18171740 - pretoria, south africa - september 9: metrorail train depart from central station in pretoria on september 9, 2009. pretoria is the executive capital of south africa.

18171740 - pretoria, south africa - september 9: metrorail train depart from central station in pretoria on september 9, 2009. pretoria is the executive capital of south africa.

Africa / Business / Travel

New hope in Africa’s railways

By Nicholas Newman

Pretoria, South Africa- steam train about to depart from capital park station in Pretoria

A new revolution in African railways is starting to take place, we are seeing major railway equipment manufacturers and leasing companies begin to focus on the continent. For many some as a new land of opportunity see it. Amongst the companies taking an active interest in the region, including funds such as Alpha Wealth and Pembani Remgro Infrastructure Fund, together with leading train manufacturers such as General Electric and Bombardier.


It has been estimated by South Africa’s Standard Bank that Africa will need to increase its rail network by at least 4000km at a cost of a least $50bn in new investment of the next decade. On top of this, there will be substantial costs for providing rolling stock including locomotives, freight wagons, passenger coaches and signaling over the next decade to develop 4 000km of additional rail infrastructure. Currently, 80 percent of Sub-Saharan Africa’s rail network is located in South Africa, reports South Africa info June 2016. However, Transport analyst Andrew Marsay notes that “there are very few viable railways in Africa apart from the high-volume iron ore lines,“  And adds, “So if a company is supplying rolling stock, it needs to think hard about how it is going to get paid.”

New investment projects

There are a number of new investment projects taking place in Sub- Sharan Africa, these include traditional mining railways, general freight and even investment in passenger services.

In Kenya, a new 609km standard gauge railway is being built from Mombasa to Nairobi at a cost of some $3.8bn, with completion due in 2019. China’s Exim Bank is providing 90 percent of the finance, with the rest from the Kenyan Government. This railway is planned to be extended eventually to Kampala in Uganda at some future date. The railway line is designed to carry 22 million tonnes a year of cargo or a projected 40% of Mombasa Port throughput by 2035. Just like in Britain with HS2, it has faced opposition from various stakeholders including the road lobby.


In the Zambia, for instance, South Africa’s logistics company Grindrod  Ltd is working with Zambia’s Northwest Rail Company to operate and maintain a new 590km railway from the Zambian copper belt to the Angolan border, at a cost of about US$1bn.


Further south, South Africa has completed a new regional passenger service, the successful $3.6 billion Gautrain Rapid Rail Link project in Gauteng that links Johannesburg with Sandton and Pretoria, which opened in 2012. The Gautrain has had a significant impact on improving rail services in the region, with the high-speed trains are supplied by Canada’s Bombardier Transportation.

New trains being ordered


Railroad station serving the Cullinan diamond mine in South Africa.

One of the largest orders made in Africa recently was by South Africa’s state-owned Transnet. in March 2014, Transnet announced a R50bn ($4.26bn) contract with four manufacturers to build a fleet of 1,064-strong freight engines. China’s rolling stock manufacturers China North and South Rail won the lion’s share of the contract, followed by Bombardier Transportation and General Electric as key tenders. The locomotives are to be a mix of electric and diesel locomotives. CSR Zhuzhou Electric Locomotive will be supplying 359 electric locomotives and Bombardier Transportation 240. In addition, GE Transportation will supply 233 diesel locomotives, and CNR Rolling Stock 232. The majority of the locomotives are destined for Transnet freight services and are to be assembled in South Africa, with over 50 percent of the components made in the country, reports Railway Gazette November 2014.


This order is part of efforts to modernise its rail services and increase rail traffic from just 200 million tons in 2012 to 350 million tons by 2019. In 2013, about 71 percent of the 734-million tons of freight moved in South Africa was moved by road, according to a PWC report. Currently, heavy haul rail services like coal and iron ore currently carry nearly 100% of South Africa’s heavy minerals for export. It is in the area of general freight that there is room for growth. In 2013, for instance, 5.2 percent of containers were moved by rail reports Statistics South Africa 2016.

New manufacturing capacity

As part of South Africa’s attempts to develop, its own domestically produced rail supply industry. Transnet has six factories in SA, where it has the capacity to manufacture 4,000 new wagons and refurbish 3,000 wagons a year. Transnet Engineering also has the capacity to build more than 500 locomotives and refurbish 300, reports Transnet website June 2016.


In addition, Transnet is seeking new business opportunities elsewhere in Africa, it already operates for clients such as Rio Tinto in Mozambique operations, Botswana Rail, Corredor de Desenvolvimento do Norte and Central East African Railways, which operates in Mozambique and Malawi. It has on its order books around R3bn worth of contracts are in the bid stage to supply wagons and passenger coaches to various African countries, reports Business Day June 2016.

In addition, General Electric is looking to lock in expected volumes of around $4 billion across the continent over the next five years and use the South Africa rail transport group Transnet as a platform for growth, reports Biznews June 2015.


The company is building locomotives for Mozambique and Angola in partnership with Transnet, from its vast Koedoespoort factory, just outside Pretoria. Already Angola has ordered 100 and Mozambique 150 new locomotives from GE. In addition, more orders are likely to come from Democratic Republic of Congo and Nigeria in the near future, suggest industry insiders, reports the Financial Mail June 2016.


However, like much of Africa’s economy, what is holding back its development is access to affordable capital, well-coordinated planning and a shortage of the right skills to develop the industry to meet the needs of the continent.

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