The release of the Network Statement reflects the significant work of the Interim Rail Economic Regulator Capacity (IRERC), Operation Vulindlela, the Department of Transport (DOT), and Transnet in implementing South Africa’s long overdue rail policy, which underpins the Freight Logistics Roadmap (FLR) approved by Cabinet in December 2023. 

B4SA remains fully committed to the FLR as a cornerstone of the country’s broader reform agenda within South Africa’s supply chain.

Ian Bird, senior executive for the Transport & Logistics focal area of B4SA, says: “The Network Statement represents a pivotal step in unlocking the potential of South Africa’s rail network through third-party access, which is one of several ways identified to bring private sector participation into the system. Other options, such as concessions, allow private operators to manage sections of the network and may involve different cost structures for logistics users.”

Importantly, the Network Statement encompasses more than just tariff structures, addressing vital technical and operational considerations. The modelled tariff structure reflects a balance between stakeholder demands and Transnet’s initial proposals.

“There has clearly been a lot of work put into the final Network Statement, with tiered pricing that has been globally benchmarked,” adds Bird. “The outcome is a commercially responsible approach that is palatable for industry and supports the country’s road to rail strategy.”

The tariff structure and pricing only apply to Transnet’s current financial year (ending March 2025) and work has already begun to develop the 2025/26 tariff framework and pricing. Longer-term tariff pathways will be shaped by the competition inquiry into the sector and the creation of the Transport Economic Regulator (TER).

B4SA also highlights the importance of leveraging private sector resources to enhance infrastructure without impacting Transnet’s balance sheet. The rapid establishment of the Private Sector Participation (PSP) Unit within the Development Bank of Southern Africa (DBSA), under DOT oversight, is an essential step to effectively manage diverse private sector participation processes.

For now, B4SA remains focused on ensuring that the reform process is robust, inclusive, and ultimately delivers the efficiency and competitiveness needed to unlock South Africa’s economic potential and create much needed jobs.

As part of this reform journey, B4SA continues to collaborate closely with IRERC, DOT, Operation Vulindlela, Transnet, the National Logistics Crisis Committee (NLCC), and other industry stakeholders. Supported by international expertise from organisations such as the World Bank and the Resource Mobilisation Fund (RMF), these partnerships are key to driving structural reform and operational recovery, with the ultimate aim being to create a sustainable and competitive supply chain in South Africa.

“While this progress is encouraging, it’s important to remember that this is just the beginning and it will still be some time before we see concrete, tangible results,” explains Bird. “We have started a process of institutionalising a key market foundation, but significant work remains to fully implement reforms, maximise maintenance efforts, and achieve operational recovery. This process must continue to be constructive, inclusive, and focused on delivering long-term benefits for all stakeholders.

“Business for South Africa thanks the Presidency, the Department of Transport and all other Government entities, who - with the full support of Business - were able to deliver on the commitment made by the President and his team during the approval of the White Paper on Rail Reform to deliver the Network Statement before Christmas. We look forward to collaborating on the Railways Bill that is being presented next year in Parliament.”

About Business for South Africa (B4SA)

B4SA is a BUSA platform, bringing together key South African business leaders to address urgent national challenges and drive economic recovery and growth. B4SA focuses on key priority areas and works in close collaboration with government counterparts to find innovative solutions and create a positive impact for all South Africans.