Traxtion fires up SA rail

GAME-CHANGER: KICK-STARTS PRIVATE CAPITAL BOOM WITH R3.4BN INVESTMENT

- Ciaran Ryan

Private rail operator Traxtion will invest R3.4 billion in 46 locomotives and 920 wagons from KiwiRail in New Zealand which operates the same Cape Gauge environment used in SA.

The company says the investment is fully funded, with equity backing from Harith Partners, which owns 50.39% of Traxtion, along with debt funding from Absa.

A further R2.4 billion in future investment is planned as SA embarks on crucial reform of its railway network, allowing private operators to run on independently managed rail infrastructure for the first time in nearly a century.

At a media presentation on Tuesday, Traxtion CEO James Holley said this was the largest private freight rail investment in SA history and a direct response to the reform direction adopted by the government.

"Private capital flows when government policies create confidence in the private sector to invest. This investment is our vote of confidence in South African rail and in the reform momentum we are seeing," said Holley.

"Every additional locomotive we put to work lowers logistics costs, protects the road network, improves our environmental footprint and creates jobs in the upstream economy."

Rail reforms

The investment is a credit to the department of transport for the design of these reforms, Operation Vulindlela for driving them forward and the supporting role played by the National Treasury and independent regulator, said Holley.