Reform progress in South Africa rarely moves in a straight line from A to B, with the stop/start nature of the country’s electricity reform being a case in point.

Nevertheless, there is a flickering of light beginning to emanate from the long and dark tunnel that the declining freight railway sector has been in for decades – and, at long last, that light may soon be from an oncoming train!
Moves to introduce new entrants onto the rail network have had numerous false starts and have also hitherto always sought to ensure that the network remained monopolised by the State-owned incumbent, Transnet Freight Rail (TFR).

There have, for instance, been several mostly unsuccessful attempts at concessioning branch lines. Failures here arose largely because the volumes were so low that it was almost impossible to attract the operators and investment required to make the service economically sustainable.
Then, there was the more recent, and even more unsuccessful, attempt by TFR in 2022 to sell 16 slots to private operators on its container and Cape corridors. From the outset, potential participants warned that the two-year slot contracts on offer were simply too short to ensure that returns could be made, particularly given the limited rolling-stock leasing options.

Although one conditional award was announced, TFR and Traxtion Sheltam ultimately jointly agreed to terminate the proposed transaction, which ran into several difficulties and was also overtaken by policy and regulatory developments that unfolded in parallel.

Likewise, progress has been glacial on the proposed 20-year operating lease offer for Transnet’s underperforming and crime-ridden container corridor between Durban and Johannesburg. However, there are indications that Transnet is still planning to pursue the scheme.

So, where is this so-called light at the end of the tunnel coming from?