Finance Minister Enoch Godongwana’s 2026 Budget Speech places transport and logistics at the centre of government’s infrastructure-led growth strategy, identifying the sector as the largest component of planned public infrastructure spending over the medium term.
Public-sector infrastructure expenditure will exceed R1 trillion over the medium term. Of this, R577.4 billion will be spent by state owned companies and other public entities, R217.8 billion by provinces and R205.7 billion by municipalities. By sector allocation, transport and logistics account for the largest share.
Rail and Logistics Reform
The Minister acknowledged that persistent logistics bottlenecks and weak public infrastructure continue to weigh on economic activity. Government’s response includes dismantling constraints in rail and ports that have restricted exports and raised the cost of doing business.
The Budget confirms that government intends to bolster public-private investment in rail operations while retaining state ownership of rail infrastructure. The stated objective is to move goods faster, more cheaply and more reliably.
Freight Corridor Capacity
Through the Budget Facility for Infrastructure, R21.9 billion has been approved for five major projects. These include Transnet’s coal and iron ore corridor projects, aimed at restoring rail capacity to 77 million tonnes on the coal line and 60 million tonnes on the ore line.
Government also issued an infrastructure bond in 2025, raising R11.8 billion to support its contribution to the Budget Facility for Infrastructure-approved projects.
Passenger Rail and PRASA
The Passenger Rail Agency of South Africa will continue implementing its corridor recovery programme and modernising core infrastructure to rebuild a reliable and affordable rail service for commuters.
The Minister stated that this programme will enable annual passenger trips to increase from 77 million in 2024/25 to between 250 and 450 million over the medium term.
In addition, the Special Appropriation Bill includes R5.8 billion for PRASA’s rolling stock fleet renewal programme.
Gautrain and PPP Pipeline
Amendments to Public-Private Partnership regulations are intended to streamline procedures, close regulatory gaps and clarify institutional roles in order to enable greater private sector participation.
Currently, 63 PPP projects are at various stages of development. Among the advanced projects is the procurement of a new vendor for the Gautrain rapid rail link system, which the Minister described as progressing.
Six border post projects aimed at easing congestion, upgrading key inland border posts and lifting regional trade flows are also expected to reach financial closure later this year.
New PPP regulations for municipalities are scheduled for publication by 30 June 2026.
Road Infrastructure
SANRAL will focus on strengthening long-term network resilience, including annual maintenance of approximately 27, 000 kilometres of road and resurfacing of 2, 000 kilometres.
An additional R1.5 billion has been added to the provincial roads maintenance grant in 2026/27 to fund carry-through costs of disasters that occurred between April 2024 and June 2025.
Public Transport Network Grant
As part of targeted savings measures, the Public Transport Network Grant has been scaled down by about R8.4 billion over the next three years. The Minister stated that the grant has not improved access to public transport relative to the investments made, although it will continue to assist cities operating bus services with indirect costs.
Download: Budget Speech 2026
