Toyota's Japanese insurer files R6.5b lawsuit against KZN government
TOYOTA South Africa Motors' (TSAM) Japan-based insurer, Tokio Marine and Nichido Fire Insurance Co. Ltd, is suing the KZN Department of Transport (DoT), Transnet and the eThekwini Municipality for R6.5b for the unprecedented damages faced by Toyota's Prospecton branch following the devastating April 2022 floods.
Also read: Floods hit Prospecton industries hard
The insurer filed a summons in the Durban High Court against the three defendants, with the plaintiff's court papers stating the defendants had failed in their duties of maintaining the key infrastructure meant to safeguard the Prospecton Industrial Area from flooding.
It is stated within court papers that Transnet owned the Umlaas Canal and was therefore responsible for its maintenance, management, and responsible handling of the flood risk associated with it. The canal, which is lined with concrete, channels and diverts the Umlazi river around the Prospecton Industrial Area. Together with the diversion berm, which falls on the Department of Transport to maintain and manage, it forms a vital part of the flood control and prevention for the area. In addition, it states responsibility for the stormwater management system falls on the eThekwini Municipality.
'As a result of these failures, Toyota was compelled to engage various contractors to repair the damage caused by the flooding and hired specialist engineers to repair the structural damage to the premises, as well as damage to electrical installations, plumbing, air-conditioning and assembly systems,' it said.
The damages, which amounted to over R6.5b, included almost R4.5b for the costs incurred during the repair and reinstatement of the premises and property, and over R2b for the losses incurred during business interruption.
Also read: KZN floods listed in top 10 costliest climate disasters of 2022
MEC of the KZN DoT, Siboniso Duma, engaged with president and CEO of TSAM, Andrew Kirby on June 20. He said, 'We have agreed to sustain our relationship. We will do that in the interest of the people of KZN and the whole country. Over the years, we have worked well with Kirby and executive vice president of TSAM, Nigel Ward, manufacturing, and Toyota. We agreed that nothing should come between us and this enduring relationship. The current litigation is not being facilitated or funded by TSAM, and it does not benefit in any way from the subrogated recovery action against us. We have no doubt that Toyota will continue to be the most preferred brand in the country. One cannot over emphasise the contribution the motor car industry had made to our economy.'
eThekwini Municipality spokesperson Gugu Sisilana said the municipality was aware of the court action and had filed a notice to defend.
Transnet's media desk issued a brief response, saying it is aware of the litigation initiated by Toyota insurers and has filed a notice to defend. It further stated that given the early stages of the case, it would be premature to offer further substantiation.
The April 2022 floods
Following the trail of carnage left by the April 2022 floods, heavy rainfall and landslides in KZN, President Cyril Ramaphosa declared a national state of disaster.
Toyota's Prospecton plant was ravaged by the floods, and the business was left with around 4300 flood-damaged vehicles, nearly 90% of the cars on site.
The automotive giant reported that over 100 000 new equipment parts needed replacing. Astonishingly, after three months of intense repairs and support from the company's Japanese head office, production resumed in August 2022.
Following this, TSAM invested over R200m to prevent disasters of similar magnitude going forward, and over R100m was dedicated to establishing monitoring and maintenance systems to proactively guard against water ingress.
These included an early-warning weather monitoring system, construction of perimeter canals, and significant upgrades to the site's stormwater network.
An additional R128m was spent on internal interventions to protect the facility even if external systems failed. These included bund walls around critical infrastructure and raised doorways to reduce vulnerability to flooding.
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