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ESR MONITORING GLOBAL COAL DEMAND

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MBABANE – The Eswatini Railways (ESR) says it will continue to monitor global incremental demand for coal, as it has shifted from Europe to Asian markets.

The company stated in its annual report that it was not oblivious to the threats to the coal business, which include a fall in coal prices, clients not favouring Eswatini, lack of locomotives and lack of personnel to support coal business. It highlighted that it was having continous engagement with stakeholders in a bid to address challenges. ESR noted that the projection was, coal prices would be steady for the next two to three years and ESR has increased the rate by 7 per cent for 2023/2024. ESR said it would also continue to monitor transit coal performance and concerns will only be observed once export falls below 100 000tonnes monthly.  In order to address the said challenges, ESR plans to inject more assets through procurement (40 CALJ Wagons and one locomotive).

Expenses

ESR further highlighted that the effects of the war between Russia and Ukraine also impacted the financial performance of the entity for the year ended March 31, 2023, as the organisation experienced significant price increases in certain expenses including fuel. This was reportedly partially offset by increased revenue from coal exports. There is no other direct financial impact on the financial statements. The organisation neither holds any investments, nor does it have any business partners in Russia.

Another challenge that was faced by the company was the transportation of illegal substances on trains. In order to address this, ESR keeps on improving security surveillance on trains at departure points (interface points with CFM,TFR and Eswatini). The company is also faced with loss or theft of fuel and in order to address that, the organisation seeks to develop a collaborative user requirement specification and technical specification. It has also deployed additional security officers during the day. ESR Board Chairperson Nonhlanhla Shongwe highlighted that the changing and sometimes hostile business environment emphasised the need to constantly review ESR’s approach to business. Shongwe said to this end, the Board adopted the 2023–2026 ESR Revitalisation Strategy with its three main pillars being Human Capital Development, Business Development and Operational and Business Excellence.

Stakeholders

She said the adoption of this strategy along with the Corporate Balanced Scorecard would allow ESR to monitor its performance across various key areas to ensure that it improves manpower planning and skilling as well as infrastructure and equipment upgrades. She said this would enable them to deliver tangible short, medium and long-term value to their customers, business partners and other stakeholders.The chairperson stated that in its commitment to be the logistics partner of choice, ESR continued to evolve through constant innovation and has put in place initiatives that would add value across the organisation and improve customer experience. She said the organisation was focused on dealing decisively with and eradicating challenges that threaten its sustainability, such as the recent scourge of fuel pilferage. She said ESR needs to strengthen controls regarding fuel theft cases, which are affecting the bottom line in terms of revenue.

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