South African railway reform faces major challenges

Significance

Reforms to network industries, particularly of the rail and port parastatal Transnet, figure prominently in President Cyril Ramaphosa’s economic recovery plans. There has been progress in this direction but efforts to encourage private-sector participation in rail freight infrastructure and services, as well as ports, have been criticised for being unduly restrictive.

Impacts

• The willingness of third parties to take up slots for access to freight corridors will be an important indicator of reform progress.
• Successful prosecutions of former Transnet executives will be key to upholding the credibility of Ramaphosa's anti-corruption efforts.
• The impact on exports from dysfunctional freight rail services will negatively affect South Africa's balance of payments.