The African Rail Industry Association (ARIA) has welcomed the announcement of the vertical separation of Transnet Freight Rail into two distinct operating divisions – Transnet Infrastructure Manager (TRIM) and Transnet Freight Rail (TFR).

“This strategic unbundling represents a pivotal moment for the advancement of South Africa’s rail industry and reflects a forward-looking vision for the sector’s growth,” the association says in a statement.

In alignment with the National Rail Policy, this separation is a critical step toward strengthening the economic sustainability of the rail network, it posits.

It anticipates that this will enhance operational efficiencies, facilitate increased private-sector participation and catalyse investment in South Africa’s rail infrastructure.

“This approach underscores the country’s commitment to modernising and expanding the rail sector to better meet the demands of a growing economy,” the association avers.

It highlights that a revitalised rail network will boost economic development, attract new investments and create considerable employment opportunities.

The ARIA notes that, to fully realise the potential of South Africa's rail network, considerable private-sector investment is required. An estimated R220-billion will be needed to modernise and upgrade the network, ensuring its pivotal role in supporting the national economy.

The unbundling of Transnet is also part of a broader strategy linked to the R47-billion guarantee facility provided by the National Treasury, aimed at supporting Transnet’s turnaround efforts, the association points out.

The establishment of TRIM as an independent infrastructure manager is expected to create a more competitive and collaborative environment between public and private operators, further driving innovation within the sector, it avers.

Transnet aims to increase its rail haulage capacity to 170-million tonnes for the 2024/25 financial year, building on the 152-million tonnes transported last year.

This goal aligns with the government's second-phase partnership with business, where the target has been raised to 193-million tonnes a year. Achieving this target will require close collaboration between public- and private-sector stakeholders, the association emphasises.

The ARIA says it firmly believes the separation of infrastructure management from rail operations will lead to increased efficiency and competition, benefiting the entire rail industry.

The organisation adds that it remains committed to working alongside Transnet and other industry partners to ensure the successful implementation of these reforms.