Grindrod’s first test train has successfully completed a round trip between Belfast and Komatipoort as part of South Africa’s open-access rail programme.

Grindrod Rail’s new CEO Siyanda Mba says the empty train departed from Komatipoort on November 1 and returned on November 2 with 2 991 t of freight on board.

The commercial service will, once operational, support the railing of coal to the JSE-listed company’s Matola Terminal in Mozambique.

“The purpose of the test was to assess numerous factors that are critical to the granting of the rail permit, as well as rail operations,” says Mba.

“The test focused on understanding the rolling stock performance. This was done through an engineering simulation process carried out by Transnet Freight Rail (TFR) and Grindrod’s engineering team.

“The test also provided the Grindrod teams with a full understanding of the infrastructure, train operations and, importantly, the interface processes with all Transnet operating divisions and CFM [railways in Mozambique],” explains Mba.

“This was an important step as it assists in defining an effective operating model for all parties and the key levers that are required to provide value to customers.”

Mba assumed the role of CEO of Grindrod Rail on October 1. She has 25 years of rail industry experience, having spent most of her career at TFR.

Under South Africa’s new open-access rail programme, third-party train operating companies are allocated slots to run freight services on the national railway network owned by Transnet.

“This test train is also significant because it takes open access from policy into practical implementation,” notes Mba.

“There is still work to be done, but getting trains onto the network is how the industry starts building confidence in this new model.”

Grindrod plans to kick off commercial operations next year, following the successful completion of the test phase and the implementation of the required operating arrangements under the Rail Access Agreement (RAA) with the Transnet Rail Infrastructure Manager (TRIM).

Mba says the test run will also determine if the JSE-listed logistics group will be awarded a rail permit by the Railway Safety Regulator.

"Our priority is to establish a service that customers can rely on and that can scale over time,” she adds.

“Our entry into rail open access is deliberately phased. In the first year of operation, we plan to transport approximately 288 000 t using our two allocated slots a week – primarily coal from Mpumalanga to our Matola terminal in Mozambique.”

Mba says the plan is to then scale up based on what the group learnt from this initial phase.

The second step would be a third weekly slot, which would lift volumes to roughly 432 000 t/y, subject to the allocation of additional capacity and customer demand.

“For Grindrod, the opportunity lies in more than adding additional tonnage onto rail.

“It is about using rail to integrate and unlock efficiencies at our ports and terminals. That is the strategic opportunity – connecting the corridor more effectively and capturing value across the broader logistics chain for improved customer service.”

Rolling Stock Investment
In the first phase of commercial operations next year, Grindrod aims to deploy four locomotives and 50 wagons from its existing fleet to run two slots a week.

A third slot would require an additional 50 wagons, at a total cost of around R100-million. These wagons are already on order and expected to arrive in the first half of next year, says Mba.

The locomotives are drawn from Grindrod’s existing fleet.

“This is a disciplined investment in growth – deploying assets we already have while adding capacity as the opportunity grows,” says Mba.

“The pace of growth will ultimately be shaped by customer demand, corridor performance and the availability of additional slots. The opportunity is to prove the model, build confidence and then scale.

“Our immediate focus is on dry-bulk commodities that complement Grindrod’s existing ports and terminals footprint,” she adds.

“We are starting with coal, but, as the business and customers gain confidence in our service offering, the business will assess other dry-bulk cargo opportunities where rail can provide a competitive and efficient logistics solution.”

Mba believes that South Africa’s new open-access regime could potentially transform the country’s logistics system.

“It creates the opportunity to bring additional capacity and private investment into the freight rail network and, importantly, to improve the reliability and competitiveness of moving goods. There is a direct contribution to job creation and assisting South African communities.

“A more effective rail network strengthens the entire logistics chain and ultimately improves South Africa’s ability to move goods competitively to global markets.”