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Ramaphosa highlights the investment prospects being unlocked by 'irreversible' reforms

President Cyril Ramaphosa used the 2026 edition of the South Africa Investment Conference (SAIC) to highlight the new prospects being opened to domestic and foreign investors by the country's ongoing economic reforms, which he described as "irreversible".

The sixth edition of the SAIC drew 1 200 delegates from 50 countries and is the first such gathering to be hosted since 2023, as well as the first since the formation of the multi-party Government of National Unity, which Ramaphosa leads.

The President used the event to announce a new R2-trillion investment-pledge target for the period from 2026 to 2030, outlining opportunities across a diverse range of sectors but emphasising that the 'Three D's' of decarbonisation, digitisation and diversification would increasingly shape the country's industrial strategy.

He also reiterated government's claim that the first cycle, between 2018 and 2023, had yielded pledges of R1.5-trillion against a target of R1.2-trillion.

There remains much scepticism about the impact of those pledges, with critics pointing out that they failed to materially lift overall investment and employment levels over the period and that many of the projects were merely sustaining in nature.

Nevertheless, Ramaphosa used the previous SAIC gatherings to showcase South Africa as a viable investment destination even in difficult circumstances, with the first SAIC cycle having coincided with a period of extreme electricity disruptions, as well as the social and economic fallout associated with the Covid-19 pandemic.

"Even amidst these strong headwinds, the South African economy has maintained core financial and institutional stability," Ramaphosa said in his address.

Meanwhile, Trade, Industry and Competition Minister Parks Tau insisted that R600-billion of the R1.2-trillion that had been pledged at previous investment conferences had "flowed into the real economy".

FUEL PRICE HEADWIND?

Speaking this year against a backdrop of an impending fuel-price shock, which has been somewhat softened by a temporary R3/l reduction in the general fuel levy from April 1 to May 5, Ramaphosa acknowledged the growth and investment risks associated with unfolding geopolitical fragmentation, wars and trade tensions.

However, he argued that South Africa was in a position to offer investors a "favourable proposition as a resilient, credible and reform-oriented investment destination with strong fundamentals".

The reforms under way in electricity, freight logistics, water and infrastructure, he asserted, were also opening up new avenues for private sector participation in areas hitherto monopolised by State-owned companies.

Transport Minister Barbara Creecy listed several private sector participation opportunities arising in the freight logistics sector, including upcoming tenders for a manganese export corridor and terminal at the Port of Ngqura, in the Eastern Cape, and the container corridor between Gauteng and the Port of Durban, in KwaZulu-Natal.

Electricity and Energy Minister Dr Kgosientsho Ramokgopa, meanwhile, said South Africa was poised to invest more than R2-trillion on new generation linked to the Integrated Resource Plan for electricity and a further R440-billion on transmission infrastructure, some of which would be built through private independent transmission projects.

Finance Minister Enoch Godongwana added that the introduction of competition in the electricity and logistics sectors, together with other reforms, could help lift GDP growth from about 1.6% currently to above 3%, but that these reforms would succeed only if the macroeconomic fundamentals were also in place.

On that front, Godongwana highlighted an improving fiscal balance, ratings upgrades and a falling inflation rate.

He said market consensus pointed to the energy shock arising from disruptions to shipping in the Strait of Hormuz following the attack on Iran by the US...

National Rail Bill being prepared in bid to embed reforms – Creecy

Transport Minister Barbara Creecy reports that she intends seeking Cabinet approval for a new National Rail Bill during the 2026/27 financial year and that the Bill will aim to embed in legislation the reforms under way opening the sector to private participation.

The Bill would then be released for public consultation and be subjected to the Parliamentary processes required for legislative approval.

Creecy told rail industry stakeholders that such legislation was required to address any possible uncertainty about whether the reform process currently under way in the sector would be sustained under future governments.

These reforms were currently being guided by the National Rail Policy, which is facilitating an opening of the mainline network to the first private train operating companies (TOCs).

To date, the Transnet Rail Infrastructure Manager (TRIM), which has been vertically separated from the Transnet Freight Rail Operating Company, has identified 11 TOCs that have met the requirements to operate 41 slots on six corridors.

The first TOCs are expected to begin operating in April 2027 and should all 11 TOCs achieve financial close they are expected to add a combined 20-million tons of additional rail volumes.

"One of the questions that is very important in any rail reform process, or indeed in any reform process, is: how are we embedding the changes that we see now for the long term, and how certain can you be that, if there is a change of government, you would not be finding that this policy changes?"

