Planned force majeure enforcement at Richards Bay port expected to harm economy and local business
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DURBAN - Businesses are set to feel the strain of a force majeure declared by Transnet Port Terminals at the Richards Bay port on Friday.
The force majeure comes as a result of two major fires that took place at the port, on October 6 and 13, which caused extensive damage to the import conveyor route.
Transnet Port Terminals (TPT) confirmed the force majeure in a statement.
“Given the catastrophic nature of the incident Transnet Port Terminals has no other option but to declare force majeure in terms of its entire operation until further notice, and until the Business Continuity Plan has been finalised. Force majeure is therefore hereby declared in terms of clause 13.1 and 13.2 of TPT’s Standard Trading Terms and Conditions, therefore declaring a total shutdown of all conveyor routes until further notice.”
Transnet Port Terminals also confirmed the damage to the different routes and the routes that were unable to operate.
It said the implications of the aforementioned incident were:
- Foskor Sulphur import route had been damaged and was unable to import commodities.
- Richards Bay Terminal Grindrod coal route had been damaged and, therefore, was unable to export cargo.
- Woodchips Silvercel belt had been damaged, however, this route could still operate.
Thami Sithole, the president of the Zululand Chamber of Commerce, said he anticipated a loss in business due to the force majeure. He said an assessment of the damage caused by the fire was still be undertaken.
“I anticipate a loss in business. The force majeure will cause a loss in time and significantly reduce the volume of products being pushed out.”
Mike Patterson of SA Roads Federation Zululand said he was concerned that the force majeure was already affecting businesses.
“Alton Industry is already being affected due to a recent backlog. If the conveyor belt is no longer working, heavy transport will have to be used that will cause increased traffic on the road.”
Patterson added that the conveyor system had been in place for years, and that force majeure would have a negative impact on the economy.
“The Richards Bay economy has been heavily dependent on the system that has been around for years – this will have implications for local business.”
Transnet said it was in the process of putting contingencies in place to address the issues of cargo handling operations.
“TPT is engaging with affected customers and is in the process of putting the necessary contingencies in place in order to address the extent of the impact of the fire on cargo handling operations.”
Transnet added that a time frame for repairs and a full return to operations could not be estimated.
“The estimated time for repair is currently unavailable and will largely depend on the scope of works that the team will put together after they have been granted permission to access the route by the fire, forensic and structural engineering teams who will be on site.”
Professor Irrshad Kaseeram, the deputy dean of research at the University of Zululand’s Economics Department, said the impact of the force majeure would be devastating, with different sectors of the economy being negatively affected.
“The force majeure will have a negative impact on the mining and agriculture industry.”
He added that it may lead to private businesses losing confidence in Transnet and resorting to other forms of transport.
“More trucks on the road can lead to environmental degradation. Some of the major issues from the force majeure are, in the short term, that increased road use can lead to higher prices, and in the long term a possibility of unemployment.”