Transnet Infrastructure Manager (TRIM) aims to open new rail corridors for third-party access at the end of the month by the beginning of the 2025/26 financial year as it prepares for the implementation of private enterprise rail freight.
The acting CEO of TRIM, Moshe Motlohi, says it is full steam ahead with its mandate to implement the new system on Transnet’s 21,232km rail network.
Third-party access marks the end of the TFR monopoly and builds on the government’s reform agenda to address the underperformance of the rail network, which has been plagued by underinvestment, theft and vandalism.
TRIM is giving the third-party programme its “best shot” with the aim of bringing cargo from road back to rail, Motlohi told Business Times.
He said that at the end of January Transnet would announce more lines that will be open for use by the private sector.
“If any aspiring train operator feels there is a corridor that has not been mentioned they can talk to us,” he said.
Would-be third-party participants have until February 7 to apply for slots on TFR corridor — excluding the north corridor — in phase 1, which opened in line with the network statement, published in December. TRIM has allocated 2.1Mt of capacity for third parties in this phase.
We hope that is going to be the start of this journey where we are going to have a mix of operators who are going to serve SA Inc
— Moshe Motlohi, acting CEO of Transnet Infrastructure Manager
“We are opening up opportunities for people who want to be in the space to put in the applications. We hope that is going to be the start of this journey where we are going to have a mix of operators who are going to serve SA Inc,” said Motlohi.
He said TRIM, which has promised to process applications within a 60-day adjudication period, will stick to its timelines.
Third-party operators are likely to have been encouraged by the new tariffs, which are considered lower after complaints that those published in March last year were too high.
Motlohi said the tariff regime was fair given that there was no flat rate and diesel operators would not have to pay for access to electricity. “If somebody brings a diesel train, why should they pay for electricity? Those are the positive features that make me confident that people will put in their bids,” he said.
The latest network statement in December adopted differentiated rates that take into account such factors as gross tonne kilometres, a calculation based on the total mass of a train multiplied by the distance travelled.
James Holley, CEO of private rail operator Traxtion, said the access charges paid by private operators will generate a significant new revenue stream for Transnet, improving its financial position.
“It is extremely encouraging that the rates for all operators, Transnet and private operators — a contentious point when the first draft of the network statement was released for comment — have been significantly reduced, and the proposed single network-wide access tariff has also been replaced by a multi-tiered tariff, which is aligned with international best practice,” he said.
Motlohi said the heavy-haul export line between Ermelo-South and Richards Bay, part of the North Corridor, does not have the capacity for third-party access in the short term.
“The others have one train a week that has been depicted, and those corridors will give us 2.1Mt an annum. There is encouraging growth on that [heavy-haul] corridor, we are getting closer to meet the requirements of customers,” he said.
TFR is performing below its nameplate capacity with rail freight volumes declining to 152Mt in financial 2024 from 226Mt six years earlier. Motlohi said Transnet would still struggle financially despite the extra income from third-party access.
“The main challenge is we don’t have all the money we need to recover the network because this neglect has not happened over a short period of time, it has come over many years,” he said.
“Besides that, there have been other challenges, for example in KwaZulu-Natal last year we had floods and in the previous year we had floods, and our infrastructure has not been spared the impact of those floods. We are still trying to recover some of it,” he said.
Motlohi joined Transnet in 2003 and held various roles, including leading the transformation of Transnet Port Terminals.
He said no-one needed to be worried about private sector participation in freight rail, given that the ports have already followed this route.
“There should not be anxiety, we are here to make sure South Africa must work, our customers must be happy, and Transnet should be OK.
“We have gone through rounds of concessions at the ports bringing in new terminal operators and we have the highest number of concessions in KwaZulu-Natal.”
He said TRIM needed to make communities understand it is not a good idea to build houses next to railway lines.
“When we have floods, people get flooded when they have built in wrong areas. We have to make communities understand there is a reason why there is a buffer of land between a railway line and people.”
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