South Africa: How President Ramaphosa's Plan to Fix South Africa's Rail Network Has Derailed

analysis

The much-vaunted plan, which involves allowing private sector players to independently run trains and invest in Transnet's infrastructure, has bombed. And the state-owned enterprise is to blame.

It has been more than a year since President Cyril Ramaphosa announced a plan to fix Transnet's crumbling and unreliable rail network by allowing private sector players to participate and invest in it.

The plan, initiated by Transnet in April 2021 but first mooted by the government more than 10 years ago, has now derailed, hobbling any chance of a recovery in South Africa's economy.

The plan was simple. It sought to liberalise rail in South Africa, which has long been controlled by Transnet, by allowing the private sector to run trains and, at the same time, invest in Transnet's infrastructure to improve it. To do this, Transnet would sell 16 slots on its rail network to third parties or private sector players, allowing them to introduce their locomotives, independently rail their goods to markets, and move traffic off-road and on to rail.

Ramaphosa's plan recognises that Transnet is operationally and financially broken, and it neglected the maintenance of its rail infrastructure because the state-owned enterprise (SOE) was pillaged during the State Capture...

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