The derailment of a 97-wagon train, carrying coal to Richards Bay for export, has Business Leadership South Africa (BLSA) CEO Busisiwe Mavuso concerned that ‘all the structural reforms aimed at improving South Africa’s economic growth prospects will be undermined if the rule of law does not prevail.’

In a media statement, BLSA says the derailment is the latest in a spate of increasingly brazen acts of economic sabotage by organised criminal gangs.

“Reports of extortion for financial or political gain are increasing in frequency of late, reaching more and more sectors, and the economic damage is mounting.”

The statement reads that Transnet Freight Rail (TFR) acting chief commercial officer Bonginkosi Mabaso says Transnet is losing R55m a day just on the coal line near Ulundi where the train was derailed.

But with the multiplier impact on the mining and other industries, he reckons the economy is losing about R1b a day. Richards Bay Coal Terminal also faces penalties for not meeting export targets.

Mining and other industries losing millions

Trade, Industry and Competition minister Ebrahim Patel has put a cost of R47b annually on the wider economic damage.

He told Parliament in September that research showed that the economic costs from damage and theft to the infrastructure of Eskom, Transnet, Prasa and the reduced output of the mining industry, are estimated at R130m per day.

The train derailment is even more chilling because of the alleged extortion tactics used.

Mabaso is quoted as saying: “We were threatened that if we did not respond in a certain way there would be implications. A day after we received the last threat, the derailment happened.”

After that, the same and possibly other competing gangs, under the guise of ‘business forums’, were allegedly blocking access for trucks and articulated machinery to clear the debris from the derailed train, demanding work from the state-owned enterprise, says BLSA.

The clean-up had to be conducted under armed guard.

“That’s shocking but what’s really alarming is the silence from the authorities,” says Mavuso.

The media has been reporting more and more incidents of extortion-based crimes, and terms like the coal mafia and construction mafia have become part of our lexicon,” says Mavuso.