A UAE-based rail logistics company is seeking to enter South Africa’s freight rail market as Transnet opens its network to private operators under its third-party access framework.
African Rail Company (ARC) is raising approximately $170 million (R2.8 billion) to purchase locomotives and wagons for operations on South Africa’s freight rail network.
According to Bloomberg, ARC is among the 11 private operators that have received conditional access to the Transnet rail network as part of the state-owned company’s move to end its monopoly over the services.
Potential investors in the fundraising drive include private equity firms, mostly from the Middle East, shipping companies and development finance institutions. The funding is structured as roughly 30% equity and 70% debt. However, ARC has not yet named any specific investors.
ARC plans to procure approximately 15 locomotives and 250 wagons over the medium term. It aims to begin initial operations using existing and refurbished rolling stock, supplemented by leased equipment while awaiting delivery of new assets.
The company will operate on the fuel route linking South Africa’s northeastern border with Mozambique, as well as the corridor between Gauteng and the Port of Durban and the route transporting copper from mines in the Democratic Republic of Congo to the Port of Maputo in Mozambique.
Operations on the first rail corridors are targeted to launch between the third quarter of 2026 and the first quarter of 2027.
“This is not just about trains but more about fixing one of the biggest constraints on economic growth in South Africa,” Andrew Roberts, owner and director of Atlantic Forwarding, commented on LinkedIn.
“If this kind of private-sector involvement gains traction, it could reduce pressure on roads and ports, improve turnaround times and open up new logistics opportunities. The real question is, will more private players follow or is this just the beginning of a much bigger shift?”
Rail was the only viable overland solution for these corridors, ARC executive director Youssef Elgonaid said.
“South Africa is the same model applied to a much larger network. We expect to see similar patterns in South Africa, but on a much bigger scale than what we have experienced over the past decade.”
He added that ARC had spent more than a decade operating rail logistics in Mozambique, Zimbabwe and Botswana, where it has become the largest rail mover of diesel, petrol and other fuels.
