The South African government is working to fix the country’s rail and port services, aiding local carmakers in the process.
The nation’s dysfunctional transport infrastructure has been one of the main problems afflicting the automotive industry, leading to supply chain issues and enormous operating expenses that have compromised the ambitions of several companies.
Long overdue
In his 2025 Budget Speech, Minister of Finance Enoch Godongwana highlighted that the transport sector has gazetted 20 projects valued at R126 billion.
This includes various upgrades for roads managed by the South African National Roads Agency, as well as the Small Harbours Programme, which aims to revitalize and develop ports in the Western Cape, Eastern Cape, and KwaZulu-Natal.
Importantly, the Budget Plans also mention Project Ukuvuselela, which was gazetted in 2022 and is scheduled to be operational by 2026.
The ongoing project aims to significantly revamp the high-capacity freight rail line from Gauteng to the Eastern Cape, which is a vital tool for South Africa’s original equipment manufacturers (OEMs).
Three of the country’s legacy OEMs – Nissan, Ford, and BMW – have factories in Gauteng, and historically relied on the country’s rail network to receive shipments and move their finished products to the ports along the coast.
What’s more, Ford owns an engine facility in the Eastern Cape, and VW, Isuzu, and Mercedes-Benz all have factories in the province, meaning that both provinces are incredibly important to the local automotive industry.
According to the Budget Speech report, Project Ukuvuselela will be a catalyst for a R16-billion investment from Ford Motor Company South Africa to expand its plant in the City of Tshwane, and it will also facilitate an upgrade to the port of Gqeberha (formerly Port Elizabeth).
“The project aims to stimulate the automotive industry, which has been negatively affected by capacity constraints in the port of Durban and poor performance on the Container Corridor rail link,” reads the report.
The line itself is an expansion of the existing SouthCor rail infrastructure, which runs from Waltloo and Kaalfontein in Gauteng through the Free State all the way to Gqeberha.
In addition to the long-term benefits of the project, the construction of the improved rail corridor and ports is expected to create around 10,000 short-term jobs.
A necessary step
South Africa’s dysfunctional railways and ports are currently ranked among the worst in the world, which has been detrimental to the automotive industry.
Companies like Ford have been forced to fly in parts in order to circumvent Transnet’s sluggish ports and maintain their production schedules, racking up massive operating costs in the process.
These delays and added costs have taken their toll on South Africa’s OEMs, which are no longer competitive with their sister facilities overseas.
VW South Africa previously explained that its parent company would rather invest in other African markets like Ethiopia due to the problems with operating here, among them the railways and ports, and other OEMs are facing similar pressures.
“The efficiency of our ports in South Africa continues to pose a huge challenge to our planned production schedules and in ensuring we are able to meet our business objectives,” Isuzu previously told TopAuto.
Addressing this problem will therefore go a long way towards protecting the local industry, and ensuring that it continues to receive investment for future expansions, creating more jobs in the process.
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