The R20.37 billion private company breaking Transnet’s 116-year monopoly

South African logistics company Grindrod is making history by becoming the first private company to operate its own train on Transnet’s national freight rail network, marking a major breakthrough in the country’s efforts to end more than a century of state controlled rail operations.

The milestone is significant for South Africa’s economy, which has suffered from years of railway inefficiencies, declining freight volumes, infrastructure problems and delays affecting the movement of valuable exports.

Grindrod, a logistics group valued at approximately R20.37 billion, successfully completed a test train operation on the North-East Corridor in November 2026.

The development marks the beginning of a new era for South Africa’s freight rail industry, with private companies finally being allowed to compete with Transnet on its own railway infrastructure.

The test operation began in Komatipoort, Mpumalanga, on 1 November 2026. The train initially travelled without cargo before returning on 2 November carrying 2,991 tonnes of freight.

Importantly, Grindrod used its own locomotives and wagons rather than relying on Transnet’s trains.

The successful test demonstrated that private operators could use their own equipment to transport goods across South Africa’s national rail infrastructure.

Grindrod has been allocated two operating slots on the North-East Corridor, where it intends to transport coal from Mpumalanga to its Matola Terminal in Mozambique.

The company expects to begin commercial operations in 2027, with plans to move approximately 288,000 tonnes of cargo during its first year.

For decades, Transnet controlled South Africa’s national freight rail infrastructure and operations.

However, its performance deteriorated significantly with freight volumes falling because of locomotive shortages, maintenance backlogs, cable theft, vandalism and operational inefficiencies.

The consequences have been felt across the economy, particularly in the mining industry where companies depend on reliable rail services to transport commodities to export terminals.

South Africa has increasingly relied on road transport to move goods that would traditionally have travelled by rail.

The government’s decision to open the railway network to private operators is intended to introduce competition, attract investment and improve the country’s logistics system.

In 2026, Transnet confirmed that 11 private train operating companies had been approved to access five strategic freight rail corridors. These include Grindrod, alongside companies such as The Railway Corporation, MENAR, Sharp Logistics and TLD Marine.

The private operators are expected to introduce an additional 24 million tonnes of freight capacity, potentially increasing to 52 million tonnes over five years.

Opening the railway network to private companies does not mean Transnet is disappearing.

The state-owned company will continue managing the country’s railway infrastructure while private operators pay access fees to use the network.

However, substantial investment is still required.

Transnet Rail Infrastructure Manager estimates that approximately R70 billion will be needed over five years to repair and improve the railway network.

The objective is to restore the reliability of the country’s rail infrastructure and encourage businesses to move more freight away from roads.

Transport Minister Barbara Creecy has also set an ambitious target of increasing annual rail freight volumes to 250 million tonnes by 2030.

Grindrod’s successful test operation represents an important step towards transforming South Africa’s freight transportation industry.

The company can now work towards integrating its railway operations with its existing ports, terminals and logistics infrastructure.

This could create a more efficient supply chain for mining companies and other businesses that depend on transporting goods across South Africa and into neighbouring countries.

For Transnet, the arrival of private competitors could provide much needed assistance in addressing its operational challenges.

For the wider economy, the success of the reforms could mean faster exports, improved competitiveness and more investment in infrastructure.

South Africa’s railway network has been struggling for years. Whether private operators such as Grindrod can help turn it around will be one of the country’s most important economic developments to watch in the coming years.

Sources: The R20.37 billion private company breaking Transnet’s 116-year monopoly – Daily Investor

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