Overview
Table: Total Market Size for Rail Infrastructure
Total Market Size for Rail Infrastructure | ||||
| 2021 | 2022 | 2023 | 2024 |
Total Market Size | 700,000 | 700,000 | 700,000 | 700.000 |
Total Local Production | 140,000 | 150,000 | 150,000 | 160,000 |
Total Exports | 55,000 | 58,000 | 60,000 | 65,000 |
Total Imports | 800.000 | 750,000 | 770,000 | 750,000 |
Imports from the U.S. | 280,000 | 230,000 | 240,000 | 220,000 |
Exchange Rate: 1 $ | 15.9 | 16.00 | 18.00 | 18.00 |
Unit: $thousand
Total Market Size = (Total Local Production + Total Imports) – (Total Exports)
Note: Above figures exclude the value of the independent Richards Bay coal terminal consortium upgrades and multi-year diesel and electric locomotives roll-out confirmed in 2010 and 2014. Figures also exclude related road, highway, and port/maritime investments. Figures are unofficial estimates obtained from press and industry sources.
South Africa has the most extensive rail infrastructure in Africa. However, rail (freight and passenger) and port capacity declines remain a severe constraint in domestic and regional trade, even in the currently constrained business environment. The South African Government’s plans to spend R900 billion by 2027 on rail infrastructure, have been beset by regulatory and organizational challenges, as well as theft of cabling, rail, and station infrastructure. Since 2017, commodity exports have consistently dropped due to rail inefficiencies. The authorities’ intentions of addressing failings in the rail environment have made little progress in streamlining the freight and passenger network on the 3’6” Cape gauge with new tractive systems, carriages, hoppers, signaling and fare collection systems. Internal inefficiencies and administered rail tariffs have made competing against road freight almost impossible. Feasibility studies to expand the 4’8” gauge Gautrain high-speed passenger rail project in Pretoria and Johannesburg across Gauteng Province have been completed; implementation of work for the western route expansion is planned for 2026. The proposed routes under investigation include a link from Lanseria through Honeydew to Sandton, an additional line from Mamelodi, north-east of Pretoria, to Naledi, west of Johannesburg, and extending the service from the OR Tambo International Airport to Boksburg.
Opportunities
Transnet moved 151.7 million metric tons (Mt) (equivalent to 167.2 million U.S. tons) of goods for the 2023/24 financial year, which represents a 1.5 percent increase from the 149.45Mt moved during the previous year. Volumes have continuously declined from a peak of more than 200Mt a year in 2019 owing to mismanagement of the rail system, vandalism and theft of copper cables. Similar to its plans to modernize port operations—particularly through equipment upgrades—Transnet believes that the overall efficiency and capacity of South Africa’s rail system will improve and deliver the desired results.
State-owned Transnet Freight Rail (TFR) and others are reviewing logistics (mainly rail, but also ports) projects such as upgrading the Sishen-Saldanha Bay ore line, the Richard Bay coal line, and other new coal line networks in the North West Province. Transnet’s rail and port projects were set to cost around R300 billion over seven years and include augmenting the tractive and bulk car fleet, signaling, maintenance, advanced train management systems, increased line security, and network expansion/concession models.
In 2021, TFR announced plans to introduce concessionary and third-party operators into its branch lines, and later, the main line network. To achieve this goal, TFR is commercially separating rail infrastructure from operations, but as of 202, private-sector interest has been limited to 12 line-operating concession offers; TFR announced in 2022 that it had conditionally awarded Traxtion Sheltam to operate lines on the Cape Corridor. TFR is also developing a hook-and-haul service to increase private freight rolling stock.
The first phase of the extension of the north, south, west and east high-speed passenger public-private partnership (PPP) Gautrain line is undergoing the necessary approvals by National Treasury to enable commencement of the procurement cycle; this follows the conclusion of the feasibility study. Once funding is secured, groundwork is expected to start by 2026.
In 2025, Transnet announced plans to reform the South African rail network, by allowing for the participation of private operators. This will go a long way in increasing Transnet rail volumes and assist producers in the mining and agriculture sector meet rail cargo volume expectations to exporters as well as encourage the upgrade of the rail infrastructure. It is estimated that the new Train Operating Companies (TOCs) will carry an additional 20 million metric tons (equivalent to 22 million U.S. short tons) of freight per annum from 2026. Of the 25 TOCs applications received, 11 have met the necessary requirements and will proceed to the next stage of negotiations and contracting.
The initial allocations, on a total of 41 routes and six corridors, are as follows:
• North Corridor: six new entrants, 15 routes for transportation of coal and chrome.
• Iron Ore Corridor: one new entrant, one route for transportation of iron ore.
• Cape Corridor: two new entrants, two routes for transportation of manganese.
• Northeast Corridor: six new entrants, 16 routes for transportation of coal, chrome, magnetite, fuel, containers.
• Central Corridor: one new entrant, two routes for transportation of coal, containers (manganese).
• Container Corridor: four new entrants, five routes for transportation of containers, coal, and sugar.
The benefits of third-party access include, among other things, improving utilization of the network and thus increasing rail efficiency; reducing network unit costs by involving more operators; increasing revenue to contribute to investment in the maintenance and modernization of the network, and reducing the external costs of freight logistics and improving the competitiveness of rail as a more environmentally friendly mode of transport.
Sub-sector Best Prospects
Transportation equipment and infrastructure:
• Strategic Route Design and Network Planning
• Business Model Analysis and Concession Project Management
• New and Refurbished Locomotives
• New Bulk Car and Other Dedicated Rolling Fleets
• Smart Signaling and Operations Automation
• Security and Surveillance Systems
• Automatic Fare Collection Systems
• Rolling Stock Depot Design
Web Resources:
https://www.iol.co.za/
Tambo-Springs Multi-Modal Logistics Hub
Exhibitions:
Africa Rail 2026 Conference and Exhibition
July 7-8, 2026
Sandton Convention Center, Johannesburg
SARA Conference 2026
August 2026
Sandton Convention Center, Johannesburg
For More Information, the U.S. Commercial Service in Johannesburg, South Africa can be contacted via e-mail at: Sanjay.Harryparshad@trade.gov
Phone: , +27 31 305 7600 Ext 3350 or visit our website:
https://www.trade.gov/south-africa/