South Africa has announced plans to open its freight rail network to private operators, aiming to boost efficiency as state-owned Transnet grapples with persistent bottlenecks. Transnet, responsible for the country’s rail and port services, has long faced challenges including equipment shortages, delayed maintenance, and widespread cable theft, prompting calls for increased private sector involvement, according to Reuters.

Transport Minister Barbara Creecy revealed that 11 of the 25 applicants have qualified to move forward to the negotiation and contracting stage, though their identities remain undisclosed. Logistics firm Grindrod confirmed it has secured access. The move is not intended to replace Transnet Freight Rail but to supplement its operations, providing additional capacity to the volumes already handled by the state operator.

Transnet’s freight volumes have declined sharply, dropping to 152 million metric tons in 2023/24 from a peak of 226 million in 2017/18. The inclusion of private operators is expected to add roughly 20 million tons annually, helping the network reach 250 million tons by 2029. These operators have been allocated slots across 41 routes, primarily handling bulk commodities such as coal, iron ore, chrome, manganese, sugar, and fuel. Contracts will span between one and ten years and require compliance with safety regulations, appropriate rolling stock, and port access.

To support Transnet’s turnaround, the government has already extended 149 billion rand ($8.4 billion) in guarantees and the company is seeking an additional 35 billion rand in infrastructure funding this year. This initiative represents a major step toward modernizing South Africa’s freight rail system and addressing long-standing inefficiencies.