South Africa’s freight sector is gearing up for a significant shift as private rail operator Traxtion confirms a R3.4 billion investment in new diesel-electric locomotives, its largest commitment yet.
The move comes at a turning point for the country’s long-awaited rail reforms, which are gradually opening the network to private operators.
In its announcement, Traxtion said the incoming fleet would strengthen South Africa’s freight capacity, ease pressure on Transnet’s aging infrastructure, stimulate local economic activity, and accelerate private participation in a sector that has battled years of decline (Moneyweb).
Traxtion CEO James Holley described the multibillion-rand upgrade as a confident step toward renewed momentum in the logistics sector.
Holley said the company is backing the direction government is taking, explaining: ‘I think this is a big vote of confidence, where we’re saying that we’re happy with the direction of reform, we’re happy with the policies that have been implemented and the enabling legislation, and we’re ready to make an investment off the back of that.’
Traxtion is buying 46 diesel-electric locomotives from KiwiRail in New Zealand, a move made possible because KiwiRail is renewing its own fleet.
Holley said this presented an unusually valuable moment to secure a large set of high-reliability units suited to southern Africa’s narrow-gauge network.
‘It was an opportunity at a time that we felt we had the confidence to invest in South Africa,’ he said.
The company currently operates around a dozen locomotives with similar technology, which Holley says gives Traxtion a ‘very high degree of confidence’ that the rollout will integrate smoothly.
Once the locomotives arrive, Traxtion will work with Wabtec, globally recognised for diesel-electric locomotive manufacturing, to upgrade the units to higher performance standards.
Holley called the partnership an essential part of delivering exceptional capacity and reliability at a competitive price.
He added that the investment would help South Africa move closer to ‘true private rail freight services’ for the first time.
According to BusinessTech’s reporting, Holley emphasised the economic uplift that will come with the project.
‘About 79% of the total value of this contract is going to be placed with South African companies,’ he noted, adding that around 60% of that will feed directly into local content.
The expansion is also expected to create 662 direct jobs. With broader economic multipliers, the total number of jobs supported could be several times higher.
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Holley also pointed out that Transnet currently transports between 160 million and 165 million tons of freight annually, while demand sits closer to 250 million tons. Traxtion aims to help close part of this gap.
Holley highlighted the timing aligns well with reforms across the region that now allow private trains to cross borders more easily.
While the new locomotives and 920 wagons are currently earmarked for South African customers, he believes the groundwork is being laid for stronger cross-border operations in future.
‘The first locomotives will be available for service within the next 12 months,’ Holley confirmed, describing it as an unusually quick delivery schedule for major locomotive procurement.
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Picture: Traxtion /Instagram
