Transnet Opens Rail Network: LeaseCo Plan to Fast-Track Private Train Operators in South Africa
Transnet CEO Michelle Phillips says negotiations are advancing with the first 11 private train operating companies (TOCs) approved to access the state-owned rail network.
However, the companies have indicated it could take 12 to 36 months before operations begin.
Speaking at Transnet’s 2024/25 results presentation, Phillips said access to rolling stock remains a key barrier for TOCs, which is why the group is prioritizing the creation of a LeaseCo, a public-private partnership that will lease surplus Transnet locomotives and wagons to private players.
“We see LeaseCo as a potential game changer in accelerating the entry of TOCs into the market,” Phillips said. The entity will not require Transnet to hold a majority stake, and shortlisted partners are being identified following a prequalification process. A request for proposals (RFP) will be issued soon to secure a partner with the capital, skills, and refurbishment expertise to launch the venture.
The 11 new operators are expected to collectively move 20 million tons per year once fully operational, while Transnet Freight Rail Operating Company is targeting 180 million tons annually.
In the 2024/25 financial year, Transnet reported 160.1 million tons of rail volumes, up from 151.7 million tons in the prior year, but still far below the 226.3 million-ton record of 2017/18. The group aims to increase total volumes to 250 million tons per year by 2030.
Challenges Ahead
Despite the opportunities, TOCs will face challenges, including maintenance backlogs, cable theft, and vandalism, which have caused frequent derailments and service disruptions.
Transnet chairperson Andile Sangqu emphasized that the company is serious about opening the rail system after decades of monopoly.
The creation of the Transnet Infrastructure Manager (TRIM) was a critical step in separating infrastructure management from operations. A Network Statement, updated annually, now outlines available slots and tariffs for network use.
“We have introduced and welcomed competition into the rail network,” Sangqu said, noting that the reforms could unlock growth in critical sectors such as mining and logistics.
