Traxtion announced on Tuesday that it will invest 3.4 billion rand ($199 million) in new locomotives and wagons as it prepares to operate trains on South Africa’s mainline rail network for the first time following reforms that opened the system to private freight companies.
The government recently granted private firms access to Transnet’s freight rail corridors after the state-owned operator struggled to provide dependable service due to equipment shortages and maintenance backlogs stemming from years of underinvestment, as seen on Reuters.
Operations have also been undermined by cable theft and vandalism. Traxtion, which operates across 10 African countries, said the investment reflects rising private-sector confidence in the reform process and supports national efforts to move more freight from road to rail.
The additional capacity is expected to help ease a transport shortfall that has constrained the country’s commodity exporters.
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The planned spending includes 1.8 billion rand for 46 diesel-electric locomotives and 1.6 billion rand for approximately 920 wagons. The locomotives will be supplied by New Zealand’s state-owned KiwiRail and are expected to enter service within the next 12 months.
According to Traxtion Chief Executive James Holley, the new fleet will be able to cover roughly 5% of market demand.
“So we’re quite comfortable that there is a market for assets, high-quality, high-capacity assets, that can come in at a really cost-effective price as well, and come into the market quickly,” Holley said.
The locomotives will primarily operate on bulk commodity routes, which Holley described as the most commercially viable areas given the poor condition of much of the country’s rail infrastructure.
While he did not name the specific routes, he said discussions with prospective customers were at an advanced stage.
Bulk mineral exporters, including Kumba Iron Ore and thermal coal producer Thungela Resources, have previously reduced production because of capacity constraints at Transnet.
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