October 31, 10:33IOL

South Africa's railway transport reform stimulates private investment and competition

The railway transport reform program in South Africa has opened the freight rail market to broader private investment and increased competition. The next critical step is ensuring that this opportunity leads to increased capacity, improved service reliability, and tangible economic benefits.

The stakes in this matter are high. According to the latest logistics status report, the cost of transporting goods across the country is projected to reach a record R1.16 trillion in 2026, equivalent to 14.6% of GDP, exceeding all global counterparts. Improving the performance of the railway transport can reduce these costs and strengthen South Africa's economic competitiveness.

Opening the rail network to private Train Operating Companies (TOCs) can solve this problem, but the success of the reform cannot be measured solely by the number of signed access agreements or the number of new operators gaining network access. The government, private operators, and investors must jointly participate in creating a more efficient railway system for the economy. Progress will depend on aligning these contributions around the common goal—more reliable, efficient, and competitive freight transport.

Access is only valuable if it is utilized

Transnet Railway Infrastructure Manager (TRIM) has finalized Railway Access Agreements with 11 private TOCs, eight of which are new sector participants. As more companies apply for access to the rail network, the sector must be able to distinguish between interest in operating trains and the actual ability to provide viable service.

Freight transport requires significant investment in assets, skills, and operations. Granting access alone does not provide the necessary resources or guarantees that an operator will be ready to utilize the allocated capacity within the stipulated timeframe. Unused capacity means potential cargo volumes are not realized, capable operators remain waiting, and economic growth is missed.

The solution is not to restrict competition or create unnecessary barriers for new entrants, but to ensure that capacity allocation goes to companies that have demonstrated the capability and willingness to provide services. South Africa needs transparent, evidence-based requirements that objectively assess an applicant's capacity and readiness to use the requested capacity. This must be supported by clear implementation milestones and redistribution mechanisms where necessary. A 24-month allocation cycle allows for transforming network access into effective freight services, but failure to realize this potential threatens the slowdown of railway reform.

Capital requires a viable operational environment

Every additional million tonnes of train capacity requires approximately R1 billion in rolling stock investment. Securing this level of capital depends on the confidence of investors and lenders that efficient railway operations can generate predictable long-term cash flows. Two factors remain particularly important for the investment case: first, the condition and reliability of the railway infrastructure; and second, the need for clear service level commitments regarding TRIM's performance.

Years of underfunding of railway infrastructure have resulted in some parts of the network operating below design capacity, and restoring key corridors will require significant capital and time. Furthermore, it is crucial to have a clear and credible understanding of the service level the network can realistically provide as restoration work proceeds. Without this, operators cannot accurately forecast volumes, costs, and profitability, which complicates risk assessment and project financing by lenders. In the absence of confidence in operational cash flows, lenders demand a high level of equity in the train investment structure. This increases the cost of freight transport, limits investment, and prevents new entrants without access to substantial equity capital from entering the market.

Thus, the Network Report is crucial for the success of railway reform, and it can be strengthened through clear service level commitments and mutual accountability. Operators must be responsible for providing the services they claim, while infrastructure managers must ensure transparency in the network operation upon which operators depend. Frameworks based on clear commitments, constructive engagement, and shared responsibility will build the necessary confidence to attract investment and build a competitive freight transport market.

Investment makes reform real

The Vector project by Traxtion demonstrates the scale of private investment required to increase freight capacity in the market. This program involves R1.8 billion for 46 diesel-electric locomotives and an additional R1.6 billion for approximately 920 wagons. The first locomotives are expected to begin operating in the first half of 2027, and the program is scheduled for completion in 2028.

Once commissioned, Project Vector is projected to transport about 4.5 million tonnes of cargo annually, covering approximately 5% of South Africa's freight logistics deficit. The project is planned with 60% local content and 78% local procurement volume, with an expected R207 million going into the lower-tier locomotive industry and R1.6 billion into wagon manufacturing. These investments put assets into operation, increase freight capacity, and create long-term demand for local engineering, manufacturing, maintenance, and technical skills. The project is expected to support 662 direct jobs at Traxtion, boost supply chain activity, reduce fuel consumption by approximately 15% due to new engines, and cut carbon emissions by 40%–60% compared to road transport.

