The move marks a significant step toward opening South Africa’s rail sector to greater private sector participation, a long-anticipated reform aimed at improving efficiency, boosting capacity, and addressing long-standing logistical bottlenecks that have constrained economic growth.
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Transnet Group CEO Michelle Phillips has announced a major shift in South Africa’s freight rail strategy, revealing that private train operating companies will soon be allowed onto the national rail network for the first time in the entity’s history.
The reforms come at a critical time for South Africa’s economy, as inefficient logistics systems have been widely cited as a major constraint on growth, particularly in mining and manufacturing sectors that rely heavily on rail to move bulk goods.
By opening up the rail network and inviting long-term private investment, Transnet is aiming to reverse years of underperformance and position the country’s logistics infrastructure as a driver of economic recovery.
Speaking at the Gauteng Investment Conference on Thursday, Phillips said the reforms are progressing rapidly, with key milestones expected within months as Transnet accelerates efforts to modernise and stabilise its operations.
“You know that we are working quite fast to implement the reforms,” she said. “By April of this year, we are hoping to announce the new private train operating companies who will now be introduced onto the Transnet network. It’s history making. It’s the first time that we’ve done this since our existence.”
The move marks a significant step toward opening South Africa’s rail sector to greater private sector participation, a long-anticipated reform aimed at improving efficiency, boosting capacity, and addressing long-standing logistical bottlenecks that have constrained economic growth.
Transnet is already actively involving private operators to boost port efficiencies and capacity, targeting key projects like the Durban Container Terminal (DCT) Pier 2 partnership with ICTSI and a new LPG terminal.
Phillips said the introduction of private operators on rail will allow companies to transport their own commodities on the rail network, easing pressure on Transnet while creating new opportunities for investment and competition.
“It’s very good that we’ve got private operators who will be able to also move commodities on the rail network,” she said.
Transnet currently moves nearly 170 million tons of rail freight and aims to transport 250 million tons by 2029, facilitated by the Transnet Rail Infrastructure Manager opening the rail network to broader access.
In addition to opening access to rail operators, Transnet is preparing to bring major infrastructure projects to market through concession models. Chief among these is the container corridor, a critical logistics route that will be offered to the private sector under a long-term agreement.
“Container corridor, we will be putting that to market for a concession — a 25-year concession to the private sector,” Phillips said. “Again, we need them to participate meaningfully by quarter three of this financial year. We need that out in the market.”
The concession is expected to attract significant private investment into one of the country’s most important freight routes, potentially improving port and rail integration while enhancing export competitiveness.
Recently, the industry launched the Container User Forum in a bid to strengthen coordination and improve the efficiency of the container logistics system in South Africa and the broader Southern African region. The Forum was created as an industry-led platform aimed at improving collaboration among stakeholders across the container value chain and addressing long-standing operational challenges.
Phillips also highlighted ongoing structural reforms within Transnet, including the separation of infrastructure management from train operations, a model widely used in global rail systems to promote efficiency and fair access.
“Infrastructure manager will be putting out for how things specifically, we have 36 signings that will require operators,” she said. “So, we would need them to again, when this goes to the market, to participate.”
This unbundling process is designed to create a more transparent and accessible rail system, where multiple operators can utilise shared infrastructure under regulated conditions.
Phillips made a direct appeal to the private sector, urging businesses and financiers to engage actively as these opportunities are rolled out.
“I’m sure the funders would be waiting, ready for whomever wants to come and engage them for funding to be able to do this work,” she said.
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