A technical task team will be established before year-end to finalise the approach to corporatising the Transnet Rail Infrastructure Manager (TRIM), which will involve its separation from the Transnet Group.

Confirmation of the task team and the timeframe for its establishment are outlined in the latest Operation Vulindlela report for the second quarter.

“Progress in corporatising the TRIM is behind schedule, and a dedicated TRIM Task Team is now being established to ensure stronger oversight from the Presidency, National Treasury, and the Department of Transport and adherence to the timeframes in the Guarantee Framework Conditions applied to Transnet,” the report states.

The TRIM, which is responsible for South Africa’s rail network, was established as a separate entity from Transnet Freight Rail (TFR) in October 2024 ahead of moves by government to open up the rail network to private train operating companies (TOCs) alongside TFR.

To date, 11 private TOCs have secured rail access agreements and some of them are anticipated to begin operating on their allocated slots from early 2027, while the fourth edition of the Network Statement was recently published to address concerns relating to the bankability of investments in rail operations.

However, TRIM’s full separation, alongside the establishment of a Transport Economic Regulator, is viewed as key to levelling the playing field in the longer term, as well as to positioning the entity to increase much-needed investment in the network.

The progress report for the quarter stated that the appointment of the Transport Economic Regulator Council is scheduled for February 2027, along with the migration of Ports Regulator staff.

The move to prepare the way for the separation of the TRIM also follows Cabinet’s recent approval of the establishment of an independent State-owned National Ports Authority (NPA), in line with the National Ports Act of 2005.

The transaction, which will involve the unbundling of the Transnet National Ports Authority (TNPA) from the Transnet Group, is to be implemented, the report states, in a manner that allows for an equitable assignment of liabilities between Transnet and the NPA, while ensuring the separated entity’s long-term financial sustainability.

Cabinet also endorsed a proposal that the feasibility of a minority equity partner from one of the country’s development finance institutions be investigated to support the funding of the transaction.

The TRIM and TNPA unbundling processes could take their lead from a process currently under way to unbundle the National Transmission Company South Africa from Eskom Holdings to facilitate its emergence as an independent Transmission System Operator (TSO), as envisaged in the amended Electricity Regulation Act.

The Operation Vulindlela report notes that the approval in August by President Cyril Ramaphosa of the Phase I report of the Eskom Restructuring Task Team (ERTT) is paving the way for the establishment of the TSO separate from Eskom.

“Progress continues as part of Phase II of the ERTT, with the development of a detailed implementation for the establishment of a fully independent TSO now under way,” the report states.

“Furthermore, a request for proposals for the appointment of a transaction adviser has been issued. The adviser will provide integrated financial, legal and tax advisory services to National Treasury in support of the transaction, ensuring that it is implemented in a manner that leaves Eskom no worse off than its current financial position and enables the TSO to make the required investment in expanding and strengthening transmission infrastructure.”

It adds that the Phase II report and detailed implementation plan are scheduled for finalisation in December.