Transcript Slide 0

Tau Morwe
Chief Executive
Western Cape Africa Agribusiness Forum
14th June 2012
Presentation Outline
• Market Demand Strategy Overview
• Changes at TNPA
• Impact on Volumes & Capital Programme
• Main Projects for Western Cape
• Closing Comments
Transnet’s Market Demand Strategy (MDS)
 R300bn capital investment programme;
 Expanding rail, port and pipeline
infrastructure;
 Increase in capacity to meet market
demand;
 Continued financial stability and
strength;
 Significant productivity and
operational efficiency improvements;
 Shift from road to rail – reducing the
cost of doing business and carbon
emissions;
 Enabling economic growth;
 Job creation, skills development,
localisation, empowerment and
transformation opportunities;
MDS will have a massive impact on the growth of TNPA
Complexity in transitioning
from stabilising businessas-usual to realising
growth
Present
Stabilize operations
• Creating oversight capacity to
Past
Exploit existing assets
• Under-investment and
lack of infrastructure
and fleet maintenance;
• Inadequate return on
aged assets;
• Limited economic
regulation;
• Lack of oversight and
monitoring of Terminal
Operations;
• Lack of critical skills
and competency gaps;
monitor port efficiency and
stabilise port operations;
• Creating human resource
capacity for critical roles;
• Organisational redesign to
deliver on Authority role and
responsibilities;
• Mitigating port infrastructure
Future
Facilitate growth
• Sustained investment to create port
infrastructure capacity ahead of
demand to stimulate growth;
• Business development to grow port
volumes and create new cargohandling facilities (regional, global
focus);
• Terminal oversight that drives efficient
and safe port operations;
• Sustainable Authority within an
environment of economic regulation;
• Human Resource critical skill capacity
created;
capacity constraints through
sustained investment;
• Create structures for economic
regulation;
• Create Business Development
framework/resources to grow
revenue and volumes;
3
TNPA will make significant changes to realise its growth
aspirations
MDS Impact on TNPA
Capital planning Operational
and execution
effectiveness
and productivity
• Increase capacity • Take a systems
and capability to
deliver on TNPA’s
R 46.9Bn capex
plan;
• Implement EPMO
to track capital
projects and
project schedule
deviations;
• Debottleneck
procurement to
reduce cycle
times;
view of a port;
• Develop and
Implement
Operations
Management
Strategy;
• Establish
operational
efficiency targets
for all Terminals;
• Establish
oversight teams
to monitor
performance;
Target volumes
and customer
satisfaction
Regulator and
key stakeholder
engagement
• Finalise Tariff
Methodology and
integrated port
Pricing Strategy
capacity planning
with Ports
with Customers;
Regulator;
• Develop New
• Implement
Business
Agreements and
Development
Licences for all
Strategy
port services and
(Regional and
facilities;
Africa);
• Implement CRM • Create oversight
capacity to drive
to improve
port compliance;
Customer
collaboration;
• Improve
Financial
sustainability
Safety
• Implement
• Embed safety
Financial
turnaround
strategy;
• Complement
Group initiatives
for financial
sustainability;
and health
oversight across
ports;
• Implement visible
felt leadership to
create a safety
culture across
ports;
Organisation strategy / readiness
• Ensure availability of required skills sets to develop internal capability and capacity in order to address competency gaps;
• Retention of skilled workforce to deliver on prioritized areas and continue to strengthen the development initiatives for core, critical
and scarce skills as anchors and growth-enablers;
HR strategy
• Develop an integrated and responsive Human Resources strategy aligned to the MDS requirements thereby ensuring a valuedriven and business partnering HR function;
4
…. Anticipated growth in key commodities over the next
7 years ….
Containers
 8%
12
13
7 year
CAGR (%)
Dry Bulk
‘000 TEU
4 344 4 821
 __
5 250 5 576 6 087
14
15
16
7 646
6 530 7 094
17
18
19
Liquid Bulk
Mtpa
 6%
172
180
182
191
212
221
144
161
13
14
15
16
17
18
19
19
Break Bulk
mkl
 3%
39.8
41.3
47.7
46.1
47.0
48.1
49.2
50.0
13
14
15
16
17
18
19
19
Mtpa
 5%
11.6
12.2
13.0
13.6
14.3
14.6
15.2
10.5
13
14
15
16
17
18
19
19
Automotive
‘000 Units
 3%
596
610
609
627
670
689
704
722
13
14
15
16
17
18
19
19
5
…… From a Transnet perspective the impact of
infrastructure development will be felt nation-wide …..
