Transnet’s path to sustainable growth
By Dr Andile Sangqu
The recent Transnet interim financial results released in December 2025 for the six months ended 30 September 2025 signified a pivotal shift in momentum and supports our conviction that our current trajectory is aligned with our long-term objectives. It tells a story of an operational performance and capital expenditure lay a solid foundation for the future.
In the past two years, Transnet has arrested the long-term decline in freight volumes, stabilised operations, improved port efficiency, took steps to address security and prioritised customer engagement.
The Reinvent for Growth (R4G) Strategy guides our ambition to transform Transnet from operational recovery to sustainable growth through infrastructure investment, improved efficiency and pursuit of private sector partnerships (PSPs). We are positioning Transnet as a leading and sustainable logistics partner driving economic growth in South Africa and the broader African continent.
Since the beginning of the current financial year, we have seen a major shift from operational recovery to enabling sustainable growth. Our strong focus has been on optimising efficiency and modernisation, embracing PSP opportunities; assets optimisation and financial sustainability.
Improved financial position
Financial performance for the interim reporting period signalled a positive shift in Transnet’s financial health as increased volumes throughout the business boosted revenue, EBITDA and narrowed our loss for the period.
We continue to show sustained improvements, as the rail volume performance is higher than the prior period, reflecting an increase of 4,4% to 81,4 mt (2024: 78,0 mt). Performance improvements are evident through increased tonnage throughput, with the financial month of September 2025 recording an annual high of 14,8 mt, the highest monthly performance achieved since the 2022 financial year, despite the annual maintenance shutdown affecting manganese volumes. This resulted in a 17.7% improvement in the reported net loss of R1,8 billion (2024: R2.2 billion).
Private sector participation
The execution of commercially viable strategic PSP opportunities in order to unlock investment, attract expertise and improve service delivery is the cornerstone of Transnet’s recovery and the R4G Strategy, our medium-to-long term blueprint for transforming the organisation into a reliable logistics provider that actively supports South Africa’s economic growth aspirations. Our pursuit of these PSP opportunities is driven by our current priorities which include financial recovery, operational excellence and infrastructure modernisation.
Our much-anticipated strategic partnership with International Container Terminal Services Inc. (ICTSI) to manage and upgrade the Durban Container Terminal (DCT) Pier 2 is now at the implementation phase. The partnership marks a step forward in modernising DCT Pier 2, the largest and busiest container terminal in South Africa. It is a path to a more efficient and modern terminal. This private sector partnership (PSP) will introduce global best practice, advanced systems, and operational excellence.
The DCT Pier 2 transaction is one of several PSP opportunities that we are pursuing in order to improve efficiency, capacity and investment in South Africa’s logistics network. These include the Richards Bay Dry Bulk Terminal PSP, Ngqura Manganese Export Terminal project and the establishment of a rolling stock leasing company (LeaseCo), about which we will provide further updates during the course of the year.
Enhanced port performance
Our targeted capital expenditure programme has been instrumental in the recent steady and reliable improvement in the performance our terminals. In the 2024/2025 financial year, Transnet Port Terminals (TPT) set aside R3.4 billion to strengthen fleet across its container terminals, while another R4 billion has been set aside to acquire this financial year (2025/26). Through our focused and expansive acquisition of key port equipment such as new rubber-tyred gantry (RTG) and ship-to-shore (STS) cranes, we have optimised the operational efficiency and competitiveness of our terminals.
Other initiatives that have been rolled out to improve performance efficiency across our terminals, include the addition of a fourth shift to enhance employee wellness, suitable for a 24-hour operation, and the introduction of a performance-based incentive scheme as well as real-time performance.
Rail Reform
Driven by the critical need to transform the country’s rail network into a modern, competitive and efficient backbone of the economy, we are proud of the significant progress made on the rail reform front. Following the first Network Statement and Tariff Determination published in December 2024, we have opened the Transnet rail network to 11 train operating companies (TOCs). It is anticipated that the new TOCs will carry an additional 20 million tonnes of freight per annum from the 2026/27 financial year. Over time, the introduction of the private TOCs will drive drown the costs of logistics and improve service delivery.
The Rail Policy encourages rolling stock investment by the operating companies and the establishment of the rolling stock leasing companies by both state-owned companies and private entities. To take advantage of this opportunity, Transnet is at an advanced stage of issuing Request for Proposal (RFP) for the establishment of a rolling stock leasing company (LeaseCo).
The establishment of the LeaseCo is an important pillar of the country’s rail reform agenda. LeaseCo will drive the acquisition, management and leasing of rail rolling stock to domestic and regional markets. Unmet freight demand in the domestic and regional markets due to a significant shortage of rolling stock presents opportunities for leasing.
Government support
Government support in the form of guarantees enables Transnet to accelerate the implementation of its strategic initiatives and fundamentally strengthen its financial stability. It provides an impetus for Transnet to achieve its objectives with greater assurance, ultimately benefiting all our stakeholders. By bolstering our financial stability, this financial support provides us with the necessary flexibility to meet our debt servicing obligations.
We will leverage from the National Treasury’s Budget Facility for Infrastructure (BFI) to address funding challenges within our capital investment programme by aligning large-scale infrastructure projects with national economic priorities. In this regard, we welcome the National Treasury’s approval of our BFI application for the rehabilitation of rail infrastructure in the iron ore and coal corridors.
We have submitted similar requests to the BFI for other key infrastructure projects, and we are confident that these submissions will receive favourable consideration.
Strong collaboration
Strong collaboration with government, our customers and industry broadly is the primary driver of our recovery and long-term stability. Working together with all of our stakeholders has introduced new levels of innovation and renewed vigour into our transformative initiatives. Together, we are not just solving immediate problems; we are co-creating resilient solutions designed to deliver value for years to come.
One of the highlights in this financial year was the launch of the launch of the 200th locomotive, marking a significant milestone in Transnet’s efforts to modernise and expand our rolling stock capabilities. This is a more recent demonstration of the benefits of strategic collaboration with original equipment manufacturers (OEMs) as we re-establish reliable fleet availability. Our partnership with Alstom in the 23E locomotive manufacturing programme boosts the South African freight rail network through a consistent supply of modern locomotives.
Increasing locomotive availability underpins R4G Strategy’s focus on operational excellence, capacity enhancement, and customer centricity. It supports our determination to pursue excellence, growth sustainability, while advancing local manufacturing capability.
Conclusion
As we edge closer to the end of the financial year, the targets we have set for ourselves demand more focus and determination. At the half-way mark, there is evidence that our efforts are beginning to manifest in our financial performance. We have navigated the most challenging part of our transition journey; we must now ensure that the gains we are making are sustainable and are reflected in the bottom line.
When Transnet Works, South Africa Thrives.
Dr Sangqu is the Chairperson of the Transnet SOC Ltd. Board of Directors
