The proposed leasing company, known as LeaseCo, is expected to play a central role in revitalising South Africa’s freight rail sector by acquiring, managing and leasing rolling stock to domestic and regional customers.
Image: File
State-owned freight and logistics company Transnet has reached a major milestone in South Africa’s rail reform programme with the issuance of a Request for Proposals (RFP) for a new rolling stock leasing company aimed at expanding access to locomotives and wagons for rail operators.
The RFP follows the successful completion of a Request for Qualification (RFQ) process launched in April 2025, which attracted 14 submissions from interested parties. Following the evaluation process, Transnet shortlisted two preferred bidders that will now participate in the next phase of the procurement process.
The proposed leasing company, known as LeaseCo, is expected to play a central role in revitalising South Africa’s freight rail sector by acquiring, managing and leasing rolling stock to domestic and regional customers.
Transnet on Monday said the initiative addresses one of the most significant constraints facing the rail industry – limited access to reliable rolling stock.
“The establishment of LeaseCo is a cornerstone of South Africa’s rail reform agenda. It is designed to modernise freight rail operations, attract private sector investment, and create opportunities for broader participation in rail operations,” Transnet said.
“By improving asset utilisation and expanding access to rolling stock, LeaseCo will support both established and emerging Train Operating Companies (TOCs), helping to unlock economic growth and strengthen supply chains across the region,”added Transnet.
The leasing company will operate as an independently governed and commercially viable entity.
Under the proposed structure, Transnet will contribute a ring-fenced fleet of rolling stock assets as equity and provide original equipment manufacturer capabilities through its engineering division, Transnet Engineering.
The private sector majority shareholder will be responsible for injecting capital and bringing technical expertise and operational capabilities needed to rehabilitate, manage and expand the fleet.
Transnet Group CEO, Michelle Phillips said strong demand for freight rail services made the project an attractive investment opportunity.
“Significant unmet freight demand, driven by a shortage of available rolling stock, presents a compelling opportunity for a dedicated leasing entity,” Phillips said.
“LeaseCo represents a transformative initiative primed to modernise Africa’s rail system, mobilise private capital, and enhance the reliability of freight logistics. With the significant demand from TOCs, LeaseCo is well positioned as an appealing investment opportunity.”
Transnet said it has already engaged newly licensed train operators to assess market demand and has secured five TOCs interested in LeaseCo’s services.
“Initial engagements point to a strong market appetite, which is expected to grow as the Transnet Rail Infrastructure Manager (TRIM) allocates additional network slots to operators.”
According to Transnet, the issuance of the RFP marks another important step towards building a more competitive, inclusive, and efficient rail ecosystem that supports economic growth, improves logistics performance, and positions rail as a catalyst for South Africa’s competitiveness and regional development.
The announcement comes shortly after TRIM launched another private-sector participation initiative through a Request for Proposals for Phase One of its Station Leasing Programme in the Western Cape.
The programme covers the Dal Josafat, Huguenot and Bitterfontein station facilities and invites investors to lease, develop, operate and maintain station precinct assets for a minimum period of 10 years.
TRIM CEO, Moshe Motlohi, said that the programme demonstrates their continued commitment to transparent, market-based access to strategic rail assets.
“Through private sector participation, we aim to strengthen partnerships, improve our service delivery and unlock long-term economic value across the South African rail network,” he said.
BUSINESS REPORT