"That is why we're in the process of developing The National Rail Bill, so that we will have a law to express the imperatives and the priorities of the National Rail Policy," Creecy told industry stakeholders on March 26.

"Our intention is to take this Bill to Cabinet during the financial year, and once Cabinet has approved, we will then Gazette the Bill for formal public consultation."

In the meantime, the network would continue to be opened to third-party operators in line with the National Rail Policy and supported by the reform programme being driven through Operation Vulindlela.

UPDATED NETWORK STATEMENT

Creecy said that the TRIM was also in the process of finalising an update to the Network Statement, which outlines the condition of the network, its capacity to accommodate TOCs, and the tariffs for accessing the network.

The intention was for the new 2026/27 statement to be in place for a two-year period to facilitate the introduction of additional TOCs, with the first statement having been published in 2024.

There were also moves under way to separate financing of operations from rolling stock so as to create an opportunity for new, less well-capitalised operators to enter the network using leased locomotive and wagons.

Transnet has indicated that it plans to establish a leasing company to provide rolling stock to TOCs and has initiated a process to shortlist possible private partners for such an entity.

While the Transport Economic Regulator was not yet in place, Creecy said interim regulatory capacity had been developed to approve the tariffs associated with accessing the network.

She, thus, urged stakeholders to comment on the content of the updated Network Statement when it was released, as it required the approval by the interim regulator ahead of implementation.

The introduction of TOCs was viewed as crucial to meeting the target of raising rail volumes to 250-million by the end of the decade, from about 160-million tons currently.

It is estimated that Transnet Freight Rail could recover its volumes to about 185-million, leaving 65-million tons for the TOCs to achieve.

Achieving those additional volumes would require rail securing more container volumes from road, a development that commentators say will be possible only if there is far better spatial planning to support a shift from road to rail.

Creecy said research by her department indicat...

With fuel prices set to rise steeply next week, South Africans are bracing for new affordability pressures, and debates are also raging about how the country should mitigate security of supply and external pricing threats. Terence Creamer discusses how these debates are playing o

Energy Council says 'phased transition' to State-owned TSO needed to mitigate risks

The Energy Council of South Africa has reiterated its support for the creation of an independent, State-owned Transmission System Operator (TSO), but has also called for a "phased transition" to mitigate the commercial and fiscal risks associated with Eskom's unbundling.

In a statement issued on behalf of the council's board, which is chaired by Sasol's Simon Baloyi, the council welcomed the creation by President Cyril Ramaphosa of a task team to develop an implementation roadmap for an independent TSO that would also own the transmission assets.

However, the council argued that the establishment of a new independent TSO was but one aspect to be considered in the roadmap, and outlined seven issues that should also be addressed, including:

The early creation of an independent Market Operator to ensure confidence, transparency and regulatory compliance with the licence conditions of the National Energy Regulator of South Africa;Independent grid planning and allocation for fair access;A bankable investment model to lower borrowing costs and attract private investment;The financial and operational stability at Eskom during its unbundling, including full transfer of fixed assets, and management of loan covenants and maturities;Meeting the Electricity Regulation Amendment Act (ERAA) deadline of January 2030;Minimising fiscal risks, especially those arising from municipal debt and stranded asset costs of aging, high-cost coal stations; andEnsuring that all entities (new and old) were well-governed, resourced, and competitive in a future liberalised market.

It also called for a holistic analysis of Eskom's unbundling, floating a proposal for the "early establishment of a new State-owned TSO entity in law, followed by the separation of transmission assets through an independent State-owned National Transmission Company South Africa (NTCSA) as a dedicated transmission owner and operator".

"These are viable options that will meet the reform objectives, the ERAA requirements and give improved system and risk benefits," the statement reads, without providing any timeframes for the proposed phasing.

In his February 12 State of the Nation Address (SoNA), Ramaphosa said the TSO should own the transmission assets, contradicting an earlier Eskom Holdings proposal for NTCSA to retain the assets and remain a subsidiary.

He also set a three-month deadline for the task team to address issues relating to the restructuring process, including setting timeframes for its phased implementation.

In response to the statement, Professor Anton Eberhard, of the Power Futures Lab at the University of Cape Town's Graduate School of Business, said it was unclear whether the council was supportive of the establishment of the TSO, with the transmission assets, within the five years stipulated in the ERAA.

In addition, the proposal by the council for the early creation of the TSO, but with a separate ongoing NTCSA holding onto transmission assets and operations, contradicted both the ERAA and the President's SoNA statement.

"Asking stakeholders, especially Eskom, to commit to at least an outer timeframe for the unbundling of the transmission assets into the TSO, is a litmus test of their commitment to restructuring the power sector – it's what will take us forward.

