The first eight Wabtec C28 locomotives have arrived at the Port of Durban as part of Traxtion's R3.4bn rolling stock investment programme, marking a milestone in efforts to expand private freight rail capacity across Southern Africa.
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Following their arrival in Durban, the locomotives will be transported to Traxtion's Rail Services Hub in Pretoria, where refurbishment and upgrades are scheduled to begin in September before they enter commercial service.
The shipment is the first of four planned deliveries that will bring 46 locomotives into service over the next two years. The programme also includes the planned acquisition of 920 wagons valued at R1.6bn, bringing Traxtion's total planned investment to R3.4bn. In May, the company announced the successful close of a R1.5bn equity subscription underwritten by Harith, Stanlib and Standard Bank.
"The future of freight depends on collaboration between government and the private sector, backed by the kind of long-term investment needed to build capacity and unlock economic opportunity," says James Holley, CEO of Traxtion. "Every investment of this nature creates a multiplier effect that extends beyond rail, supporting jobs, strengthening supply chains and enabling economic growth."
Investment backs freight rail reform
The arrival of the first shipment comes as South Africa continues implementing reforms aimed at increasing private sector participation and expanding freight rail capacity.
Transport Minister Barbara Creecy recently said the country's freight rail reform programme has moved beyond planning and policy formulation to implementation.
Government has identified greater private sector participation as a critical component of revitalising the rail network, with reforms focused on enabling third-party access to the freight rail system and creating a more open and competitive market. The introduction of private train operating companies marks a significant shift in the structure of the industry, creating opportunities to unlock additional rail capacity and support economic growth.
The forthcoming Version 4 Rail Network Statement is expected to provide greater transparency and certainty around access to the national rail network, creating a more enabling environment for investment and giving operators greater confidence to commit capital to long-term freight rail projects.
"The transformation of South Africa's rail sector will require sustained investment, with a collaborative approach and keeping innovation at the heart of any new development. While policy reform provides the framework for greater private sector participation, infrastructure investment is what enables that vision to become an operational reality," adds Holley.
"For reform to succeed, policy must be matched by investment. The cost of trains means that businesses need to raise significant amounts of equity and debt. Equity investors into the sector need certainty which encourages long-term commitments, and the next version of the Network Statement is expected to be an important step towards creating that certainty.
"Once equity has been raised, debt capital markets open up. When equity and debt capital markets have the confidence to invest, the benefits extend well beyond individual operators to manufacturers, engineering businesses, suppliers and the communities that depend on a stronger economy."
Expanding freight rail capacity
A more efficient freight rail network is critical to South Africa's competitiveness, particularly as businesses seek more reliable and cost-effective ways to move goods to domestic and international markets. Rail plays an important role in transporting bulk commodities, agricultural products, manufactured goods and containerised freight, connecting industrial centres with ports and regional markets.
Government has set a target of increasing annual freight rail volumes to about 250 million tonnes from the current level of around 160 million tonnes through greater collaboration between the public and private sectors. Traxtion's rolling stock investment is expected to add capacity equivalent to approximately 4.5 million tonnes, highlighting the role private investment can play as the sector opens up.
The 46-locomotive investment programme will expand freight rail capacity while supporting local engineering capability, refurbishment expertise and skilled employment through work undertaken in South Africa. The programme includes 78% local procurement, 60% local content, the creation of 665 permanent skilled jobs, and upgraded locomotives fitted with new-generation 3,300-horsepower Wabtec engines.
Expanding rolling stock capacity is a critical step towards moving more freight by rail. The investment also supports the broader shift towards a more diversified freight rail sector, where public and private sector capabilities work together to expand capacity and improve service delivery across the network.
