The state logistics utility Transnet has had to scale up investment in its security systems, including the use of drones and additional boots on the ground to counter the escalating theft of fuel from pipelines, which have also brought the additional cost of environmental resuscitation of the areas of spillage after leakages seeped into the ground.
At the group's financial results presentation for March 2021 on Friday, chief executive Portia Derby said the theft of fuel, copper and coal had a telling effect on the group finances, particularly as it felt compelled to mitigate the environmental impact of fuel seeping into the ground after thieves had left the pipes leaking.
This is an issue likely to escalate with the impending rise of fuel later this month after the Automobile Association of South Africa (AA) forecast a drastic increase in fuel prices, with petrol anticipated to go up by 99 cents a litre, diesel and illuminating paraffin higher by R1.42 a litre.
The threat intensified on Sunday morning after three people died in an attempted fuel theft incident on the Transnet fuel pipeline in Clairwood Durban.
Transnet Pipelines chief executive Michelle Phillips reported that, to date, 159 arrests had been made, 254 criminal cases opened, 57 fuel tankers and 54 vehicles impounded.
In its financial results up to March 2021, Transnet said expenditure not related to its core business included unusual environmental management expenses of R1.2 billion, provision for unusual third party claims of R3.6bn and impairments of R1.6bn.
“Without the impact of the above expenses, Transnet’s net financial loss would have been R3.8bn instead of R8.4bn,” it pointed out.
The group reported that pipeline volumes were 26.4 percent lower than the prior year due to imposed travel restrictions and the negative impact of fuel theft incidents.
Fixed costs, mostly personnel costs, maintenance and security costs, increased by 14.64 percent increase in external, non-core operational expenses, amounting to R5.6bn.
Rail volumes reduced due to constrained demand, cable theft, power failures, vandalism, adverse weather and derailments.“
In the 2021 financial year, Transnet incurred a financial net loss of R8.4bn, mainly as a result of the Covid-19 impact on our operations and other expenses that are not normal to our business operations, either due to their nature or quantum, Transnet said.
Derby said Transnet had initiated stringent security on its rail track infrastructure as theft has become endemic.
"Cable theft is tenacious. We have identified hot spots and have initiated the use of drones and additional security on the coal lines. We have spoken with our partners about the best ways to handle this," Derby said on Friday.
She said on the Transnet north corridor, which was the hardest hit, at least 24 percent of train cancellations were a result of vandalism.
On another note, Derby said the utility was taking a closer look at its property portfolio and saw an opportunity to resuscitate its assets, some of which have become derelict and had been vandalised or hijacked by homeless people.
She said plans were afoot to off-load residential properties to staff and other interested parties while commercial assets were due for redevelopment with suitable partners.
The commercial re-developments include the Gcebega Waterfront, talks with the Johannesburg Metro on resuscitation of properties there as well as the reconfiguration of the Old Durban Airport to an auto park.
Transnet has scaled down on leasing workspace and is using its own properties to work from.
BUSINESS REPORT ONLINE