SA Needs Full Concessioning of Transnet Freight Rail Network

Statement by S’bongiseni Vilakazi MP – DA Deputy Spokesperson on Transport:

The Democratic Alliance (DA) will write to Minister of Transport Barbara Creecy urging government to move beyond the limited opening of Transnet’s freight rail network and instead pursue the full concessioning of key freight rail corridors to private operators.

While the DA welcomes the announcement that 11 private companies will be permitted to operate on Transnet’s freight rail network, this intervention does not go far enough, nor does it move fast enough to address South Africa’s logistics crisis.

Allowing private trains onto Transnet’s old and failing infrastructure is not the same as introducing genuine competition into the rail sector. South Africa requires privately concessioned management, maintenance, and operation of freight rail lines themselves; not merely limited access to a collapsing state-run network.

The 11 approved operators are expected to add approximately 24 megatonnes of freight capacity over the next year. Yet Transnet itself has set a target of 250 megatonnes by 2030, meaning that only around 10% of future freight capacity is currently being opened to private participation.

This is wholly insufficient.

President Cyril Ramaphosa himself has repeatedly acknowledged the need for faster private sector participation in rail. However, maintaining Transnet’s dominant position will simply perpetuate the delays, inefficiencies, lack of capacity, and operational failures that continue to cost the South African economy billions of rand every year.

The urgency of reform is amplified by favourable global commodity prices currently benefiting South African exporters. Every month of delay means lost export earnings, reduced economic growth, and lower tax revenues for the fiscus.

The DA therefore believes Minister Creecy must urgently expand reform beyond train operations and concession the operation and maintenance of strategic freight corridors to capable private sector partners. The private sector can provide the capital investment, technical expertise, and operational efficiencies that Transnet has consistently failed to deliver.

Transnet is being kept afloat by the fiscus, including government guarantees amounting to R95 billion over the past year. At the same time, the rehabilitation of critical export corridors such as the Northern Corridor and Iron Ore lines continues to rely on further state bailouts instead of bringing private sector partners on board to improve performance and lower costs.

South African exporters already face an increasingly difficult global trading environment. We cannot continue creating additional domestic obstacles through failing logistics infrastructure.

If South Africa is serious about becoming globally competitive, it requires a world-class freight rail and logistics system. That future will not be achieved by preserving Transnet’s monopoly, but by embracing meaningful private sector participation and competition across the entire rail network.