to reduce dependency on outside contractors and require the certification of those who continue to provide services. “Not only must our partners be suitably qualified, they must be contractually accountable,” Transnet said.

Many of South Africa's state-owned companies face financial struggles, having been weighed down by corruption and mismanagement. Transnet and power utility Eskom Holdings SOC Ltd are integral to the economy and require fundamental changes in order to succeed.

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