South Africa allows private operators onto freight rail network
Rail and port inefficiencies cost the economy more than US$50m a day
South Africa’s state-owned freight rail network is being opened up to private train operators. The step is aimed at improving efficiency as Transnet, the struggling state logistics group, battles equipment shortages, ageing infrastructure and rampant cable theft from its power and signalling systems.
The government approved a National Rail Policy in 2022, laying the groundwork for third-party access while keeping the rail infrastructure under state ownership. Officials say that opening the system to multiple players will improve overall utilisation of the rail infrastructure and drive down network unit costs. The additional income is expected to be channelled into maintenance and the modernisation of an outdated network.
The first application window for rail slots closed at the end of February this year. Of the 25 companies that applied, 11 met the required criteria and will now proceed to the next stage of negotiations and contracting. They secured slots across 41 routes, mainly those used to haul bulk commodities such as coal, iron ore, chrome, manganese, sugar and fuel. Further slots are expected to be allocated in future rounds.
Transnet’s freight rail volumes fell to 152m tonnes in the 2024 financial year, down from a high of 226m tonnes in 2018. The government expects the new entrants to add about 20m tonnes of freight annually, helping to advance its target of transporting 250m tonnes of cargo by rail by 2029.
Chronic inefficiencies at Transnet’s rail network and ports are estimated to cost the economy more than US$50m a day. Mining companies have been hit particularly hard: exporters such as Kumba Iron Ore and coal producer Thungela Resources have had to scale back output to match Transnet’s limited capacity.
References
'South Africa’s struggling state logistics company is strangling the economy', Semafor, 26 September 2023
'South Africa opens freight rail network to private firms', Reuters, 22 August 2025
'Announcement of the outcome of Transnet's slot application process', Transport Ministry Republic of South Africa, 22 August 2025
'South Africa’s freight sector opens up to private firms', Semafor, 25 August 2025
'Creecy’s rail move allows track access for private operators, but maintains Transnet’s monopoly on operations', Democratic Alliance, 25 August 2025
'South Africa’s rail revival: new operators, old problems', Daily Maverick, 26 August 2025
