In a landmark decision set to redefine South Africa’s logistics landscape, Transport Minister Barbara Creecy has announced that 11 private Train Operating Companies (TOCs) have been granted conditional access to Transnet’s rail network. This move marks a pivotal moment in the government’s strategy to revitalize the country’s ailing rail infrastructure and is a direct response to the chronic inefficiencies that have plagued the state-owned entity for years.
The full list of the 11 companies has not yet been publicly released. The one exception so far is Grindrod Freight Services, which has confirmed it was awarded a slot on one of the routes.
The decision is a significant step in the implementation of the National Rail Policy, which aims to introduce competition and private investment into the rail sector while maintaining state ownership of the infrastructure. The process, managed by the newly established Transnet Rail Infrastructure Manager (TRIM), saw 25 companies apply for slots on the network. The 11 successful applicants will now proceed to a crucial phase of negotiations and contracting before they can begin operations.
New Rail Corridor Entrants:
- North Corridor: 6 new entrants for 15 routes, carrying commodities like Coal and Chrome.
- Iron Ore Corridor: 1 new entrant for 1 route, carrying Iron Ore.
- Cape Corridor: 2 new entrants for 2 routes, carrying Manganese.
- Northeast Corridor: 6 new entrants for 16 routes, carrying Coal, Chrome, Magnetite, Fuel, and Containers.
- Central Corridor: 1 new entrant for 2 routes, carrying Coal, Containers, and Manganese.
- Container Corridor: 4 new entrants for 5 routes, carrying Containers and Coal.
This initiative is not a form of privatization but rather an “open access” model, a common practice in many developed economies. It aims to increase the volume of freight moved by rail, reducing the strain on the country’s roads and the associated maintenance costs. The new operators are expected to carry an additional 20 million tons of freight annually starting from the 2026/27 financial year, a crucial contribution to the government’s ambitious target of transporting 250 million tons by rail annually by 2029.
The private sector’s participation is expected to unlock much-needed investment, with the potential to inject as much as R100 billion in new funds for rolling stock and infrastructure. However, the successful TOCs must first meet several conditions before they can operate, including obtaining permits from the Railway Safety Regulator and securing port offloading capacity.
This is a clear signal that the government is serious about rail reform. While challenges remain, including the need to address Transnet’s significant historical debt and the ongoing threat of theft and vandalism, this move provides a solid foundation for private investment to play a key role in the future of South Africa’s rail network. The collaboration between the public and private sectors could be the locomotive that finally pulls the country’s economy back onto a path of sustainable growth.
