Private Rail Revolution Begins In Sa With Transnet's Landmark Decision

In a groundbreaking move for South Africas transport sector, private sector participation in the country's rail network is now a reality, thanks to Transnet's publication of the final Rail Network Statement on Friday,

This pivotal development opens the door for private operators to begin utilising Transnet's extensive rail infrastructure, offering much-needed relief for South Africas export challenges caused by deteriorating rail performance.

With minerals and essential goods stuck in transit due to Transnet's struggling rail services, the introduction of private operators is expected to enhance efficiency and address critical bottlenecks in the supply chain. The Network Statement outlines the framework for private entities to operate on the country's rail network, a move that could transform the landscape of South Africas logistics.

Key to the success of this new era of private rail participation is the tariff structure, which had previously sparked concerns in the industry. Transnet's earlier draft proposals, particularly the minimum access fee of 19.79 cents per gross tonne per kilometre, had been met with criticism for potentially making private operators less competitive than road transport. However, the final version of the document has set out a more balanced tariff system, one that logistics expert Jan Havenga has praised as 'exactly correct.'

The new tariff structure features two parts a fixed cost based on train kilometres, and a variable cost linked to the gross tonnes per kilometre. For example, the Iron Ore Corridor will have a charge of 3.42 cents per tonne, along with a fixed cost of R650 per train per kilometre. Meanwhile, the Coal Corridor will see fees of 5.84 cents per tonne and a fixed R250 per train per kilometre. These tariffs, which apply to the current financial year, are set to be updated by the end of March 2025.