The South African government has announced that it will permit private companies to operate trains on its freight rail network, in a bid to improve efficiency as the state-owned logistics provider Transnet struggles to meet demand.
Transnet, which oversees the nation’s freight rail and port operations, has been hampered by equipment shortages and maintenance delays, exacerbated by widespread cable theft and vandalism.
These challenges have prompted the government to invite private sector participation.
Transport Minister Barbara Creecy stated that 11 of the 25 train operating companies that applied for access to the freight network had fulfilled the necessary criteria and would move forward to the next phase of negotiations and contracting, though she did not disclose the names of the firms.
South African logistics company Grindrod confirmed on Friday that it had been granted access to the Transnet network.
Creecy noted that, “The companies are not cannibalising Transnet freight, they are adding capacity to what Transnet freight is already carrying.”
The firms have secured slots across 41 routes, with the initiative focusing on corridors used to transport bulk commodities such as coal, iron ore, chrome, manganese, sugar, and fuel.
According to the Transport Minister, contractual requirements include railway safety certification, readiness of rolling stock, and securing port offloading capacity. Slot durations will vary from one to ten years.
The new operators are expected to transport an additional 20 million tonnes of freight annually beginning in the next financial year, contributing to the government’s target of moving 250 million tonnes by rail each year by 2029, Creecy said.
She added that the operators could increase coal export capacity by 10 million tonnes over the next three years, from current levels of approximately 50 million tonnes.