The world’s biggest container shipping operator — MSC — is one of the 10 private companies that have been provisionally granted slots to operate on South Africa’s rail network, Business Times can reveal today.
Port and logistics company Grindrod and Menar — a diversified miner with coal interests — have already announced they are among those chosen to operate alongside Transnet Freight Rail (TFR), but Business Times can report today that the others are Minrail Solutions, African Railway Co, Motheo Africa Logistics, Interlinks, New Cape Rail, Barberry & Tsiko and Eracema.
Transport minister Barbara Creecy said last week the private train operating companies (TOCs) had been chosen, a major step in the shake-up of South Africa’s logistics network. Over the past decade or more rail volumes have plummeted due to underinvestment in infrastructure, shortage of rolling stock, theft and vandalism.
Creecy said the operators — which she did not name — had been selected from 25 applicants and would go through to the next phase, when their ability to meet the conditions would be thoroughly assessed.
The plan is to grant the TOCs rights to operate on 41 routes across Transnet’s six corridors for up to 10 years.
Business Times sought comment from all the successful companies, but most had not responded in time for publication.
Minrail Solutions, however, confirmed it was one of the TOCs adjudged to meet the initial requirements. It has been granted conditional access to compete with TFR on the 861km ore corridor between Sishen in the Northern Cape and Saldhana in the Western Cape.
Director and CEO Lindsay Baatjies said Minrail Solutions was established in 2022 to provide junior miners in the Northern Cape with a cost-effective solution for bringing their ore to market.
He said its technical partner is Global Railway Engineering (GRE), which has intellectual property and design rights for the HS Scheffel bogie, a self-steering railway wheel system developed in South Africa.
“This innovation has saved the country millions in infrastructure costs and is also an export earner. GRE has an engineering design studio in Kempton Park and operates a heavy engineering works facility in Vanderbijlpark,” said Baatjies.
“Minrail remains open for business to assist other successful operators in designing and manufacturing their rolling stock requirements”.
Baatjies said Minrail has the option of leasing its own rolling stock and has the backing of local financial institutions.
Minrail Solutions has secured finance from local banks, allowing us to build our own wagons when the timing is right
— Lindsay Baatjies, Minrail Solutions director and CEO
“Minrail Solutions has secured finance from local banks, allowing us to build our own wagons when the timing is right. We are in ongoing discussions with TRIM (Transnet Infrastructure Manager) regarding the optimal commencement date.”
Vuslat Bayoglu, MD of Menar, said: “We are grateful for the access because it will enable us to start new mines and create much-needed jobs.”
Bayoglu said Menar’s newly established ferromanganese business, Khwelamet, should now be able to send manganese ore from the Northern Cape to its industrial complex in Meyerton, Gauteng, for beneficiation.
He said an additional allocation had been made to move manganese alloys from Meyerton to Durban port, which was good news for Khwelamet’s plans to restart operations at the smelter complex previously owned by Samancor Manganese.
“The smelter complex has been under care and maintenance for a few years. By granting rail access to move raw manganese ore from the mine to the processing site, TRIM has boosted confidence in Khwelamet, which is an important part of reindustrialisation.
“We have always believed that an efficient logistics system is an enabler of economic development. We look forward to working with TRIM to make sure the ongoing reforms bear the desired outcomes,” Bayoglu said.
Brendon Hubbard, an investment manager at ClucasGray, said that apart from TFR, the only company among the 11 that had locomotives ready to move freight “tomorrow” was Grindrod.
“They have train drivers, they have licences, they are ... ahead of other parties in terms of the ability to move,” he said.
Other successful private train operators would have to wait up to three years and splurge millions of dollars to acquire new locomotives, if that is how they planned to proceed.
“You are in the queue between 24 and 36 months to order one locomotive at $3m (about R50m), depending on the size of the locomotives,” he said.
Hubbard said some of the private operators may seek to lease locomotives from Transnet, which has 600 of them sitting idle. He described third-party access as a “saviour” for Transnet because apart from leasing rolling stock, the TOCs would pay toll fees at about R150,000 per train.
“Transnet will get to lease idle equipment, and you start to earn toll fees like on toll roads. Transnet is an enormous organisation with enormous amounts of assets, but they do not sweat the assets. These assets need to start moving.”
Transnet said on Friday the requirements for would-be TOCs were spelt out in the network statement it published in December 2024.
“Submissions were assessed for conformance with [these] requirements and criteria ... The applicants were conditionally awarded slots subject to the successful completion of the railway safety regulator processes, operational readiness plans, confirming due diligence and securing port offloading capacity where applicable.”
TRIM estimates that the TOCs will carry an additional 20Mt of freight, and should start operating in financial 2027. Rail volumes plummeted to 149Mt in financial 2024, but rose to 160Mt in financial 2025 — still 90Mt short of the 250Mt target.
There will be six new entrants operating on 15 routes on the north corridor, which carries chrome and coal for export and for domestic use.
Two of the new entrants will operate two routes on the Cape corridor for the transport of manganese. The northeast corridor, which handles coal, chrome, magnetite, fuel and containers, and links South Africa with its neighbouring countries, will see six new entrants operating on 16 routes.
On the central corridor, which transports containers and coal, a single entrant will operate on two routes. The container corridor between Johannesburg and Durban will see the introduction of four new entrants, operating on five routes for the transportation of containers, coal and sugar.
Speaking at a Southern African Railways Association conference in Johannesburg this week, Creecy said the entry of TOCs was a major step towards promoting private access to freight rail in South Africa. She said the companies had their work cut out.
“They have important work to do. They have to register with the rail safety regulator, and they also have to enter into negotiations with Transnet. We are excited to have reached this point.”
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