Operation Vulindlela Phase II Expands Reform in Transport and Infrastructure Sectors
The South African government has launched Phase II of Operation Vulindlela, signalling a renewed commitment to structural economic reform. Initially introduced in response to the economic impact of the COVID-19 pandemic, the programme has evolved into a cross-government initiative aimed at unlocking economic growth and improving infrastructure performance.
Over the past four years, key reforms under Operation Vulindlela have included the opening of the rail network to competition and increased private sector participation in port terminals. These steps are part of a broader reform of the country’s freight logistics sector, as outlined in the Freight Logistics Roadmap. The government has reiterated that while private companies will be able to operate on the rail network, infrastructure will remain state-owned.
Transnet’s publication of the Network Statement in December last year has laid the groundwork for private rail operators to enter the market. This move is expected to generate investment in rolling stock and enable more goods to be transported by rail, supporting growth in export industries and stabilising Transnet’s operations through new revenue streams.
The energy sector has seen significant restructuring, including the introduction of a competitive electricity market enabled by the Electricity Regulation Amendment Act. The unbundling of Eskom continues, with the establishment of an independent Transmission System Operator intended to ensure a level playing field for electricity generators. A new round of Independent Transmission Projects will procure more than 1,000 km of additional transmission lines to address grid capacity constraints.
The first phase of reforms also addressed barriers in other areas. A completed spectrum auction spurred telecommunications investment and reduced data costs. The water use licence system has been streamlined to support projects in forestry, mining, and other sectors. A new framework for skilled work visas has been implemented to attract investment and make it easier for businesses to establish operations in South Africa.
Phase II introduces three new areas of reform. The first focuses on spatial inequality. Government aims to reduce the burden of long-distance commuting for low-income earners by changing housing policy to support affordable rentals and home ownership in economically active areas. Plans include accelerating the release of publicly owned land and buildings for housing, clearing the backlog of title deeds, and removing regulatory barriers to low-cost housing development in urban centres.
The second area targets the performance of local government. Operation Vulindlela will work to improve basic service delivery by professionalising utilities and strengthening municipal administration. Measures include appointing capable senior officials, extending the mandate of the Public Service Commission, and reviewing the local government fiscal framework to better match revenue with responsibilities.
The third area is digital transformation. A Digital Transformation Roadmap has been approved to advance the use of digital public infrastructure and improve access to services. Planned developments include a digital identity system, rapid payment mechanisms to increase financial inclusion, and online platforms for essential services such as ID and passport applications.
As Operation Vulindlela enters its next phase, the government has reaffirmed its intention to implement far-reaching reforms that support faster and more inclusive economic growth, reduce structural inefficiencies, and improve the daily lives of South Africans.
Access the President’s speech here: https://www.gov.za//news/speeches/president-cyril-ramaphosa-launch-operation-vulindlela-phase-ii-07-may-2025
You can also view the PDF here: https://www.treasury.gov.za/comm_media/speeches/2025/2025050701%20Overview%20of%20Operation%20Vulindlela%20Phase%20II%20.pdf
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