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South Africa’s locomotive shortage unresolved after China visit

Public Enterprises Minister Pravin Gordhan

Public Enterprises Minister Pravin Gordhan

Photo by Bloomberg

2nd June 2023

By: Bloomberg

  

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South Africa’s Department of Public Enterprises Minister Pravin Gordhan said he’s yet to resolve an impasse with China that’s held up the delivery of locomotives and parts essential to improving the performance of the African nation’s State-owned logistics company.

Transnet, which operates the nation’s ports, freight-rail network and fuel pipelines, is being plagued by issues including vandalism, crime and a shortage of spare parts that have crimped South Africa’s mineral exports. Gordhan, who’s department is responsible for the company, attempted to resolve one of the problems when he traveled to Asia last month for talks with his Beijing counterpart.

The government is facing “continuous battles” in trying to resolve a dispute with Chinese suppliers of locomotives, he told lawmakers in Cape Town on Friday. “We remain optimistic with regard to that matter.”

Gordhan planned to discuss a dispute between China’s State-owned CRRC Corp. and South Africa’s central bank and tax authority. Relations with the company were already strained because Transnet sought to cancel a deal to buy as many as 1 064 locomotives from the Chinese firm and two other suppliers. CRRC retaliated by withholding spare parts, forcing Transnet to withdraw more than 300 locomotives from service.

Transnet’s declining performance has been costly for miners including Thungela Resources, Glencore and Sasol, which exported 50.4-million tons of coal through the Richards Bay Coal Terminal last year — the lowest volume in three decades. Recent disruptions to Transnet’s services on iron-ore and cargo lines have also occurred due to cable theft, hobbling the flow of goods and other commodities.

“The repeated, repeated problems of theft of copper” and other crimes “which we cannot get on top of as the state” is affecting the breadth of State companies, Gordhan said. The Department of Public Enterprises is also responsible for companies including power utility Eskom Holdings.
 

Edited by Bloomberg

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