South Africa's freight rail reform has moved from policy to implementation

In May 2026, the Transnet Rail Infrastructure Manager (TRIM) concluded access agreements and allocated access to eleven train-operating companies (TOCs).

Including Transnet Freight Rail, the number of rail operators is set to increase from one to twelve, across five strategic corridors. These allocations are expected to add 24 million tonnes of capacity, potentially rising to 52 million tonnes within five years. 

On 18 September 2026, TRIM published the final Network Statement Version 4 (NS V4) with the Rail Access Agreement (RAA), a Capacity Statement, and a KPI framework among the annexures. NS V4 read with the RAA extends the maximum contract term from 10 to 15 years, with an option to renew for another 15 years. It introduces lender protections, provides for a commercial remedy for prolonged force majeure and incorporates reciprocal penalty provisions.

These new provisions are summarised below. 

Force Majeure

A “force majeure event” is an event outside a party’s control that prevents it from performing. The RAA defers to the definition contained in NS V4. That definition covers unavoidable events or circumstances beyond the affected party’s reasonable control, and expressly includes vandalism, theft (including cable theft and vandalism of any part of the network), derailments and national energy shortages. 

If an operator is affected, TRIM may reallocate that operator’s train paths temporarily but will return the train path to the operator once the event ends. If TRIM is affected, it will offer an alternative path to the operator. If it cannot offer an alternative path, or the operator declines the proposed alternative path, TRIM refunds the path fee to the operator. 

If force majeure prevents TRIM from providing all or most of its services for more than six months, the parties must attempt to renegotiate the agreement. If they cannot agree, an independent expert will be appointed in terms of the dispute resolution clause. Either party may terminate the agreement on 60 business days' notice, but only if the expert finds no reasonable, workable fix.

Theft and vandalism are common on the network. TRIM itself reports around two security incidents a day on its North Corridor. Because these events can count as force majeure, operators carry much of the risk. The key battleground is likely to be whether TRIM took reasonable steps to secure the line.

Penalties

NS V4 records that TRIM, in consultation with the Department of Transport, is developing a penalty framework. Its purpose is to improve operational performance and contractual compliance.

The framework will be introduced in stages. During the transition, performance will be measured and reported, benchmarks set and measurement systems built. Until the full framework is approved, the only financial penalties are those set out in the RAA itself, and TRIM must give three months' notice before any new penalty applies.

For now, TRIM’s own exposure to penalties is limited. TRIM is only liable if it departs from the contracted train path allocation or cancels a path for reasons other than force majeure. In those cases, TRIM must offer a replacement path. If the operator declines it, TRIM credits the full train path fee to the operator, subject to the RAA’s limitation of liability clause.

Lender protections

Under clause 36 of the RAA, TRIM agrees to conclude a direct agreement with the operator's lenders on terms reasonably acceptable to TRIM. If that direct agreement allows lenders to substitute a replacement operator, TRIM must approve or reject the proposed substitute within 30 business days. The substitute must meet the full access requirements in Chapter 3 of the Network Statement. 

The operator may cede its agreement to its lenders as security for its finance obligations (a cession in securitatem debiti). TRIM approval is not needed for this. Clause 37.1 of the RAA, which otherwise prohibits any cession, transfer or encumbrance without TRIM's prior written approval, expressly excludes it. 

The protections apply only to third-party debt financiers. Loans from the operator's own shareholders are excluded. The finance documents include facility, security and hedging agreements used to fund the operator's assets, including rolling stock.

Regulatory aspects 

The National Rail Bill is the centrepiece of the reform programme. According to the Department of Transport, the Bill is currently being finalised for submission to Cabinet. The Bill is expected to turn policy commitments into statutory obligations. 

NS V4 incorporates the terminology of the the Economic Regulation of Transport Act, 2024 (ERT Act). However, the provisions that would give the ERT Act practical effect have not yet been proclaimed. This includes Chapter 2 (rail access), Chapter 3 (price regulation and complaints) and Chapter 5 (enforcement). 

There are several sections of the Railway Safety Act 2024 awaiting proclamation. 

Until these pieces of legislation are fully enacted, Transnet remains in control of the network. Clients who are active in freight logistics, mining, agriculture and infrastructure investment should monitor these developments closely.

Byron O'Connor is a Director and Co-Head of Insurance at Deneys. A dispute resolution lawyer, he represents insurance clients and rail carriers, and has experience in policy interpretation and response, subrogated recoveries, rail accidents, personal injury claims, and commercial disputes. Kriyanka Reddi is a Senior Associate in the Deneys insurance litigation team, focusing on insurance litigation, personal injury claims and delictual actions.