Edition October 2025

South Africa’s freight rail sector has long been under strain. Declining volumes, network inefficiencies and mounting costs have weighed heavily on logistics and the wider economy. Now, with the recent completion of Transnet’s first slot allocation process, a decisive step has been taken to change the trajectory of the sector.  

This comes after the parastatal, in September, granted 11 new train operating companies (TOCs) access to 41 routes across six key corridors. The development is not only expected to bring new players onto the rails but also signals the operationalisation of a major policy reform: open access.

For Transnet Rail Infrastructure Manager (TRIM), which oversees the process, this milestone is more than administrative.  

In an interview with Public Sector Manager (PSM) magazine, TRIM Chief Executive Officer (CEO) Moshe Motlohi, described the process as “a significant moment in the transformation of South Africa’s rail sector”. He believes it gives practical effect to the core principle of the National Rail Policy, shifting the industry toward competition, efficiency and private-sector participation.  

“This development will drive efficiency, increase rail utilisation and unlock private sector investment, ensuring that rail becomes a competitive and reliable mode of freight transport,” he says. It is, in his view, a foundational step towards building a system that “supports economic growth, industrial development, and logistics resilience”.

The process

The allocation of slots is based on a thorough process that weighed the readiness and capacity of applicants. Of the 25 companies that applied, 11 met the stringent requirements. Motlohi emphasises that the selection was guided by transparency and rigour. “The initial allocation of the TOCs across the six key corridors and 41 routes was based on routes that the companies applied for and available capacity on the network,” he explains.  

Applications were assessed on criteria such as operational readiness, financial capacity, compliance with Railway Safety Regulator (RSR) requirements and alignment with corridor-specific freight profiles. The operators chosen, he says, “demonstrated the ability to complement Transnet’s existing operations, enhance service coverage and contribute to long-term corridor viability”.

The North and Northeast Corridors emerged as especially critical in this first phase. These routes carry high volumes of coal, chrome, magnetite, fuel and containers – commodities central to both local industries and export markets. Motlohi points out that they “link key mining and industrial regions to ports and domestic markets.” By improving efficiency along these stretches, he argues, South Africa can gain significantly in export competitiveness, supply chain reliability and job creation across the value chain.

Reducing pressure on roads

The broader goal is clear: Increase freight carried by rail and reduce pressure on the country’s roads. South Africa has set itself the ambitious target of moving 250 million tonnes of cargo by rail annually by 2029. According to TRIM, the inclusion of new operators could contribute an additional 20 million tonnes a year from the 2026/27 financial year. That boost, however, comes with challenges. “Significant investments in network rehabilitation and maintenance, train signalling systems and curbing theft and vandalism are required to achieve this target,” Motlohi says.

TRIM has already allocated funds within its five-year capital investment plan to ensure a safe and reliable rail network. This includes upgrading critical infrastructure and working with law enforcement to reduce theft and vandalism. Collaboration with the private sector is also a priority, both to secure financing and to draw on global expertise. Motlohi sees this as essential: South Africa must “access world-class practices to address these challenges”.

Creating competition  

While infrastructure upgrades are fundamental, so too is the role of competition in reshaping the system. For the first time, multiple operators will run on the same network, and Motlohi expects this to bring a different dynamic.

“Opening the network to third-party operators fosters a more competitive environment, driving innovation and service improvement,” he says. Customers, he believes, stand to benefit from reduced lead times, improved service options and a shift from road to rail that could lower logistics costs. The environmental impact will also be positive, with rail offering a more sustainable alternative to road freight.

Revenue generation

Financial sustainabilityunderpins this vision. Access fees and increased volumes are expected to generate new revenue streams, which will be ploughed back into the network. “Our investment priorities include the upgrading of ageing infrastructure, digital signalling and optimising yard operations,” Motlohi explains.  

TRIM’s role as an independent infrastructure manager is critical to making open access work. Its mandate, Motlohi notes, is to ensure non-discriminatory access as required by the National Rail Policy and the Economic Regulation of Transport Act of 2024. “We have implemented robust scheduling protocols and capacity allocation frameworks,” he says. TRIM also oversees safety, ensuring that all operators meet RSR compliance requirements.

Modernise rail transport

This reform is not happening in isolation. It forms part of Transnet’s broader transformation into what Motlohi describes as “a modern, agile, and customer-focused organisation.” For decades, Transnet operated as a vertically integrated monopoly. Today, it is repositioning itself as an infrastructure custodian, enabling multi-operator participation. “We are evolving from a vertically integrated operator to an infrastructure custodian,” he stresses. This represents a fundamental cultural and structural shift; one that places service delivery, efficiency and competition at the heart of rail operations.

A new chapter  

For Motlohi, the entry of new operators and the reforms under way signal the beginning of a new chapter. The rail system is not yet where it needs to be, and challenges such as infrastructure rehabilitation, crime and funding persists. But with open access now in motion, a framework has been established to build on. It is a framework designed to revitalise rail, ease pressure on roads, attract investment and ultimately underpin South Africa’s wider economic ambitions.

“The announcement of new TOCs,” Motlohi says, “marks a significant moment.” It is not just about slots, routes or corridors but about the promise of a system that can once again serve as a backbone of industrial development and logistics resilience.