Transnet Moves Ahead with Rail Leasing Company Plan

According to Transnet, the initiative is expected to support economic growth, improve logistics performance and create greater participation opportunities within the rail sector.

Transnet has taken another step in South Africa's rail sector reform programme by issuing a Request for Proposal (RFP) to two shortlisted bidders for the creation of a rolling stock leasing company known as LeaseCo. The development follows the completion of the Request for Qualification (RFQ) process launched in April 2025, which attracted 14 submissions from interested parties. The latest stage moves the project closer to becoming a reality and reflects ongoing efforts to build a more competitive and efficient rail freight industry. According to Transnet, the initiative is expected to support economic growth, improve logistics performance and create greater participation opportunities within the rail sector.

LeaseCo to address rolling stock shortages

LeaseCo is being established to acquire, manage and lease locomotives and rail wagons to operators in South Africa and across the region. The company is expected to play a key role in addressing the shortage of reliable rolling stock, which has become a major challenge for freight transport. The new entity will operate as an independently governed and commercially sustainable business. Its services will be available to both established and emerging Train Operating Companies (TOCs), helping them gain access to equipment needed to move goods efficiently across rail networks.

Transnet will contribute a dedicated fleet of rolling stock assets as equity to the venture. The company will also provide manufacturing and maintenance capabilities through Transnet Engineering, giving LeaseCo access to specialised technical expertise. The selected private-sector partner will hold a majority stake and will be responsible for bringing investment capital, operational expertise and industry knowledge to support fleet renewal and expansion.

Growing demand creates investment opportunity

Transnet Group Chief Executive Michelle Phillips said strong demand for freight rail services, combined with a shortage of available rolling stock, has created a significant opportunity for a dedicated leasing company. She described LeaseCo as a major initiative that can help modernise rail operations, attract private investment and improve the reliability of freight logistics across Africa.

Transnet has already begun engaging newly licensed Train Operating Companies to understand their equipment requirements. Five operators have already committed to using LeaseCo's services, providing an early customer base for the venture. Demand is expected to increase further as the Transnet Rail Infrastructure Manager (TRIM) allocates additional network access slots to rail operators, creating more opportunities for freight movement across the country's rail system.

The project forms part of broader reforms aimed at opening the rail sector to greater competition while strengthening supply chains and improving the movement of goods throughout South Africa and the wider region.