In a key step towards opening up South Africa’s rail network to private operators and transforming the rail sector, Transnet has completed a review process to select a new Train Operating Company (TOC).
The participation of private operators will go a long way in increasing Transnet’s rail volumes, helping producers in the mining and agricultural sectors meet rail freight volume expectations for exporters, and facilitating upgrades to rail infrastructure.
Transport Minister Barbara Creasy briefed the media on the outcome of the application process for third party participation in the Transnet rail network and said the Transnet Rail Infrastructure Manager (TRIM) estimates the new TOC will transport an additional 20 million tonnes of freight per year from the 2026/27 financial year.
“This will complement Transnet Freight Rail’s (TFR) forecast volumes and contribute to the Government’s aim to increase rail freight to 250 million tonnes per year by 2029.”
“The evaluation process was rigorous and conducted in full compliance with standards of fairness and transparency. Today’s announcement is not just about the allocation of rail slots; it is a step towards a future where our railways drive economic growth, job creation and sustainability,” Creecy said in Pretoria on Friday.
Of the 25 TOC applications received, 11 met the necessary requirements and will proceed to the next stage of negotiation and contracting.
Initial allocations for a total of 41 routes and six corridors are as follows:
Northern Corridor: 6 new entrants, 15 routes for the transport of coal and chrome. Iron Ore Corridor: 1 new entrant, 1 iron ore transport route. Cape Corridor: Two newcomers, two routes for manganese transport. Northeast Corridor: 6 new entrants, 16 routes for the transport of coal, chromium, magnetite, fuel and containers. Central Corridor: 1 new entrant, 2 routes for transporting coal and containers (manganese). Container Corridor: 4 new entrants, 5 routes for transporting containers, coal and sugar.
The benefits of third-party access include improved network utilization and improved rail efficiency. Reduce network unit costs by involving more operators. It increases revenues and contributes to investments in network maintenance and modernization, reduces external costs of freight logistics and improves the competitiveness of railways as a greener mode of transport.
“Qualified new entrants will receive a conditional award letter outlining award conditions, including the need to complete a Rail Safety Regulatory Authority (RSR) permit application, vehicle preparation, securing port unloading capacity and other operational processes.
“The period of the allocation ranges from one to 10 years and the operating companies can start operations once the relevant conditions are met,” the minister said.
In March 2022, the Cabinet approved the National Railway Policy. This lays the foundation for third party participation in the Transnet network, while the infrastructure remains state-owned.
“Rail policy encourages fleet investment by operating companies and the creation of vehicle leasing companies by both state-owned enterprises and private entities. This will be an important intervention to revitalize the fleet and could unlock as much as R100 billion in new investment.”
“Rail policy promotes structural reforms that enable private sector investment, optimal use of the rail network, effective economic regulation that promotes fair access to the rail network and ensures that the rail network is well managed,” Creecy said.
The South African Freight Logistics System Roadmap was approved by Cabinet on 8 December 2023.
The document empowered the Interim Railway Economic Regulatory Capacity (IRERC) to manage the consultation process on Transnet’s draft network statement.
“The Network Statement serves as a foundation document outlining the conditions under which operators can access the rail network, thereby influencing third party access and enabling private sector participation.
“The first network statement and pricing decisions were published on December 20, 2024. After the network statement was published in December 2024, the application process for slots started immediately. Applications opened on December 20, 2024 and closed on February 27, 2025,” the minister said.
TRIM will open applications on its website next week for organizations wishing to submit ad hoc applications for additional or new route allocations for the current 2025/26 timetable period under Network Statement Volume 3.
“In due course, the Department for Transport will announce the publication date of Volume 4 of the Network Statement and when it will begin accepting applications for slots in the 2026/27 timetable.
“We will also gradually strengthen the regulatory framework to ensure that the slot allocation process is guided and responsive to our rail reform programme,” Creecy said. -SAnews.gov.za
