ARC Plans $170M Entry into South Africa Rail Sector as Transnet Opens Network to Private Operators
A United Arab Emirates–based rail logistics company, African Rail Company (ARC), is preparing to enter South Africa’s freight rail market as Transnet opens its network to private operators under its third-party access framework.
ARC is aiming to raise approximately $170 million (about R2.8 billion) to fund the acquisition of locomotives and wagons for operations on South Africa’s rail infrastructure.
The funding structure is expected to comprise roughly 30% equity and 70% debt, with participation anticipated from private equity investors, particularly from the Middle East, alongside shipping companies and development finance institutions. The company has not yet disclosed any confirmed investors.
According to reports, ARC is among 11 private operators granted conditional access to the Transnet rail network as part of efforts to liberalize South Africa’s freight rail sector and reduce the state-owned entity’s long-standing monopoly.
The company plans to acquire around 15 locomotives and 250 wagons over the medium term.
In the initial phase, ARC intends to begin operations using a mix of existing, refurbished, and leased rolling stock while awaiting delivery of new equipment.
Its planned operations will focus on key regional corridors, including the fuel transport route linking northeastern South Africa with Mozambique, the Gauteng–Durban corridor, and the copper export route moving freight from the Democratic Republic of Congo to the Port of Maputo.
Operations on these routes are expected to begin between the third quarter of 2026 and the first quarter of 2027.
Commenting on the development, industry stakeholders have noted that private-sector participation in rail could help ease pressure on South Africa’s roads and ports while improving logistics efficiency and turnaround times.
ARC executive director Youssef Elgonaid said rail remains the only viable solution for these high-volume corridors and highlighted the company’s regional experience.
He noted that ARC has spent over a decade operating rail logistics across Mozambique, Zimbabwe, and Botswana, where it has become a major transporter of fuel and other bulk commodities.
Elgonaid added that South Africa represents a significantly larger opportunity, with potential to scale similar operational models across a far bigger network.
