As South Africa’s freight rail industry anticipates a seismic shift, with projected cargo volumes climbing by 250 million tonnes by 2030, Transnet Engineering (TE) is repositioning itself at the forefront of this transformation. With its unmatched engineering pedigree and infrastructure footprint across Southern Africa, TE has set its sights on becoming the dominant player in rolling stock maintenance, manufacturing, and refurbishment. Targeting 80–85% of the domestic maintenance, repair and overhaul (MRO) market.
The company employs 7,894 people across its operations and recorded a revenue of R10.65 billion in the 2024 financial year. TE’s current asset base stands at R2.6 billion.
At its Industry Day held on 12 May 2025, TE laid out its strategic roadmap to secure this leadership position through operational reinvention, technical innovation, and public-private collaboration. Capitalising on the momentum generated by South Africa’s ongoing rail reform and the opening up of the rail network to third-party operators.
Transnet Engineering’s Vision for Growth, Innovation and African Rail Reform
Driving Growth Through Market Opportunity
The expected growth in freight rail demand, driven by the national logistics crisis response and modal shift aspirations, requires a significant expansion in rolling stock capacity. Both Transnet Freight Rail (TFR) and emerging third-party Train Operating Companies (TOCs) will need new locomotives, wagons, and coaches, as well as access to specialised maintenance and repair services. This evolution represents more than just a logistical challenge; it is a multi-billion rand opportunity for TE.
Currently an Original Equipment Manufacturer (OEM) for a broad range of assets, including wagons, coaches, the Trans Africa Locomotive (TAL), trailers, skips, and emerging port hauler designs, TE is evolving to meet this surge in demand. It is already investing in product development aligned with the needs of new and established operators and is positioning itself as the technical partner of choice for South Africa’s soon-to-be-established LeaseCo entity under Transnet.
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TE’s Strategic Edge
TE’s market strength is underpinned by a set of unique competitive advantages that position it as a leading OEM and technical service provider in Africa. Its strategic regional positioning is reinforced by well-established facilities located near South Africa’s primary rail corridors and ports, enabling efficient cross-border support and logistics integration.
TE maintains strong commercial relationships with suppliers and customers both within South Africa and across the SADC region, forming the backbone of its sustained business resilience. As one of Africa’s few fully integrated OEMs for rolling stock, TE offers end-to-end engineering capabilities, from design to final assembly, across locomotives, wagons and related components.
This is backed by a strong culture of innovation and intellectual property development, as exemplified by the Trans Africa Locomotive and a pipeline of R&D initiatives tailored to the continent’s logistics challenges. The company’s established reputation and certification credentials include recognition as a certified OEM in Africa and compliance with ISO, AAR, and EN15085 standards, enhancing its credibility in global supply chains.
Operationally, TE benefits from a robust management and quality system infrastructure, including the Transnet Integrated Management System (TIMS), a dedicated SHEQ function, and an SAP-based ERP platform. Supported by widely implemented Standard Operating Procedures (SOPs) to ensure consistent service excellence.
Unlocking Value Through Public and Private Collaboration
Key to TE’s strategy is leveraging partnerships with OEMs, private operators and suppliers through joint ventures and concessions. These partnerships enable technology transfer, build internal skills and generate cost efficiencies. Creating mutual value while strengthening TE’s market competitiveness.
Examples of such collaborations include apprentice programmes that contribute to rail skills development, job creation across the country, and joint engineering solutions for both rail and port infrastructure. These partnerships are central to TE’s ambition to be not only a leading service provider but also a national catalyst for industrial growth and technical transformation.
Capitalising on Rail Reform and Infrastructure Expansion
With South Africa’s rail sector opening to third-party operators and infrastructure demands rising, TE is leveraging three key opportunity areas. Firstly, TE is scaling up its rolling stock manufacturing and refurbishment capacity to meet the projected freight growth. Secondly, the company is preparing to offer maintenance and repair concessions, either directly or through partnerships for TOCs requiring specialised services and train preparation support. Thirdly, TE is actively contributing to both rail and port infrastructure development. This includes supplying components for the rail track network (such as rail clips and bridge check plates), manufacturing port equipment like mooring hooks and staircases, and developing new technologies like auto-lubrication systems and remote monitoring tools for predictive maintenance.
Expanding Product and Service Offering
TE’s eight core businesses reflect the scale and diversity of its engineering operations:
- Locomotive Business: Full maintenance, repair, upgrade, and new manufacturing of diesel-electric and electric locomotives.
- Wagon Business: Design and OEM manufacturing of wagons, including rebuilds and refurbishments.
- Coach Business: Manufacture and upgrading of trailer and motor coaches.
- Ports Business: Maintenance and manufacture of port infrastructure and equipment.
- Wheels Business: Assembly and machining of new and refurbished wheelsets.
- Rolling Stock Equipment: Component repair and manufacture for rolling stock.
- Rotating Machines Business: Overhaul of electrical and mechanical machines for traction systems.
- Foundry Business: Component casting for bogies, bolsters, wedges, and more.
TE has the capacity to assemble and manufacture over 300 locomotives, 4,500 wagons, 450 coaches, 200 trailers, and 300 skips annually. This capability, supported by facilities in six centres across South Africa, underpins its strategic advantage in both capacity and responsiveness.
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Digitalisation and Advanced Engineering
TE is not only focusing on physical engineering but is also moving aggressively into digital and advanced manufacturing. The company has developed internal capabilities in:
- Internet of Things (IoT) for real-time monitoring
- Predictive analytics and data platforms to enable proactive maintenance
- Machine learning to optimise engineering processes
- Human-machine interfaces, including augmented and virtual reality
- Advanced materials, enabling lighter and more efficient designs
- Additive manufacturing (3D printing) for rapid prototyping and small-batch part production
Strategic R&D projects include the Port Hauler, Rubber Tyred Gantry (RTG) Energy Storage System and the Standard Gauge Wagon Bogie. These developments align with TE’s goal to lead in next-generation rolling stock and port equipment, addressing both South African and regional needs.
Transnet Engineering - Procurement At The Centre Of Rail Recovery
Strategic Alignment with National Priorities
TE’s transformation aligns with broader government efforts to revitalise logistics performance, industrial capacity, and job creation. By increasing local content, enhancing exports through rail-port integration, and investing in greener, more energy-efficient technologies, TE supports key policy outcomes related to localisation, climate resilience, and inclusive economic development.
With the upcoming introduction of third-party operators on the national freight rail network, TE is poised to expand its customer base to include private freight operators, regional railways, and state-owned transport bodies across the SADC region.
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Reinventing for Global Competitiveness
To meet these ambitions, TE has embarked on an internal reinvention programme aimed at achieving world-class engineering excellence. This includes process optimisation, enhanced quality assurance, customer service transformation, and the integration of digital tools for remote diagnostics, lifecycle monitoring, and fleet optimisation.
With the technical legacy of projects such as the Blue Train and Phelophepa Health Train, TE is now building the foundations for its next era, where digitalisation, innovation, and integration define its value proposition.
Looking Ahead
Transnet Engineering’s 2025 Industry Day made one thing clear: the future of rail in South Africa and beyond depends on infrastructure and rolling stock availability and the capabilities of industrial partners who can deliver at scale, with precision and innovation.
As TE positions itself as the hub for rolling stock development, maintenance and advanced engineering in Africa, its success will be judged by more than just production figures or contract wins. It will be defined by its influence on logistics performance, industrial competitiveness and the region’s technological progress.