7 year capital investment
by region1
Provisional contribution to direct and
indirect jobs (’000)
Free State
North West
Northern Cape
Gauteng
Limpopo
Mpumalanga
Eastern Cape
Western Cape
KwaZulu-Natal
136
123
110
99
83
106
108
88
11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19
LE
1
National – countrywide investments – R153,3bn
.... From TNPA’s perspective volume growth requires port
investment in expansion of Facilities rather than replacement
xx
1,618
Expansion vs.
replacement (Rbn)
0.96
0.65
12
2,376
0.8 1.5
13
5,326
2.8 2.5
5,434
3.3
2.1
4.2
10,167
8,134
6,392
7.9
6.3
2.2
9,038
7.7
2.3
1.9
Total
1.3
expansion
replacement
14
15
16
17
18
19
10,167
9,038
Province (Rbn)
8,134
4 686
6,392
5,326
5,434
R Bay
Western Cape
Eastern Cape
Other (LNS, DRS and HQ)
2 295
5 455
3 518
2 471
1 583
Durban
1 022
2 592
2 100
1 750
1,618
80
566
608
310
54
11/12
2,376
619
525
500
689
133
740
569
614
859
992
1,325
1,509
503
423
251
13/14
14/15
15/16
258
436
12/13 Bgt
7
568
577
2,657
3,018
26
51
44
16/17
17/18
18/19
1,508
7
… The focus in Cape Town will primarily be to
create Container capacity …..
CAPE TOWN
CONTAINERS
Capacity vs Demand
3,500,000
3,000,000
500,000
20 Year Scenario
1,000,000
7 Year Scenario
1,500,000
Current Year
2,000,000
30 Year Scenario
2,500,000
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
2018/19
2019/20
2020/21
2021/22
2022/23
2023/24
2024/25
2025/26
2026/27
2027/28
2028/29
2029/30
2030/31
2031/32
2032/33
2033/34
2034/35
2035/36
2036/37
2037/38
2038/39
2039/40
2040/41
2041/42
0
CAPACITY
DEMAND
Cape Town Containers:
• Demand grows from 0.7m TEU to 2.5m TEU over a thirty year period;
• The current capacity expansion projects will provide capacity until around 2026, after
which capacity will be created through seaward expansion of the terminal;
Container Expansion at Cape Town
• Waterside and landside expansion to increase capacity/efficiency;
• Deepening of 4 berths to -15.5m;
• Terminal to acquire 6 new twin lift super post Panamax ship-to-shore cranes;
• Terminal to convert from straddle carrier to rubber tyre gantry (RTG) operating
system with 28 RTGs;
• Expansion of landside container handling areas, road layouts, additional reefer
stacks;
• Terminal capacity to increase to 1.1m TEU, additional landside investment could
increase this to 1.4m TEU;
• TNPA’s estimated cost for the landlord’s investment is R 2.6Bn – investment over
the next 7 years will be 1.4Bn;
• Capacity of 1.1m TEU should be available by 2015/16;
MDS is key to South Africa’s growth strategy
The potential for South  Contribute to NGP aspirations: expected to create up to 588,000
job opportunities across the economy
Africa is massive…
 Reduce the cost of doing business (0,5% of GDP)
 Drive regional integration
 Localisation programme supports local products and skills
development
It is financially sound
 Majority of the growth will be funded internally from operations
 Gearing and cash interest cover will maintain investment
grade credit rating
We can execute…
 Execution risks will be mitigated through robust
implementation plans
 In partnership with its stakeholders, Transnet can
successfully realise the growth that MDS will bring to the country
It will improve
Transnet's position…
 …as a top-tier logistics provider and SA’s employer of choice
 Infrastructure development plans will create world class freight
infrastructure
The End