(Bloomberg) —
South Africa’s government intends making it mandatory for all metal traders to get licenses and prevent them from dealing in cash, a measure aimed at combating a massive illegal trade in cables and wiring stripped from rail, power and telecommunication lines.
Traders will also be required to conduct due diligence on their customers and track the origins of their products, the National Treasury said in the annual budget review, which was published in Cape Town on Wednesday.
Cable theft and vandalism is undermining the government’s efforts to revive the coronavirus-battered economy by bolstering more infrastructure investment, enhancing the power supply and improving transport links.
Freight rail operator Transnet SOC Ltd., telecommunications company Telkom SOC Ltd., power utility Eskom Holdings SOC Ltd. and the Passenger Rail Agency of South Africa estimate that thieves and vandals cost them a total of 7 billion rand ($459 million) a year. The knock-on losses to the economy amounted to about 187 billion rand annually, the companies said in a joint statement last year.
The length of cable stolen annually from Transnet’s rail lines has surged 10-fold since 2016, with 1,423 kilometers (884 miles) taken in the eight months through November last year, according to the company. Thieves are increasingly targeting overhead wire as opposed to digging it up, which suggested that syndicates are becoming increasingly involved, it said.
Besides the direct costs, Transnet has also had to cut back on haulage when lines aren’t operational, leaving exporters of coal and other minerals unable to get their product to the ports.
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