South Africa has secured its biggest private-sector investment in freight rail to date, with Traxtion committing R3.4 billion, a little over $200 million, to enhance the country’s rail capacity. The agreement includes the purchase of 46 diesel-electric locomotives from New Zealand’s KiwiRail, which is withdrawing the units from its fleet.
The country holds Africa’s largest rail network, but years of declining performance, maintenance backlogs, theft, and equipment failures meant that size no longer translated into strength. Despite its scale, South Africa’s rail system has struggled to carry the volumes required by its mining, agricultural, and manufacturing industries. With the economy losing billions to logistics failures and growth stuck around 1.1%, the government had to rethink its approach. This opened the door for private operators like Traxtion to step in and help revive a system that had become a bottleneck.
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This is why this investment matters. South Africa cannot afford to let a strategic asset continue to underperform. Rail is central to moving minerals, feeding ports, supporting factories, and keeping logistics competitive. At a 2025 GDP of roughly $426 billion, every locomotive added to the network strengthens supply chains that directly influence the country’s overall economic performance.
The R3.4 billion programme itself is substantial. Traxtion is spending R1.8 billion on the KiwiRail locomotives and R1.6 billion on new wagons that will be manufactured locally. The project requires at least 60% local content, keeps almost 80% of its value within the country, and will create more than 660 direct jobs. Local steel, engineering, components, and maintenance companies will benefit from years of ongoing demand generated by the programme.
This investment also reflects growing confidence in the government’s decision to open parts of the rail network to private operators. South Africa currently moves only 160–165 million tons of freight annually, even though demand exceeds 250 million tons. Traxtion’s entry will help close part of this gap, offering relief to mining and export corridors that have suffered from years of declining capacity.
One of the defining features of the deal is the acquisition of locomotives that match Southern Africa’s narrow-gauge system, a rare stroke of timing. KiwiRail’s decision to retire its units meant high-quality locomotives became available at the exact moment South Africa was widening access to private operators. Traxtion will upgrade the fleet at its Rosslyn hub in Pretoria, supported by Wabtec, which will install new engines, digital control systems, and upgraded components. The first units are expected to run within a year of arrival, with the full fleet operational by 2028.
South Africa’s decision to allow private participation was not made in isolation. Years of infrastructure decay, limited capital investment, and operational inefficiencies had taken a toll. Transnet faced equipment shortages, unreliable service, vandalism, a collapse in locomotive procurement, and rising costs. As rail deteriorated, businesses shifted freight to road, causing congestion, damaging highways, and further reducing rail revenue. Ports became gridlocked, export volumes fell, and the country’s logistics system moved into crisis. Opening the network to private operators became less about reform and more about survival.
Traxtion and other operators expected to follow are not replacing Transnet. Instead, they are adding desperately needed capacity, helping unlock new freight volumes, especially in minerals like coal and manganese. This breaks the decades-long monopoly that has constrained growth and gives South Africa a chance to re-energise an asset that should be a competitive advantage.
Challenges remain, as much of the network still needs rehabilitation. Cable theft and infrastructure vandalism continue to disrupt operations. Funding gaps for major corridor upgrades persist, and ports require deep reform to match improvements in rail efficiency. Regulatory certainty will be crucial to keep private investment flowing and ensure that operators can plan long-term.
Globally, this moment is attracting attention. If South Africa successfully builds a collaborative public–private rail model, it could influence how other African countries approach logistics reform. International markets, especially those dependent on South Africa’s iron ore, manganese, chrome, and PGMs, stand to benefit from more predictable exports. Investors are also watching closely, encouraged by signs that South Africa is creating space for serious private-sector participation in infrastructure.
Looking forward, the deal opens multiple long-term opportunities: growth in local manufacturing, stronger regional corridors across the SADC region, modern rail technology upgrades, more private entrants, and a more competitive export environment. A stronger rail system gives industries room to grow and allows South Africa’s logistics backbone to slowly rebuild its reliability.
Traxtion’s investment is more than a capital injection; it marks a turning point. It shows that aligning reforms with industry needs can bring new life into an essential national system. With new locomotives, modern wagons, and renewed optimism, South Africa is taking an important step toward restoring the strength of its rail network. The real test now lies in maintaining policy consistency, rehabilitating core infrastructure, and building a partnership model capable of carrying the country’s economy into a more competitive future.
