R30bn–R40bn Private Investment Needed as Transnet Targets 250 Million Tonnes in Rail Freight Growth Plan
Private-sector participants (PSPs) will need to move approximately 65 million tonnes of additional cargo on South Africa’s rail network to help Transnet achieve its target of 250 million tonnes per year, according to rail logistics executive Anand Moodliar.
Speaking at a Transport Forum event held in partnership with the African Rail Industry Association and the Localisation Support Fund, Moodliar said that achieving this so-called “railway renaissance” would require significant private-sector capital deployment.
He estimated that procurement events exceeding R30 billion, and potentially up to R40 billion, would be necessary to meet rail freight growth targets.
Moodliar, CEO of the Barbery Group, emphasized that the success of Transnet Freight Rail’s open-slot access model which allows private operators to run trains on the state-owned network depends on building symbiotic public-private partnerships rather than fostering destructive competition.
Echoing sentiments previously expressed by Transnet Group CEO Michelle Phillips, he said the balance between competition and cooperation will be critical to the sustainability of rail reform.
Under the open-access framework, train operating companies applying for network slots must demonstrate that their services add incremental value to the system. Simply displacing existing rail volumes would undermine the objective of increasing total throughput.
The additional 65 million tonnes must therefore represent new cargo shifted onto rail, rather than redistributed volumes.
Moodliar cautioned that the private sector has not yet fully seized available opportunities, particularly compared with participation levels seen in other African rail projects.
He suggested that stronger coordination through industry bodies could help unlock the “power of local” and position South African firms more competitively in large-scale infrastructure initiatives.
The broader challenge remains rail’s competitiveness against road freight. Performance-Based Standards (PBS) in trucking now allow payloads of up to 50 tonnes, with approvals underway to increase capacity to 60 tonnes through additional axle configurations. These developments intensify the modal competition between road and rail.
For rail to capture greater market share, it must offer cost efficiencies that support exporters, stimulate mining output and expand related manufacturing activity.
Following the recent Mining Indaba in Cape Town, Moodliar noted that each additional one million tonnes moved by rail could generate approximately R100 million per year in access fees, providing vital revenue to reinvest in network stability and infrastructure upgrades.
Accelerating volume growth, he argued, would immediately strengthen Transnet’s financial position and unlock further investment into modernising and stabilising the rail network.
South Africa’s rail freight sector, Moodliar concluded, has reached a critical inflection point. The ability of private operators to mobilise capital, add new volumes and collaborate effectively with Transnet will determine whether the country can achieve a meaningful and sustainable shift from road to rail.
