JOHANNESBURG, Dec 2 (Reuters) – Traxtion said on Tuesday it would invest 3.4 billion rand ($199 million) in new locomotives and wagons as the freight company prepares to run trains on South Africa’s mainlines for the first time after reforms opened the network to private operators.
The government has allowed private firms to use Transnet’s freight rail network as the state-owned operator has struggled to provide reliable services, hit by equipment shortages and maintenance backlogs after years of under-investment.
It has been further hampered by cable theft and vandalism.
The investment by Traxtion, which operates in 10 African countries, signals growing private-sector confidence in rail reform and is a boost to efforts to shift cargo from road to rail.
The added capacity could help ease a national shortfall that has weighed on commodity exporters.
The investment includes 1.8 billion rand on 46 diesel-electric locomotives and 1.6 billion rand on about 920 wagons.
The locomotives, supplied by New Zealand’s state-owned KiwiRail, are expected to start operating within the next 12 months.
The new trains will have the capacity to meet about 5% of demand, Traxtion Chief Executive James Holley told reporters.
“So we’re quite comfortable that there is a market for assets – high-quality, high-capacity assets – that can come in at a really cost-effective price as well, and come into the market quickly,” he said.
The locomotives will be deployed mainly on bulk commodity routes, which Holley said were the most economically viable given the poor state of rail infrastructure.
He did not specify the routes but said the company was in advanced talks with customers.
Bulk mineral exporters such as Kumba Iron Ore and thermal coal exporter Thungela Resources have been forced to curtail production due to Transnet’s limited capacity.
($1 = 17.1267 rand)
(Reporting by Siyanda Mthethwa.
Editing by Nqobile Dludla and Mark Potter)
