South Africa’s Rail Recovery Faces Major Hurdles Despite Private Sector Entry
JOHANNESBURG – Plans to revitalize South Africa’s struggling freight rail network face significant challenges despite the impending entry of 11 new private operators next year, according to a recent analysis by former Buisness Day and Financial Mail editor Peter Bruce. while freight volumes are projected to rise from a low of 151-million tonnes last year to 250-million tonnes by the end of 2029, with Transnet handling approximately 180-million tonnes of that total, experts suggest the private companies may struggle to move more than 20-million tonnes by 2030 due to the network’s disrepair.
The concerns highlight the depth of the problems at Transnet, which moved 226-million tonnes in 2017/18. Bruce argues that a fundamental overhaul of industrial policy is needed to accelerate reform, advocating for the removal of underperforming regulations such as preferential scrap pricing, high protectionist tariffs, and BEE impediments for new investors.He contends that fixed investment exceeding 25% of GDP annually is crucial for addressing unemployment, a figure significantly higher than the current average of 13%.
Bruce is critical of the government’s current ambitions, citing Operation Vulindlela head Rudi Dicks’ stated goal of reaching an 18% fixed investment rate as “way too modest.” He suggests that failure to achieve more ample progress could jeopardize President Ramaphosa’s political future.
The analysis underscores the critical role of rail infrastructure in South Africa’s economic recovery and the substantial obstacles that remain in achieving meaningful improvement.