South Africa has announced plans to its freight rail network to private companies as the government seeks to relieve pressure on struggling state-owned operator Transnet. Transport Minister Barbara Creecy confirmed the report and said that 11 firms have been cleared to move forward in negotiations after meeting access requirements, with logistics company Grindrod among those granted slots.
The move comes after years of declining performance at Transnet, which has been hampered by equipment shortages, vandalism, and cable theft. Freight volumes fell to 152 million tonnes in the 2023/24 financial year, down sharply from a peak of 226 million tonnes in 2017/18. To keep the business afloat, the government has already extended 149 billion rand ($8.42 billion) in guarantees and Transnet is requesting a further 35 billion rand for infrastructure investment.
Role of private firms
Private operators will be allocated slots on 41 routes that carry bulk commodities such as coal, iron ore, chrome, manganese, sugar, and fuel. Contracts will run between one and ten years and require safety certification, rolling stock readiness, and port offloading arrangements. According to Creecy, the initiative is expected to lift rail freight volumes by around 20 million tonnes a year from the next financial cycle, supporting a government target of moving 250 million tonnes by rail annually by 2029.
Exporters are likely to benefit from the reforms, with the new operators projected to add 10 million tonnes of coal export capacity within three years. Mining giants such as Kumba Iron Ore and Thungela Resources, which have previously cut output in response to limited rail availability, could see some relief as additional capacity comes online.