"In contrast, a continued refusal to commit publicly to a timeframe is taking us backwards, with profound consequences for competition, investment and future security of supply.

"This reluctance leads to the not unreasonable suspicion that Eskom's actual commitment to full unbundling is less than resolute.

"It's thus baffling that the Energy Council is not more robustly defending the interests of its non-Eskom members," Eberhard said.

Launch of SAWEM delayed, but NTCSA says preparations are well advanced

The National Transmission Company South Africa (NTCSA) has confirmed that the target date of April 1, 2026, for the launch of the South African Wholesale Electricity Market (SAWEM) will not be met, and has announced that the launch has been delayed to the third quarter of 2026.

The delay is not unexpected, and followed an assessment undertaken with the National Energy Regulator of South Africa (Nersa) and industry participants, where it was concluded that additional work was required to ensure that all market, operational and regulatory requirements were fully in place ahead of the launch.

"The introduction of the wholesale electricity market, when all requirements are ready and met, will represent a significant step forward for South Africa's energy sector," NTCSA CEO Monde Bala said in a statement, adding that adjusting the implementation timeline ensures that the market is introduced responsibly.

"We are laying the foundation for a more efficient, transparent, and competitive system that, over time, will support lower electricity costs and attract the investment needed to ensure long-term energy security," Bala added.

The NTCSA, which was granted a Market Operator licence in December, has confirmed with Engineering News that the Market Code was formally submitted to Nersa for approval on February 25.

The Market Code is a key document, as it defines the rules by which the electricity market will operate and sets out how electricity can be bought and sold between different participants in the market, including generators, traders and large customers.

The draft code has been developed by the NTCSA in collaboration with a wide range of stakeholders and the regulator is now expected to follow its normal approval process, which includes reviewing the document and allowing stakeholders to provide comments before deciding on the final Market Code.

In the meantime, the NTCSA tells Engineering News that preparations for the market are continuing, with a phased approach being followed to allow systems and processes to be tested under real operating conditions while the regulatory process is completed.

"The initial phase will focus on establishing operational readiness and testing the trading systems and settlement processes.

"As the regulatory framework is finalised, the market will progressively open to independent generators, traders and other participants, expanding competition and participation in the electricity sector," the NTCSA explained.

It is also obligatory for participants in the market to have participated in the so-called 'SAWEM School' training programme, which has been set up by the NTCSA to prepare the electricity sector for the market.

"Since its launch last year, more than 750 people from across the electricity industry have completed the programme, including representatives from utilities, independent power producers, traders and large electricity users."

Diesel disruptions and early hikes point to possible gap in pricing framework

Government and the liquid fuels industry insist that recent disruptions to diesel supply in parts of South Africa are not related to a physical shortage of the fuel in the country.

However, the Department of Mineral and Petroleum Resources (DMPR) and the Fuels Industry Association of South Africa say that ongoing reports of shortages, as well as price hikes ahead of the monthly adjustment date, have exposed a possible vulnerability in the way the diesel price is set that needs attention.

While the price of petrol is fully regulated, diesel prices are not, with the DMPR publishing a monthly reference price for diesel as a guideline. As a result, wholesalers and retailers are free to set their own selling prices, resulting in differing prices from one site to another.

With indications that the diesel price could rise by well over R9/l next week based on an analysis of the current under-recovery on the fuel using the Basic Fuel Price (BFP) formula alone, there are reports of pre-buying by individuals and enterprises seeking to beat the hike.

However, there are also reports that retail prices have been adjusted upwards at some service stations, as well as commercial buyers being quoted far higher prices to receive diesel on contract.

HIKES ANNOUNCEMENT ON FRIDAY

On Friday, March 27, the DMPR will announce a new reference price for April covering various diesel grades, alongside the new prices for various grades of petrol and illuminating paraffin, as well as a maximum retail price for liquefied petroleum gas.

Based primarily on oil price and exchange rate dynamics, which have moved sharply as a result of the attack on Iran by the US and Israel and subsequent disruptions to shipping in the Strait of Hormuz, the BFP formula administered by the Central Energy Fund (CEF) points to material under-recoveries in March.

The most recent CEF daily report shows an under-recovery on 'Petrol 95' of R5.72/l and R9.81/l on 'Diesel 0.005%'.

However, the BFP is not the only factor, given that a significant portion of what consumers pay at the pump is made up of taxes and regulated costs.

In March, a litre of Petrol 95 purchased in Gauteng cost R20.30/l, with levies and taxes comprising R11.64/l and the BFP R8.66/l.

