Rail services and solutions provider Traxtion Group intends to embark on a significant investment programme within South Africa’s rail sector, which will, at first, see an initial locomotive and wagon build programme of R1.5-billion upon conclusion of the appropriate access rights with State-owned rail entity Transnet.
Traxtion plans to invest a further R14-billion to R17-billion in locomotives and wagons over the next five years as part of a carefully selected scaled rolling procurement programme.
The announcement is in response to the policy change by President Cyril Ramaphosa, which will see private freight rail operators allowed to operate on the State-owned rail infrastructure alongside and complementarily to Transnet.
This forms part of the President’s Economic Reconstruction and Recovery Plan, which was presented on October 15.
In a statement on October 26, Traxtion CEO James Holley said that while open access was “an exciting policy change”, the big story was the positive impact that greater access to railway infrastructure would have on the broader economy.
“This includes the development of new businesses, mines and farms and the expansion of existing businesses that will have access to rail services,” he said, adding that, when Traxtion invests in a train set to service a mine, for example, the company will employ between 40 and 50 people to run that service, but that the mine could employ 5 000 people.
“That’s the real story, and that is why this is such an exciting policy shift,” Holley said.
He explained that the rolling stock investment programme would result in Traxtion partnering with a blue-chip original-equipment manufacturer and supplier for locomotives to be assembled in the local market.
For the wagons, Traxtion will partner with domestic manufacturers.
Traxtion will target the movement of general freight in South Africa converting road movements to rail. It plans to partner with established freight logistics businesses and does not intend to invest in warehousing facilities or freight consolidation hubs.