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SA’s first private rail freight route, from Kroonstad to East London, on track for April 2023

Home Transport & Logistics Exports & Imports SA’s first private rail freight route, from Kroonstad to East London, on...

AFRICA’S largest private rail freight operator, Traxtion, was conditionally awarded a slot on Transnet’s Cape Corridor between Kroonstad and East London in late November. The company is ‘extremely committed’ to third-party access to unlock the freight potential in South Africa, according to CEO James Holley.

“From April 1 next year, once all the safety and contractual obligations have been signed off, the first component of Transnet’s freight rail network will be run by a private company, running three trains a week between Kroonstad and East London,” Transnet spokesperson, Ayanda Shezi, said in an opinion piece on BusinessLive.

Traxtion will be required to complete the rest of the application process, which entails fulfilling the Rail Safety Regulator requirements and assessing whether it is feasible to join the Transnet Bargaining Council and other operational readiness requirements, the company said. Upon successful completion of the second stage of the evaluation process, Traxtion will enter into final negotiations and commence operations on the route in the new financial year 2023/24.

“There is a way to go before this becomes a reality but in principle we are looking forward to working with Transnet to achieve the goal of true private third-party access to the rail freight network,” Holley said.

The company applied for the route from Kroonstad, one of the largest cities in the Free State, to the port city of East London. Traxtion says the route will be used to transport agricultural products. In an online video interview with Railways Africa Magazine in 2020, Holley made it clear that Traxtion was aiming to move general cargo currently travelling via road freight to rail.

The announcement of the successful bid on November 25 was something of a damp squib after what started as a highly anticipated process set to revolutionise rail freight in the country. Transnet has defended the slot contract deal’s short two-year duration and limited flexibility as a ‘pilot phase’.

According to Transnet, an initial 19 parties expressed interest to apply for the 16 slots that were advertised for the Container Corridor (Durban to City Deep) and the Cape Corridor (between East London and Springfontein). Following the closure of the application process on August 31, 2022, Transnet received applications from two companies which both expressed interest in the Container Corridor, with one of the two further expressing interest in the Cape Corridor.

In relation to the Container Corridor, both applicants did not meet the stage 1 evaluation criteria which require electric locomotives for the operation, Transnet said.

“We are more committed than ever to bringing in additional private sector partners. We are developing a timeline for the next phase of this process, and for the next slot sales, as we firmly believe they are a vital step in increasing rail capacity and growing the economy,” said Shezi.

Traxtion has a head office in Rosebank, an administrative office in Gqeberha and a rail services hub in Rosslyn.

Slot sale overview

South Africa’s draft white paper on National Rail Policy (NRP, 2017) positioned access to third-party operators to the Transnet Freight Rail (TFR) railway infrastructure network as the crux of South African rail reform.

The NRP (2017) sets out the government’s intention to vertically separate Transnet Freight Rail (TFR) into a rail infrastructure business. Post the introduction of third-party operators, TFR’s mandate will be infrastructure custodianship, with rail operations conducted by TFR as the dominant operator together with third-party operators to whom TFR will grant access to its infrastructure.

There has been no update on the establishment of a single transport economic regulator to oversee and regulate access arrangements, train path allocation and access fees, amongst other regulatory roles, suggested in the NRP. “The espoused policy regulations,” were also supposed to “advocate a third-party access position paper”.

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