Spiralling fuel bill hits Swazi Rail costs

Customer diversification a key focus
COAL MAY be the last mineral mined for export today in Swaziland, and with 100% of production sold to South Africa and depending on Swaziland Railway for transport, that commodity might be assumed to be key to company profits. But in fact, only 4.5% of the 41 year-old rail system’s income is derived from coal. Sugar merits a far bigger share of profits: 20%. The landlocked country imports all its petroleum products from South Africa, and these account for 16% of the railway’s profits, followed by the importation of cement (10% of profits), the export of timber products from Swaziland’s commercial forests (10%), the export of paper pulp (8%) and the importation of wheat for the country’s baking needs (5%). All exports are shipped through the Port of Durban to customers in the US (garments) and Europe (sugar). Paper pulp, timber and coal tend to go in the opposite westerly direction for use in Gauteng. There is still no direct rail route from Swaziland Railway’s Inland Container Depot, the so-called dry port at the Matsapha Industrial Estate, and Johannesburg. Freight first has to go north, to Komatipoort. “Fuel price rises are worrying us. Our policy is to keep customer rates consistent for 12 months. 50% of the direct operating costs of moving cargo is fuel. Diesel was R3.90 in April, R4.70 a month later,” Stephen Ngubane, director of marketing for Swaziland Railways, told FTW. As for the problems faced by the country’s garment and sugar industries, Ngubane said these highlighted the railway’s need to expand its customer base. “We look for clients whose needs we can match. Definitely, we need to increase our client base,” he said. As the company pursues its goal to privatise, a cost cutting campaign is centred on voluntary retrenchments. “Labour is a component of operating costs. We don’t just send people home; we’ve turned them into service providers. 300 former employees have formed companies we now use, and they have gone on to employ 250 more people,” Ngubane said.