Project Vector serves as an example of what successful railway reform can achieve by converting private investment into operational capacity, competitive logistics, and broader economic value, including job creation, although such progress is only possible provided the network is financially viable to attract investment.

Measure reform by its implementation results

The goal is not simply to increase the number of slots provided, but to transport a larger volume of cargo more efficiently by rail, which strengthens South Africa's competitiveness and creates a sustainable foundation for development. Achieving these goals will require joint efforts from public and private stakeholders to initially implement a robust process for granting access to the national railway network, as well as ensuring that private sector applicants fulfill the allocated rail capacity on schedule.

Railway reform has created new theoretical possibilities related to railways. The task now is to transform access into investment, investment into additional capacity, and capacity into measurable economic growth. James Holly, CEO of Traxtion, and Reneylwe Mokoena, Investment Director at Harith General Partners.

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iol.co.zaOctober 26, 13:47

How urban environment improvement zones in Durban contribute to attracting major investments

Urban Improvement Districts (UIDs) are playing an increasingly significant role in Durban's efforts to attract investment by enhancing the safety, cleanliness, and overall appeal of key commercial and tourist areas.

These non-profit organizations are established by property owners in specific zones and provide supplementary services that complement municipal offerings. Owners contribute additional funds through a special assessment regime, enabling UIDs to provide services such as security patrols, cleaning, and maintenance.

Once the necessary level of support from property owners is secured and relevant municipal permits are obtained, a zone can be officially established. These initiatives aim to create cleaner, greener, and safer public spaces, which helps build the trust required to attract long-term private investment.

R1 billion amusement park investment signals growing confidence

One of the latest examples of investment in Durban is the planned R980 million amusement park on the former Funworld site along the Golden Mile. The eThekwini Municipality confirmed that the development finance institution has approved funding for the project's development phase. Design work is complete, technical planning is underway, and remaining legislative procedures are expected to be finalized by the end of the first quarter of 2027, after which construction will commence.

This project is expected to create around 1400 jobs and will include rides, digital entertainment zones, retail shops, and an upgraded amphitheater. This development represents substantial investment in the Durban waterfront, with local entrepreneurs highlighting the role of UIDs in creating conditions favorable for such projects.

UIDs strengthen safety and maintain public spaces

The impact of UIDs is evident in several existing commercial and tourist areas. On Florida Road, the UID conducts 24-hour vehicle patrols, additional weekend foot patrols, and maintains a dedicated cleaning team. These services help sustain an environment that supports restaurants, businesses, and visitors.

In the uMhlanga area, the UID maintains a constant security presence, including a control room and waterfront patrols. It also collaborates closely with the Metro Police and the South African Police Service (SAPS). The goal is to maintain safe, clean, and attractive public places that encourage the retention of existing businesses in the area and attract new investment.

The eThekwini Municipality has also publicly commended the Glenwood UID for its contribution to safety and service provision through collaboration with the city. Similar initiatives have been created or are in development in other suburbs and commercial nodes.

Foot traffic on the Golden Mile demonstrates tourism potential

Durban's Golden Mile recorded 17.45 million pedestrian movements in 2025, a 20% increase compared to the previous year. While these figures highlight the waterfront's tourism potential, sustained investment will partly depend on whether visitors feel sufficiently safe to spend time and money in the area and return regularly.

For developers of large tourism and entertainment projects, consistent safety, cleanliness, and maintenance are crucial factors. UIDs help address these issues by providing supplementary services that augment municipal operations. Although these initiatives cannot independently resolve major infrastructure problems or broader service delivery challenges, the municipality states they create employment opportunities, support local service providers, increase property values, and attract investment. The reliability of these services can help strengthen the business case for long-term investment.

