South Africa, Africa’s richest country, will open its freight rail network to private operators, the government announced Friday, in an effort to improve efficiency as state-owned Transnet struggles with chronic bottlenecks.
Transnet, which manages the country’s rail and port services, has faced equipment shortages, maintenance delays, and widespread cable theft, prompting calls for more private sector involvement, according to Reuters.
Transport Minister Barbara Creecy said that 11 out of 25 applicants have qualified to move forward to the negotiation and contracting stage, though she did not disclose their names. Logistics company Grindrod confirmed it had secured access.
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The new private operators are not replacing Transnet Freight Rail. Instead, they 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 incoming operators are expected to contribute an additional 20 million tons per year starting next financial year, with total volumes projected to reach 250 million tons by 2029.
They have been allocated slots across 41 routes, primarily for bulk commodities including coal, iron ore, chrome, manganese, sugar, and fuel.
Contracts will range from one to ten years and require safety permits, suitable rolling stock, and port access.
The government has already provided 149 billion rand ($8.4 billion) in guarantees to support Transnet’s turnaround, and the company is seeking another 35 billion rand in infrastructure.
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Image Credit: Voice of Nigeria Broadcasting Service
