African rail services company Traxtion announced on Tuesday (2) that it will invest 199 million dollars in new locomotives and wagons in South Africa, as it prepares to operate trains on the country’s main lines for the first time following reforms that opened the network to private operators.
According to Reuters, the Government has allowed private companies to use the freight rail network of the state-owned South African logistics company Transnet, as the operator has struggled to provide reliable services due to equipment shortages and maintenance delays after years of underinvestment. The situation has been further worsened by cable theft and vandalism.
Traxtion’s investment, which operates in ten African countries, signals growing private-sector confidence in rail reform and provides a boost to efforts to shift freight from road to rail. The additional capacity may help ease a national shortfall that has weighed on commodity exporters.
The investment includes 105 million dollars for 46 diesel-electric locomotives and 93 million dollars for around 920 wagons. The units, supplied by New Zealand’s state-owned rail operator KiwiRail, are expected to begin operations within the next 12 months.
According to Traxtion CEO James Holley, the new trains will be able to meet about 5% of total demand. Speaking to the press, he said: “So we are quite confident that there is a market for assets — of high quality and high capacity — that can be acquired at a really affordable price and enter the market quickly.”
The locomotives will be used mainly on bulk freight routes, which Holley described as the most economically viable given the state of the country’s rail infrastructure. He did not specify the routes but noted that the company is in advanced negotiations with clients.
Bulk mineral exporters such as Kumba Iron Ore and thermal coal exporter Thungela Resources have been forced to cut production due to Transnet’s limited capacity.