Recent data from Durban's CBD indicates that coordinated safety initiatives can contribute to improving the security situation. Ensure Ubuntu, a private security and cleaning service provider working with the municipality, reported a 28% reduction in visible serious crime in the CBD during its first 14 months of operation. The organization attributed this decrease to 24-hour patrols and faster response times. It also reported that its staff arrested 290 suspects in cooperation with the Metro Police and SAPS.

A municipal economic development official stated that this partnership helps create a safer and more attractive environment for investment, trade, and small business growth. The Central Durban UID, which covers the South Beach area along the waterfront, previously collaborated with a private security firm and the Metro Police through CCTV monitoring, control rooms, and vehicle patrols. It also coordinates with other UIDs via shared messaging platforms, allowing zones to exchange information and respond to security issues more effectively. This collaboration provides an added layer of security that can be beneficial for large tourism developments and surrounding businesses.

Public-private partnerships are key to sustainable investment

The long-term success of Durban's UIDs will depend on their ability to maintain safety, cleanliness, and other services while operating in parallel with the municipality. For investors, the stable provision of services and well-maintained public spaces can help mitigate operational risks and enhance the attractiveness of commercial and tourist venues.

The planned R980 million amusement park represents a significant opportunity for the waterfront, but its success will also depend on the broader environment in which it operates. By addressing daily issues such as crime, litter, and the deterioration of public spaces, Durban's UIDs help create conditions that support business activity and encourage investment. While the amusement park cannot be directly attributed to UID work, these initiatives are part of a wider effort to revitalize Durban and bolster confidence in its economic future.

This is a major sign of confidence in the Durban waterfront, with local entrepreneurs noting that the growing number of UIDs has played a real role in making such commitments possible. Results are visible in places like Florida Road, where the UID provides 24-hour vehicle patrols, additional foot patrols, and a dedicated cleaning team, sustaining a vibrant and welcoming atmosphere for restaurants and visitors. In uMhlanga, the UID maintains a constant security presence, including a control room and waterfront patrols, interacting closely with the Metro Police and SAPS. The goal is simple: keep the place safe, clean, and attractive so that existing businesses remain and new ones feel welcome. The Glenwood UID even received public praise from the city for practical partnership in safety and service provision. Similar systems are operating or being launched in other suburbs and commercial hubs. Foot traffic on the Golden Mile reached 17.45 million in 2025, 20% higher than the previous year. However, for long-term investors, the question is whether people will feel safe enough to stay, spend, and return, as investors in the project are betting on foot traffic. This is where UIDs come into play. While they do not solve all problems, such as major infrastructure restoration or solving urban issues alone, the municipality asserts that UIDs create jobs and opportunities for local service providers, increase property values, and attract investment. For investors considering tourism or entertainment projects, this reliability matters.

iol.co.zaOctober 24, 14:00

Long commutes to work in South Africa contribute to the persistence of poverty among workers

Nearly a quarter of South African workers leave their homes before six in the morning, and this is not because work starts at that time, but because of the commute itself.

The average travel time by train is 107 minutes one way, by bus is 84 minutes, by taxi is 63 minutes, and by car is 44 minutes. These figures are averages, and many people spend significantly more time traveling, with the duration of their journeys constantly increasing.

The time spent commuting means the loss of numerous opportunities: homework is glanced at instead of being done for an hour, meals may be eaten standing up or skipped entirely, and conversations are postponed until the weekend, joining a host of other deferred tasks.

Researchers from the Harvard Growth Lab assessed this problem. The cost of travel and fuel amounts to about 17% of net income. They then assessed the travel time itself, assigning the value of the employee's hourly wage to each hour spent in transit. Thus, a person who spends three hours a day commuting during an eight-hour workday has effectively worked eleven hours for eight hours of pay. Combined, this accounts for 57% of their salary.