Levies are also set to rise in April following recent adjustments to the General Fuel Levy, the Carbon Fuel Levy and Road Accident Fund Levy in the February Budget. Unless there is an intervention to delay the introduction of these levies by the Finance Minister, these will add a further 21c/l in April.

Should all the adjustments be included in April, fuel prices will rise to levels last seen in mid-2022, after Russia invaded Ukraine, when Petrol 95 rose to above R26/l.

However, Fuels Industry Association of South Africa CEO Avhapfani Tshifularo acknowledges that recent developments in relation to diesel have also pointed to "artificial demand" having been created as consumers moved to beat the price increases.

Some retail suppliers, meanwhile, have reportedly used the space created by the fact that diesel is not regulated to hike prices ahead of the adjustment date.

In addition, some commercial customers, who buy diesel on contract, have reported being quoted prices well above the guideline during the month of March, and with hikes implemented well ahead of the April adjustment.

GAP EMERGES?

Under the current system, short-term losses experienced by suppliers in a particular month are meant to be addressed through the 'slate account', a mechanism that keeps track of these gains and losses and recovers or refunds these amounts through a 'Slate Levy' added to the fuel price.

Tshifularo says because the system is premised on monthly adjustments, the intra-month hikes being reported could result in "double dipping".

"It's a gap in relation to diesel that I think needs to be looked at closely to ensure that the slate mechanism is able to deal with these kinds o...

Transnet expects to report rail volumes of 168 Mt in 2025/26, with reforms key to meeting 250 Mt goal

Transnet is expecting to report rail volumes of about 168-million tons for the 2025/26 financial year, above the 160.1-million tons of the prior year but below the "stretch target" of 180-million tons set for the period.

Briefing the Standing Committee on Public Accounts days before the State-owned company's March 31 financial year-end, CEO Michelle Phillips said the decline in rail volumes, which slumped to 149.5-million tons in 2022/23, had been arrested as a result of an 18-month recovery plan implemented to the end of March last year.

She said that volumes were poised to continue on an upward trajectory, a trend that would be supported in future by the introduction of private train operating companies (TOCs), 11 of which had been conditionally awarded the right to operate on the network and had been allocated slots on 41 routes across six corridors.

If fully utilised, the slots would raise yearly volumes by 24-million tons, with the first TOCs expected to begin operating in April 2027.

"We believe that by the end of April this year, we will be able to announce the private TOCs that have met all of the requirements and who will then be able to join Transnet in achieving the 250-million-ton target that we have as a country."

It has been reported previously that Transnet Freight Rail could deliver about 185-million tons of that yearly target, leaving it to TOCs to deliver the other 65-million tons by 2030.

Much would hinge on a recovery in container volumes, with the bulk of such freight currently moved by road owing to large maintenance backlogs on the general freight corridors.

Phillips confirmed that a request for proposals for private-sector participation (PSP) on the key Durban-to-Johannesburg container corridor would be released in the third quarter of the 2026/27 financial year with a goal of fixing the line and concessioning capacity to private operators.

The container corridor was one of four PSP projects highlighted by Transnet in Parliament for implementation in the coming months, with the others identified as the Richards Bay Bulk Terminal, the Ngqura Manganese Export Corridor and Terminal and the establishment of a dedicated LeaseCo to lease surplus rolling stock to TOCs.

However, Transnet also confirmed that it still had hundreds of locomotives out of service, mostly locomotives procured from CRRC of China, with which it remains in legal dispute after conditions linked to a settlement agreement were not met.

A total of 216 of the 481 CRRC locomotives were currently out of service, largely because of an absence of spare parts. A contract had been awarded to a step-in supplier to repair 48 locomotives, but only one locomotive had been delivered to date.

Chairperson Dr Andile Sangqu emphasised the priority being given to the structural reforms aimed at improving the performance of South Africa's ports, railways and fuel pipelines.

This recovery and reform momentum had been supported, he said, by an increase in debt that had been enabled by a government guarantee of over R145-billion.

Transnet said debt would peak in 2025/26 at below the R156.7-billion indicated previously and it said plans were in place to reduce debt to R107-billion by 2030.

Addressing the committee, Transport Minister Barbara Creecy insisted that the government guarantees would not be called, arguing that improvements in volumes were supporting increases in revenues and earnings that would enable the group to begin paying down debt.

In addition, the group was targeting some R3.6-billion in noncore disinvestments and would use some of the proceeds to repay debt.

Trade, Industry and Competition Minister Parks Tau has expressed confidence that the upcoming South Africa Investment Conference (SAIC) will not be undermined by hostile geopolitical developments, reporting that delegates from more than 31 countries are registered to attend.

