As rail reforms continue to take shape in South Africa, particularly with Transnet having published a Network Statement paving the way for private operators in December last year, Transport Minister Barbara Creecy recognises that logistics remains a binding constraint on economic growth and job creation.

She addressed delegates in a keynote address at the Africa Rail 2025 conference, in Gauteng, on May 13, confirming that the rail network would ultimately remain State-owned to control pricing in a favourable manner.

The Department of Transport is working on a Rail Masterplan as an evidence-based framework that will be published for public comment later this year.

The masterplan will outline the developments in freight and passenger rail planned from now until 2050, particularly as more stakeholders opt for rail as a more environment-friendly and cost-effective mode of transportation.

Additionally, Creecy confirmed that rail access tariffs and a Network Statement for 2025/26 were being drafted, as well as a request for information (RFI) for passenger rail, which would be released in coming weeks.

This while an RFI remains open until the end of May to private-sector companies with suggestions on how Transnet could go about enabling business for private-sector operators and guiding bids in particular in the freight rail segment.  

Creecy reiterated at the conference how rail had a vital role to play in the development of the African continent.

“By maintaining and expanding our rail networks we can better connect and integrate our nations across the continent.

“The Southern African Development Community has a combined rail network of more than 40 000 km, excluding branch lines. This demonstrates the vast expanse of our railway infrastructure and why it must be positioned at the centre of an efficient passenger and freight transport system for the region,” she emphasised.

Creecy also mentioned a focus on more effectively migrating freight from road to rail could harness the region’s economic potential and ensure that the objectives of policies such as the African Continental Free Trade Area could be realised.

In this regard, the Minister added, it was important to note the significance of the African Union Resolution of 2016/17 declaring South Africa as a hub of rail manufacturing in Africa, thereby keeping manufacturing of rail and components within the continent.

Effective earlier this month, South Africa ratified the Luxembourg Rail Protocol which creates a new global legal system for the recognition and prioritisation of three types of security interests held by creditors in railway rolling stock. South Africa is currently among the few countries in the world that has ratified this protocol.

“The ratification of the protocol is an essential part of the rail open access strategy of our government, which will open international financing possibilities to new market entrants and allow government to garner cheaper financing for rolling stock,” Creecy explained.

She highlighted that Africa Rail 2025 was hosted at a significant moment in the history of rail transport in South Africa, citing the massive rail reform programme that had been under way.

“Inefficiencies and widespread theft and vandalism of rail infrastructure threatens South Africa’s economic opportunities when growth and job creation are so desperately needed. This combined with a logistics crisis in 2023 compelled us to embark on a programme of ambitious reform,” she stated.

As a case in point, Transnet group chief business development officer Yolisa Kani confirmed that efforts were under way to establish a rolling stock leasing company, called LeaseCo, which aimed to attract private investment and address years of operational challenges that had hampered economic growth in South Africa.

The LeaseCo will diversify and grow Transnet’s revenue by using currently underused assets and leveraging private-sector capital, as well as make rolling stock readily available to new train operators on the network.

Kani stressed, however, the critical reliance of LeaseCo on a functioning logistics ecosystem, given the historical underperformance of ports and rail in the country. She assured conference delegates that safeguards were in place to prevent LeaseCo from becoming another monopolised and politically connected entity.

Rather, she said Transnet aimed to build an equitable and solid rolling stock leasing company that could level the playing field and drive the revitalisation of the freight rail system.