South Africa has selected 11 private companies to run freight services on its rail network, a move aimed at easing the logistics bottlenecks that have slowed economic growth.
Transport Minister Barbara Creecy announced the decision on Friday in Pretoria. The companies will now negotiate with Transnet SOC Ltd., the state-owned rail operator, for access to 41 routes and six major corridors that transport coal, chrome, manganese, fuel and other goods. Successful bidders will receive operating licences of up to 10 years once they meet regulatory conditions.
The government has long promised to end Transnet’s monopoly. In December, Transnet published a blueprint outlining how private firms could access the 21,232-kilometre (13,193-mile) network. The plan detailed capacity, pricing, and operating terms and will be updated each year.
The Transnet Rail Infrastructure Manager expects private operators to carry an extra 20 million tonnes of freight annually from the 2026–27 financial year. To reach the national target of moving 250 million tonnes of goods by rail by 2029, Transnet itself must increase haulage by about 70 million tonnes.
While the rail infrastructure will remain in state hands, the government hopes private expertise will improve performance. Years of mismanagement, theft, vandalism and underinvestment have left Transnet struggling. Coal and iron ore exports have dropped to multi-decade lows.
Last year, Transnet admitted it could not raise the funds needed to modernise the system. In response, the government approved 94.8 billion rand ($5.37 billion) in guarantees in July, including 48.6 billion rand to cover debt repayments over the next five years. This followed an additional 51 billion rand guarantee facility granted in May.
Creecy said the rail reform plan also calls for private operators to invest in locomotives and wagons. Both state-owned and private firms will be able to set up rolling-stock leasing companies to support this effort.
“This could be a key intervention for revitalising rolling stock and unlock as much as 100 billion rand in new investments,” Creecy said.
