On Monday 20th January 2025, on the day of his inauguration, US President Donald Trump signed an...
SA's Private Train Operating Companies are Invited to the TRIM Party
South Africa currently has a little over 23 000 kms of rail track in place, accounting for as much as 85% of the African continent’s total rail network. South Africa’s rail demand is largely based on the continent’s biggest coal, iron ore, chrome and manganese industries as well as the very busy container line that runs between the country’s biggest port, Durban, and its commercial hub of Johannesburg.
Unfortunately, this state-owned and managed national asset has been much abused, neglected and mismanaged by incumbent SOE Transnet over the past 30 years. In the past five years alone, total goods transported on the network annually has fallen from 226 million tons to 150 million tons, as commodity owners have increasingly resorted to road transport, which is cheaper, quicker and more reliable. This ongoing migration has put significant excess strain on South Africa’s excellent national road network and has deprived commodity owners of transport options, keener pricing and environmentally friendlier solutions.
In an effort to resuscitate the country’s ailing rail industry and reverse its continual decline, the SA government (spearheaded by the office of the South Africa President Cyril Ramaphosa) formulated and published a new plan known as the Freight Logistics Roadmap in 2023. One of the major tenets of the plan was the active encouragement of private company participation in a clear-cut move away from a purely state-owned operating model. This aspect was to be more specifically detailed in a document entitled the Network Statement, initially expected in the first half of 2024. Inevitable delays followed and the statement was finally published in December 2024.
In line with the Network Statement, South Africa’s recently established Transport Rail Infrastructure Manager (TRIM) is gearing up for the allocation of the first route schedules to participating private train operating companies.
The Network Statement also includes a new tariff structure that is decidedly more attractive to potential Train Operating Companies (TOCs) than the allowable-revenue pricing model outlined in the preliminary draft. It provides the initial framework and pricing for the integration of third-party operators.
TRIM interim CE Moshe Motlohi says applications by private rail operating companies for the first slots must be submitted by 7th February 2025, followed by a 60-day adjudication period, after which preferred bidders will be announced. The initial tender process is only for the rail transport of a modest 2,4 million tons of commodities across five operational rail corridors.
This is very good news for the South African freight and logistics industries, and for commodity owners and represents a significant step forward in the resuscitation of a highly valuable national asset that could have profound long term effects on the South African economy. Actions speak louder than words and the publication of Network Statement is to be hailed in this regard.