South Africa will open its freight rail network to private operators, the government said Friday, in a bid to improve efficiency as state-owned Transnet struggles with chronic bottlenecks.
- South Africa will integrate private operators into its freight rail network.
- Transnet faces operational issues, prompting the move for increased efficiency.
- 11 private companies have qualified for negotiations to supplement Transnet operations.
- Operators will increase freight capacity by 20 million tons annually from next year.
South Africa will open its freight rail network to private operators, the government said Friday, in a bid to improve efficiency as state-owned Transnet struggles with chronic bottlenecks.
Transnet, which oversees the nation’s rail and port services, has been hampered by equipment shortages, maintenance delays, and widespread cable theft, prompting calls for greater private sector participation, according to Reuters.
DON’T MISS THIS: Africa’s richest country sees farm exports to the US jump 26% before tariff hit
Transport Minister Barbara Creecy said 11 out of 25 applicants had qualified to advance to the negotiation and contracting phase, though she did not name them. Logistics firm Grindrod confirmed it had secured access.
The companies aren’t replacing Transnet Freight Rail, they’re supplementing its operations by adding extra capacity to the volumes it already carries.
Long-term freight growth
Transnet’s freight volumes fell to 152 million metric tons in 2023/24, down from a peak of 226 million in 2017/18. The new operators are expected to add 20 million tons annually from the next financial year, to reach 250 million tons by 2029.
DON’T MISS THIS: Africa’s richest country advances plans for new nuclear plant
The operators have been allocated slots across 41 routes, mainly for bulk commodities such as coal, iron ore, chrome, manganese, sugar, and fuel. Contracts will run between one and 10 years and require safety permits, suitable rolling stock, and port access.
The government has already extended 149 billion rand ($8.4 billion) in guarantees to support Transnet’s turnaround, and the company is seeking an additional 35 billion rand in infrastructure funding this year.
