SOUTH Africa’s minister of transport, Barbara Creecy, has confirmed that 11 out of the 25 private freight operators who have applied for access to Transnet infrastructure have met the necessary requirements and will now procced to the next stage of contract negotiations.
Creecy said that the operators have secured paths on 41 freight routes, targeting bulk flows such as coal, iron ore, chrome, manganese, sugar and fuel. Access rights range in duration from one to 10 years, subject to obtaining safety certification, having suitable rolling stock and securing port capacity for handling export traffic.
The minister did not name the companies concerned. Following the Department of Transport’s media briefing, South African logistics company Grindrod confirmed that it has been awarded third-party access to the Transnet network.
Creecy stressed that the new entrants would not be “cannibalising” existing Transnet traffic, but would provide additional capacity on the national network that in recent years has struggled with rolling stock shortages and an infrastructure maintenance backlog exacerbated by vandalism and cable theft.
From a peak of 226 million tonnes in 2017-18, Transnet’s freight traffic fell to 152 million tonnes in 2023-24. The lack of freight capacity has forced exporters such as Kumba Iron Ore and thermal coal producer Thungela Resources to scale back production.
According to Creecy, new entrants are expected to carry an additional 20 million tonnes a year from 2026-27, contributing to the government objective of moving 250 million tonnes of rail freight a year by 2029. Coal export capacity is expected to increase by 10 million tonnes over the next three years from its current level of 50 million tonnes.
Debt obligations
Meanwhile, the government continues to provide additional guarantees to Transnet to meet its debt obligations. In July it approved an additional Rand 48.6bn ($US 2.75bn) to ensure that all debt redemption will be covered over the next five years, and that Transnet also maintains sufficient liquidity levels.
Considering the impact of the credit downgrades on existing Transnet debt, the government also approved an allocation of Rand 46.2bn to mitigate the risk of the company’s rating being downgraded. According to the Department of Transport, this additional guarantee support for Transnet amounts to Rand 94.8bn.
