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Thieves threatens World Bank-funded Rail Project in South Africa's Coal Region, Delaying Access to Power Plant

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Thieves threatens World Bank-funded Rail Project in South Africa's Coal Region, Delaying Access to Power Plant

Posted on : 30-06-2023 | Author : Bloomberg

Photo by Bloomberg

A World Bank Group-funded initiative to improve train access to a power plant in South Africa's coal-rich region is facing significant setbacks due to criminal activity targeting the country's railway system.

The development of a 68-kilometer route between Ermelo and Eskom Holding’s Majuba power station began over ten years ago with the aim of replacing the continuous flow of coal trucks. Once completed, the rail line is expected to be a more cost-effective, faster, and environmentally friendly mode of transportation, as stated by the World Bank.

However, it remains uncertain when the train service will commence. Since April 2022, there have been eight instances of theft and vandalism of railway infrastructure, according to Eskom. The Majuba train line was 97.5% complete in 2021, but due to damage caused by copper cable theft and acts of vandalism, the project's completion has now regressed to 87%.

The motive behind the theft of copper cable for scrap may not be the only driving factor for criminals. Eskom revealed that intelligence assessments indicate that criminals target railway lines to promote increased demand and opportunities for truck usage.

The Majuba railway line falls under the World Bank's Eskom Investment Support Project, which aims to enhance power supplies while supporting long-term carbon mitigation efforts. The total cost of the Majuba project is $402 million, with Eskom contributing $132 million in financing, and the World Bank providing a $270 million loan, which is currently being repaid.

Although certain aspects of the broader project are still ongoing, weaknesses have already emerged. An EISP report found that Eskom's declining market share will impact the utility's finances, and poor performance at the Majuba station has resulted in a reduced coal consumption.

Criminal activities, including violence and theft, have also surged at Eskom in recent months. The World Bank acknowledged sabotage as a significant challenge faced by the company, which appears to be prevalent across its generation fleet. Incidents of this nature more than doubled in 2022 compared to the previous year.

This adds to the existing challenges for a company already struggling to meet electricity demand. South Africa has been grappling with power outages since 2008, but the outages have reached record levels this year, lasting up to 10 hours per day. Even the deployment of soldiers at Eskom stations has not been effective in curbing crime.

Transnet, South Africa's port and rail operator, is also battling widespread theft and violence. The theft of miles of cable from its electric rail operations in a single day has been reported, leading to train limitations between coal mines and Majuba last year following infrastructure damage and the killing of a security guard.

Eskom aims to complete the project by the end of March 2024, although it was initially slated to commence operations in 2016.