The African Railway Industry Association (ARIA) estimates that R200 billion is required to restore South Africa's railway infrastructure to its original design condition. However, James Holley, ARIA’s immediate past chairman, noted that the national budget has a shortfall of R58 billion, which the National Treasury is attempting to address. This fiscal shortfall highlights the government's limited capacity to finance a large-scale bailout of the railway sector.
Holley stated that Transnet has an estimated net value of R136 billion but lacks the financial flexibility to invest in railway infrastructure. He estimates that the failure to maintain the railway system over the past 12 financial years has cost Transnet R34 billion. Additionally, South Africa currently faces a national shortfall of 90 million tonnes in freight capacity.
According to Holley, the ongoing railway reforms are paving the way for private sector investment, which he believes is the only viable solution to address South Africa’s railway challenges, specifically, poor infrastructure quality and insufficient trade capacity.
Holley acknowledged some positive steps taken by the government, including the regulation of the Transport Bill, the successful implementation of the interim regulator (IRC), the release of the final network statement, the full ratification of the Luxembourg Protocol, and the release of a request for information (RFI) for private sector participation projects in manganese, coal, and key transport corridors.
Despite these developments, Holley argued that the true measure of success will be significant investments in new trains and railway infrastructure at an economically meaningful scale.
Holley identified several factors contributing to the lack of investment in maintenance and upgrades, including weak implementation capabilities, procurement system constraints, and the diversion of resources away from essential maintenance and operational requirements. This lack of investment reduces infrastructure availability, which, in turn, leads to declining revenue and further discourages investment.
To bridge the maintenance backlog, Holley underlined the need for both public and private sector investment. He projected that, following the Private Sector Participation (PSP) investment project stemming from the RFI process, train frequency on the Gauteng–Durban corridor could increase. Once the infrastructure is restored to its design condition and modern signalling and network operating systems are introduced, travel times could be reduced to under 12 hours, making it possible for trains to complete two trips within 24 hours. This improvement would significantly increase monthly journey completions and boost revenue.
Holley also highlighted ARIA’s key achievements for the year ending March 2025, including advancements in rail reform and support for members in providing detailed commentary on the network statement as part of the public participation process. Additionally, ARIA has played a role in assisting the government in the adoption of the Luxembourg Protocol.
