Transnet is expected to issue the request for proposal for its LeaseCo external partner selection process within days, as the group advances plans to establish a rolling stock leasing platform for train operating companies entering the network.
The platform is being developed to provide access to wagons and locomotives through leasing, rather than requiring operators to acquire rolling stock directly onto their own balance sheets. It is being designed to support both long-term rail slots and ad hoc access requirements.
According to the presentation given at the recent Transnet Rail Reform Programme Progress event, Transnet has identified more than 500 locomotives and more than 17,000 wagons for the initiative. The assets have been assessed and curated, with Transnet indicating that they are fit for purpose.
At least five train operating companies have already signed up to access rolling stock through the platform, even before the formal establishment of the private sector partnership.
The external partner selection process has started, with bidders already shortlisted. The RFP is expected to be issued to those selected bidders within days, after which the process will move through due diligence and financial close. This is expected to culminate in the establishment of a joint venture between Transnet and the selected private sector partner or partners.
Existing leases signed through the platform are expected to be seeded into the private sector partnership structure once it has been created.
The initiative is being advanced in two parallel phases. The first involves continuing to provide assets to customers so that operators can begin running. The second focuses on preparing the private sector partnership that will support the longer-term scaling of the platform.
Based on current discussions, Transnet estimates that there is already demand for more than 5,500 locomotives and more than 10,000 wagons. This demand is expected to increase over time as rail reform progresses.
The platform is intended to serve train operating companies, cargo owners, customers, investors, government and regulators. Transnet previously attempted to establish a similar platform, but the earlier process was not successful. The current approach follows a return to the drawing board and is being positioned around a broader ecosystem that includes Transnet’s rolling stock assets, engineering capability, operating experience, regional footprint and private sector participation.
The initiative is also being positioned beyond South Africa. According to the presentation, Transnet has engaged stakeholders across the region, including in Zambia, where rolling stock requirements were raised in relation to moving critical minerals from the Copperbelt to ports of destination.
For train operating companies preparing to enter the network, access to rolling stock remains one of the practical requirements for execution. The LeaseCo platform is being positioned as part of the operating infrastructure required to support South Africa’s rail reform process and wider regional rail growth.
Written by Phillippa Dean
