The Passenger Rail Agency of South Africa (PRASA), said it plans to spend R5bn next year and R20bn the year after on new projects.
The investments will go towards the construction of the proposed Moloto rail corridor costing R9.7bn and runing between Tshwane and Mpumalanga.
The budget will also cover a high-speed train between Johannesburg and Durban and infrastructure and rolling stock and work on backlogs.
PRASA chairman Sfiso Buthelezi says that the preconsolidated organisation had already materially increased the scale and pace of its investment into the upgrading of both infrastructure and rolling stock.
"PRASA will spend R5bn in 2009/10 and that over the three-year medium-term expenditure framework horizon, a total of R25bn would be invested to arrest a backlog created by decades of underinvestment," Buthelezi said.
PRASA is including private investors in these projects.
Prasa was formed on 27 March 2009 after the merger of state-owned South African Rail Commuter with Intersite Property Management Services, Metrorail, Autopax, an inter-city bus service company, and Shosholoza Meyl.