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Thieves threaten World Bank-funded South African coal rail project

The Majuba power station

The Majuba power station

28th June 2023

By: Bloomberg

  

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A World Bank Group-funded effort to increase train access to a power plant in South Africa’s coal-rich region has started to significantly backslide as criminals target the country’s rail system.

Development of a 68-kilometer route between Ermelo, east of Johannesburg, and Eskom Holdings’s Majuba power station started over a decade ago to replace the continuous flow of trucks delivering coal to the plant. Once completed, the rail line will be cheaper, faster and more environmentally friendly, according to the World Bank.

It’s unclear, however, when that train will start running: there have been eight instances of railway infrastructure theft since April 2022, according to Eskom. While the Majuba train line was 97.5% finished in 2021, as a result of vandalism and damage linked to copper cable theft, the project is now only 87% complete.

Selling copper cable for scrap may not be thieves’ only motivation. “The intelligence community has indicated through their assessments that the railway lines and links are targeted by criminals in order to promote increased demand and opportunities for the use of trucks,” Eskom said.

The Majuba railway line falls under the umbrella of the World Bank’s Eskom Investment Support Project, which is intended to enhance power supplies in a manner that would also support long-term carbon mitigation. Out of a total cost of $402-million for the Majuba project, Eskom contributed $132-million in financing and the World Bank loaned $270-million, which the bank said is currently in repayment.

With aspects of the broader project still underway, some weak points have already emerged. Eskom’s narrowing market share will hit the utility financially, an EISP report found, and poor performance at the Majuba station has already reduced the amount of coal the plant consumes.

Criminality, including violence and theft, has also spiked at the utility in recent months. “Sabotage was raised subsequently by Eskom as one of the main challenges the company has been facing, which appears to be an issue across much of its generation fleet,” the World Bank said in a reply to questions. Such incidents more than doubled in 2022 relative to the previous year.

This is yet another challenge for a company already struggling to meet electricity demand. South Africa has been dealing with blackouts since 2008, but outages have deepened to record levels this year and now last up to 10 hours a day. Not even the deployment of soldiers at Eskom stations has managed to keep crime in check.

Transnet, South Africa’s port and rail operator, is also fighting rampant theft and violence. Miles of cable are stolen from its electric rail operations in a single day, according to statistics posted on a company website. Last year, it was forced to limit the number of trains running between the coal mines and Majuba in the wake of infrastructure damage and the killing of a security guard.

Eskom aims to complete the project by the end of March 2024. It was initially expected to begin operations in 2016.

Edited by Bloomberg

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