Transport Minister Barbara Creecy has welcomed a decisive step toward reform and revitalisation within the country’s freight rail sector, with the announcement of new private entrants onto the Transnet rail network.

Speaking in Pretoria on Friday, Creecy said this was a significant step in the department’s rail reform journey. It would ensure open access to freight rail while retaining state ownership of infrastructure.

“Today’s announcement is not just about the allocation of rail slots, it is a step toward a future where our railways drive economic growth, job creation and sustainability. We will also be incrementally enhancing our regulatory framework to ensure that the slot allocation process is guided by certainty and responsive to our rail reform programme,” Creecy said.

The minister revealed that 11 train operating companies (TOCs) have been conditionally approved to operate on six key corridors, marking the first tangible outcome of the government’s third-party access programme.

The initiative stems from Cabinet’s approval of the National Rail Policy in March 2022, which opened the door for private sector participation on the Transnet network.

The reform was further entrenched in December 2023 when Cabinet adopted the Roadmap for the Freight Logistics System, mandating the Interim Rail Economic Regulatory Capacity to oversee consultations on Transnet’s draft Network Statement.

That statement, published on 20 December last year, outlined the terms and conditions for third-party access, including tariff structures.

Applications for slots opened the same day and closed at the end of February.

According to Creecy, the evaluation process was “rigorous and fully compliant with the principles of fairness and transparency”.

Of the 25 TOCs that applied, 11 have met the required standards and will proceed to negotiations and contracting.

Collectively, they have been granted access to 41 routes across six corridors.

In the North Corridor, six new entrants have been given 15 routes for coal and chrome; in the Iron Ore Corridor, there is one new entrant with one route for iron ore; and in the Cape Corridor, two new entrants have been given two routes for manganese.

In terms of the Northeast Corridor, six new entrants were granted 16 routes covering coal, chrome, magnetite, fuel and containers; in the Central Corridor, one new entrant was granted two routes for coal and manganese; and in the Container Corridor, four new entrants were granted five routes for containers, coal and sugar.

Creecy said these companies were expected to move an additional 20 million tonnes of freight annually from the 2026/27 financial year.

This volume will supplement Transnet Freight Rail’s projections and contribute to the government’s target of transporting 250 million tonnes per year by 2029.

The minister highlighted that the policy framework encouraged rolling stock investment, both by operators and leasing companies, with the potential to unlock as much as R100 billion in new capital flows.

“This will not only revitalise rolling stock but also ensure job retention and create new employment opportunities,” Creecy noted.

Each successful applicant will receive a conditional award letter outlining key compliance requirements.

These include securing permits from the Railway Safety Regulator, ensuring rolling stock readiness, arranging port offloading capacity and addressing other operational prerequisites.

Slot allocations will range from one to 10 years, depending on route and corridor conditions.

Transnet Rail Infrastructure Manager will open applications for ad-hoc slots under the current 2025/26 timetable next week, allowing additional or new routes to be considered.

Meanwhile, the Department of Transport will soon announce the publication date for Volume 4 of the Network Statement, which will cover applications for the 2026/27 timetable.

Creecy emphasised that the government would continue refining its regulatory framework to provide certainty and predictability for both state and private operators.

“We will be incrementally enhancing our regulatory framework to ensure that the slot allocation process is guided by certainty and responsive to our rail reform programme,” she said.

The opening of the rail network to private companies marks a watershed moment in South Africa’s efforts to overhaul its freight logistics system, which has long been hampered by inefficiencies, declining capacity and high costs.

By diversifying operators and enabling competition, the department hopes to lower transport costs, attract new investment and shift more cargo from road to rail, with environmental as well as economic benefits.

The minister outlined the benefits of third-party access including improving utilisation of the network, reducing unit costs by involving more operators, increasing revenue for reinvestment and boosting rail’s competitiveness as an environmentally friendly mode of transport.

The African Rail Industry Association (ARIA) has welcomed the announcment.

“For years we have talked about reform. Today, we can hear it. It is the sound of new wheels on steel, and it is the sound of our economy getting back on track,” ARIA CEO Mesela Nhlapo told Inside Politics.

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Transport Minister Barbara Creecy launched the first phase of the online Request for Information (RFI) platform on Sunday.

It is part of a broader plan to reform and modernise Transnet and the national transport infrastructure while ensuring that core assets remain publicly owned.

Recognising the need for urgent intervention, Creecy announced the development of the Roadmap for The Freight Logistics System, which outlines how strategic infrastructure such as rail lines and ports will remain under public ownership while inviting private sector participation in terminal operations and logistics improvements.

“It will enable us to articulate the challenges in a structured and coherent way, clearly defining their scope, context and impact to inform the development of focused, strategic, and sustainable solutions.

“It will provide a pivotal step forward in our shared commitment to building a 21st-century transport system that goes beyond mobility to strengthen industrial competitiveness, deepen regional integration, and drive inclusive economic growth,” she said.

South Africa’s rail and port infrastructure has faced substantial challenges in recent years, including declining performance, theft, vandalism, under-investment and operational inefficiencies.

Decades of mismanagement, financial constraints and infrastructure degradation have severely impacted South Africa’s rail and port operations.

The inability of Transnet to adequately fund infrastructure improvements has led to a decline in efficiency, hindering trade and economic growth. Theft and vandalism of rail assets have further exacerbated these challenges, which has disrupted operations and leading to significant revenue losses.

Moreover, aging equipment and inefficiencies at ports have driven many businesses to rely more heavily on road transport, increasing congestion and road maintenance costs.

Creecy emphasised that attracting private investment was crucial to upgrading infrastructure to world-class standards.

The RFI aims to gather input from potential investors and stakeholders ahead of issuing formal Requests for Proposals (RFPs) in August 2025.

She said this consultative process would help tailor future projects to market realities, ensuring effective and sustainable solutions.

The government has identified several critical freight corridors for potential private sector investment.

The Northern Cape to Saldanha Bulk Minerals corridor, which focuses on iron ore and manganese exports, will encompass pit-to-port rail, port and terminal infrastructure improvements.

Limpopo and Mpumalanga to Richards Bay Bulk Minerals corridor initiative, targeting coal and chrome exports, will improve rail connectivity from major mining regions to the Port of Richards Bay.

The inter-modal supply chain project is designed to enhance container and automotive sector logistics, including the development of a South African port system as a regional transshipment hub.

Creecy said these projects were expected to increase efficiency, reduce transport costs and strengthen South Africa’s role in global trade.

While private sector participation presents opportunities, several obstacles remain, including regulatory uncertainty, security concerns, job security for Transnet employees and the impact of the public-private balance.

To facilitate private sector participation, the government has established a Private Sector Participation Unit, housed within the Development Bank of Southern Africa.

This unit will oversee project structuring and procurement, ensuring alignment with policy frameworks such as the 2022 White Paper on National Rail Policy and the 2023 Private Sector Participation Framework.

Furthermore, immediate rehabilitation efforts are underway, with Independent Technical Assessments to be conducted for key export rail corridors, and funding sources have been identified, including Transnet’s internal budget for maintenance and equipment purchases, National Treasury’s Budget Facility for infrastructure and private investment under existing customer agreements.

Creecy said her department’s efforts to engage the private sector in rail and port infrastructure development marked a significant step toward revitalising the country’s freight logistics system, and by balancing public ownership with strategic private investment, the administration aimed to enhance efficiency, drive economic growth and ensure long-term sustainability.

She said the success of these initiatives depended on effective collaboration between government entities, investors, labor unions and the broader business community, and that the nation’s ability to modernise its transport sector would be critical in positioning itself as a competitive player in global trade.

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