The sixth edition of the SAIC is scheduled to take place at the Sandton Convention Centre in Johannesburg on March 31 and Tau gave assurances on Monday that the event was continuing to attract interest from both domestic and international investors following a two-year pause.

Since the first investment conference in 2018, South Africa has registered investment pledges of R1.56-trillion across all nine provinces and multiple sectors, from mining and manufacturing to agro-processing and data centres.

There has, however, been much scepticism over implementation, with ongoing questions about the lack of a visible impact on employment and gross fixed capital formation over the period.

InvestSA's Yunus Hoosen said that government's ongoing monitoring of the status of pledges indicated that R600-billion had been invested in line with announcements made at the previous five conferences.

He attributed differences between actual and announced values largely to the long gestation of some of the projects pledged.

At the upcoming conference, Hoosen indicated that a further 65-plus pledges would be made from companies representing a total of 21 countries, with the new investments to be distributed across all of South Africa's nine provinces.

President Cyril Ramaphosa was expected to announce the "surprise" investment value at the conference itself.

At the fifth and most recent investment conference in 2023, Ramaphosa set a R2-trillion investment target for the period to 2028.

No update has been provided in relation to pledges made or the overall target since, with no conference held last year or in 2024, when a multiparty government of national unity was formed following national elections.

Tau said the first cycle between 2018 and 2023 had focused on building a framework of trust and partnership.

"This new cycle is about translating pledges into implementation that demonstrates economic growth and jobs," he said.

Tau acknowledged that some invitees had indicated that it might be difficult for them to travel, owing to the war launched by Israel and US against Iran.

However, the global character of the event would be sustained partly through the fact that the 2026 event would be livestreamed.

"History does not wait for perfect conditions," Tau said, in response to questions about escalating geopolitical tensions and South Africa's ongoing strains with the US.

Most recently, South Africa was included among the 60 economies that the United States Trade Representative would investigate to determine whether sufficient steps had been taken to prohibit the importation of goods produced with forced labour.

Describing relations with the US as fluid, Tau stressed that South Africa continued to engage with the US on the trade issues being raised.

However, he said that the overall message to investors remained that South Africa could be an investment destination of choice and that the economic reforms under way in the country were creating new opportunities for investment.

Engineering News editor Terence Creamer discusses the attention being given to municipal recovery and reforms aimed at boosting infrastructure in the metros.

Stellantis South Africa (SA) has put its proposed assembly plant on hold while the car manufacturer revises the business case for the Eastern Cape facility, says MD Mike Whitfield.

The plant's original trajectory was to start assembly of a one-ton bakkie this year.

Construction at the proposed site in the Coega Special Economic Zone has, however, not moved forward from the initial earthworks seen in 2024.

Stellantis in 2023 signed a memorandum of understanding with the State-owned Industrial Development Corporation (IDC) and the Department of Trade, Industry and Competition to develop the manufacturing facility as a joint venture with the IDC, then priced at R3-billlion.

Stellantis sells the Jeep, Alfa Romeo, Fiat, Citroën, Opel and Peugeot brands in South Africa.

"We have not stopped or cancelled the plant," Whitfield tells Engineering News.

"The pickup industry has, however, changed dramatically in the last few years, with a lot of new entrants.

"This means that we are revising the overall business case for the plant, which means that we could, potentially, add two products to the project – the pickup plus two other models.

"The plant will not be sustainable just on a pickup," says Whitfield.

"We are actively assessing what additional products we can bring in to ensure the long-term stability and sustainability of the project.

"This will result in changes in scope, and in the timeline. As soon as we have finished the study, we'll be in a position to share it."

Whitfield is hopeful that this could happen by end-June.

"The products we bring in will determine the start of production," he adds.

Whitfield says the original plant was to produce the pickup for South Africa, the rest of Africa, and the Middle East.

One of the new additions currently under consideration for the Eastern Cape plant is a new-energy vehicle (NEV) – some form of hybrid or electric vehicle.

"Here we are awaiting government's policy review on NEVs," says Whitfield.

He notes that Stellantis SA is not considering sharing the Eastern Cape plant with another brand, or assembling vehicles for any brand outside the Stellantis stable.

Stellantis has some form of assembly operation in Egypt, Morocco, Tunisia, Algeria and Nigeria within Africa, with "the south [of Africa] important to us", says Whitfield.

The best-selling Stellantis brand in South Africa is Citroën.

"We are of the view that we need to offer vehicles at Asian cost standard," says Whitfield. "More and more of what we do will be sourced out of Asia – and I'm not just talking China.