A private rail operator can insure every locomotive and wagon it owns yet still suffer a serious loss without damage to any of them. All it takes is a critical route becoming unavailable.
Opening South Africa’s rail network to private operators should bring more freight onto rail. It will also bring more operators onto infrastructure they do not control.
We have seen how long a damaged line can remain out of full service. Flooding closed part of the Cape main line between Worcester and De Doorns in July 2024. According to Transnet, it returned to full capacity only on September 6 after work that included stabilising embankments and rebuilding sections of track. An operator planning a service on a critical route must consider what a closure of that length would mean for its customers and revenue.
The Transnet Rail Infrastructure Manager (TRIM) directs the restoration of services and may offer an alternative train path where possible. But another path may not suit the cargo or be available when several operators need it. One closed section can disrupt more than one timetable.
The effect does not end with the trains. A mine may miss a shipping window. A manufacturer may be waiting for material needed on a production line. Behind those schedules are people trying to keep orders, shifts and deliveries on track. The rolling stock can remain undamaged while the consequences extend much further.
A damaged track is not the only way a route can become unavailable. A signalling failure could also stop trains while the operator’s assets remain intact. Operators need to examine the sections of the network their services depend on and what alternatives they would have if one fails.
The published rail access agreement adds a contractual question. It limits claims between the infrastructure manager and an operator for economic losses, including lost turnover and profit. Operators should check the wording of their own signed agreements and establish which losses they may have to carry themselves even when a failure occurs on infrastructure outside their control.
Insurance arrangements also need attention well before services start. Under the published agreement, operators must provide insurance certificates and policy documents three calendar months before their service commencement date. TRIM may assess whether the cover is adequate and require shortcomings to be addressed.
The assets present further questions. If several locomotives and wagons are stored together, a single fire or flood could damage all of them. Where they are financed, the basis on which a policy values them should be checked against the lender’s requirements and the cost of replacing them.
There is good reason to welcome more freight on rail. But before an operator signs up to a route, it needs to understand what can stop that route working, what the contract leaves it responsible for and how it will meet its commitments to the businesses and people waiting at the other end.
