South Africa Allows Private Operators on Freight Rail to Tackle Transnet Bottlenecks
South Africa will open its freight rail network to private operators, the government announced Friday, in an effort to improve efficiency as state-owned Transnet grapples with persistent bottlenecks.
Transnet, which manages the nation’s rail and port services, has faced equipment shortages, maintenance delays, and widespread cable theft, prompting calls for greater private sector involvement, Reuters reported.
Transport Minister Barbara Creecy said that 11 out of 25 applicants have qualified to move forward to the negotiation and contracting phase, though she did not disclose their names.
Logistics firm Grindrod confirmed that it had secured access.
The private operators will not replace Transnet Freight Rail but will supplement its operations by adding extra capacity to the volumes it already carries.
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 contribute an additional 20 million tons annually from the next financial year, helping total rail freight reach 250 million tons by 2029.
Operators have been allocated slots across 41 routes, primarily transporting bulk commodities such as coal, iron ore, chrome, manganese, sugar, and fuel.
Contracts will run between one and ten 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, while the company is seeking an additional 35 billion rand in infrastructure funding this year.