Money constitutes a smaller part of this burden, while hours constitute a more significant one, and no one bills them for it.

These hours do not disappear without a trace. The difference between the average train passenger and the average car driver is just over two hours per day, which equates to more than 500 hours over approximately 250 working days a year. This is enough time to gain qualifications, start a side business, or for a parent to participate in their child's upbringing. One person can invest this time, while another spends it sitting idly, and this gap widens every year without measures to eliminate it.

The situation closes into a vicious cycle: finding a job requires time and money, which become increasingly scarce the further a person lives from the city center. As a result, people take the jobs they can reach, rather than the ones they could perform, keeping their income low and preventing them from changing their location.

The International Monetary Fund found in March that in areas where the usual commute takes more than an hour, the unemployment rate is higher than in areas where it lasts less than 15 minutes, by more than 20 percentage points.

Distance does not just complicate the journey to work; it complicates the very possibility of getting a job.

None of this is a natural phenomenon; distances were designed. According to the Group Areas Act of 1950, people were evicted from parts of the city where workplaces were located and relocated to settlements on the distant outskirts, leaving strips of industry and open land between them to segregate groups. Distance was not a byproduct of this plan, but its tool.

Less discussed is what happened afterward.

Since 1994, the state has built about two million houses, mainly where land was cheap, and cheap land is located on the periphery of cities, far from workplaces. This time, the motive was not ideological but budgetary, supported by goals based on the number of units built rather than the distance to work. However, a house is not just a structure; it is also a location, and the location determines the cost of living. Thus, a program intended to correct spatial injustice reproduced its geography for reasons that looked rational in a data table.

It must be acknowledged that no one intended to repeat past mistakes, and policy has changed conscientiously multiple times. What has not changed is the price of land. It is high near the city and cheap on the outskirts, and a budget evaluated by the number of houses built will always lean towards the cheaper option.

By placing people far away, we pay annually for their round trips. Next year, nearly 10 billion rand will go to subsidizing suburban rail transport, and over 8 billion rand to bus contracts, while the housing settlement budget, which could reduce distance, shrinks for the third consecutive year.

Meanwhile, the cheapest form of transport has quietly disappeared. In 2013, the railway served about 49 million passenger journeys in one month, and by 2022, this figure had dropped to about one million, with those who used it switching to taxis, which cost almost twice as much.

No one pays double willingly. Where trains run, people use them. Our trains stopped running. Lines were closed, carriages were dismantled, and the schedule became a recommendation, and what remained seemed unsafe. Nearly two-thirds of train users reported dissatisfaction with safety on board to the South African Statistics Agency, and more than seven out of ten reported dissatisfaction with safety on the way to the station. A service that is unreliable and unsafe is never cheap.

This shows what choices exist. The cheap option does not work; the one that works costs more than many people earn, and reliability here is what needs to be bought. The further you live, the more you need it and the less you can afford.

People did not wait. Informal settlements and backyard rooms, which were unplanned, are often better situated than state-built homes, as those who built them preferred proximity to ownership, giving up title deeds for an hour a day. It took until the mid-2000s for policy to begin viewing this as a rational trade-off and to start improving these settlements in situ.

In July, the Constitutional Court stated something similar. The ruling states: 'Spatial inequality has condemned many South Africans to extremely long commutes, requiring multi-hour journeys every day, often before dawn.' The court ruled that the housing system, which is built only on the city outskirts, is unconstitutional. The court noted that the location of a home is not just one of many factors, but a necessary factor.

Now every government in the country is bound by this, and it is not leading to the construction of a single new home.

It only determines whether all of this was inevitable. For more than seventy years, we viewed distance as a feature of the landscape, and the commute as the cost of living away from the center, when someone deliberately created this distance and then, over three decades, restored it by mistake.

Whether this changes will be seen not in a court ruling. It will be seen in where the next houses are built, and whether the person leaving home tomorrow before six in the morning does so because of a map drawn by someone, or because of a map that no one could redraw.