Private operators set to revitalise SA’s struggling rail network?

African Rail Company, a UAE-based rail logistics operator, looks set to enter South Africa’s freight rail market as efforts to revitalise the country’s moribund rail network move ahead. 

Transnet, the state-owned freight transport and logistics company, has opened its network to private operators under a third-party access framework. This in a bid to improve rail inefficiencies and bottlenecks been a major constraint on economic growth over the past decade. 

According to a report by news agency Bloomberg, African Rail Company is one of 11 private operators to receive conditional access to Transnet’s rail network. 

Significant rail logistics expertise 

ARC, as it is known, has significant rail logistics expertise in Africa and has well-established operations in Mozambique, Zimbabwe and Botswana. 

In an interview with Bloomberg, ARC Chief Executive Officer, Youssef Elgonaid, said the company plans to use a rail line that runs to South Africa’s northeastern border with Mozambique. 

It will also use tracks that connect the commercial hub of Gauteng province to the main port of Durban – a line that carries the bulk of South Africa’s container cargo. 

Some of the funding that ARC intends to raise for the SA project will also go to regional operations that move copper from mines in the Democratic Republic of Congo to Mozambique’s Maputo port, Elgonaid told the news agency. 

Excitement about the logistics space 

“We’re seeing massive excitement about the logistics space,” in part because of rising demand for critical minerals and the need to shift heavy cargoes away from road transport, he said. “Rail is the only solution overland for these corridors.” 

On its website, ARC says the company was founded in 2013 “on a firm belief in the future of rail transportation in Africa and a vision of a group that would lead the rail logistics industry on the continent”. 

It adds: “Our core business is the transportation of fuel; we are the largest fuel transporter by rail in both Mozambique and Zimbabwe. We also transport bulk commodities and have made significant investment in our container and bulk commodities divisions.”