emita – case study – gautrain project july 2007. emita – case study – gautrain project who...
TRANSCRIPT
emita – Case Study – Gautrain Project
July 2007
emita – Case Study – Gautrain Project
Who is Bombardier?
Project Background.
Why South Africa?
The Future.
A competitive edge based on cheap labour is quickly eroded by new technology.
- Alvin Toffler, Futurist
An Introduction to Bombardier Transportation
Bombardier Aerospace
Bombardier Transportation
Bombardier
www.bombardier.com
Bombardier
Corporate office based in Montréal, Canada.
Workforce of some 56,400 people worldwide as at January 31, 2007.
Revenues of $14.8 billion US for fiscal year ended January 31, 2007.
More than 96% of revenues generated outside Canada.
Listed on Toronto Stock Exchange (BBD).
Overview
Breakdown of revenues by business segment
Bombardier: a diversified company
year ending 31 January, 2007
Aerospace56%
Transportation44%
Bombardier Aerospace
Bombardier Transportation
Bombardier
Bombardier Aerospace is a world leader in the design and manufacture of innovative aviation products and services for the regional, business and amphibious aircraft markets. It also offers Flexjet fractional ownership, Skyjet aircraft charter and management, technical services, aircraft maintenance and pilot training.
Flexjet and Skyjet are trademarks of Bombardier Inc. or its subsidiaries.
Bombardier Aerospace
Bombardier regional aircraft
Q100/200 Q300 Q400
CRJ200
CRJ200, CRJ700, CRJ705, CRJ900, Q100/200, Q300 and Q400 are trademarks of Bombardier Inc. or its subsidiaries.
CRJ700 CRJ705 CRJ900
Bombardier Aerospace
Bombardier Transportation
Bombardier
Bombardier Transportation is the global leader in the rail equipment manufacturing and servicing industry. Its wide range of products includes passenger rail vehicles and total transit systems. It also manufactures locomotives, propulsion and controls and provides rail control solutions.
Bombardier Transportation
Bombardier Transportation
Products and Service
Propulsion and
Controls
Rail Control Systems
ServicesTransportation Systems
Locomotives & Freight Wagons
Metros Regional and Commuter trains
Intercity and High Speed Trains
Light Rail Vehicles
Bogies
42 Production Sites
in 21 countries
Bombardier Transportationaround the World
Bombardier TransportationWorldwide Bombardier - relevant market by geographic region
Asia-Pacific9% ($ 3.9)
North America15% ($ 6,2)
Europe62% ($ 26.3)
Other 14% ($ 6.0)
* calendar year 2006
* in billions of dollars
Bombardier Transportation is growing
In 2006, Bombardier captured more than 30% of the global rail market, including more than 50% of the commuter - rail market segment.
Alstom17%
Siemens11%
Others27%
Rotem3%
CAF6%
Bombardier28%
Stadler7%
AnsaldoBreda1%
2005- 2007
Alstom24%
Siemens5%
Others20%
Bombardier44%2007
YTD
Localisation Expertise
Bombardier Transportation is the market leader in more than just railway products and systems.
We are also the world leader in localisation for the rail industry.
Our experience at integration of local suppliers and development of local industry is unmatched by any other supplier.
Types of Localisation
Level 1• Product designed and project - managed by Bombardier
Transportation.
• Utilisation of existing factory in local country.
• Use of local suppliers.
• Final assembly and testing carried out by local manufacturer on a sub-contract / licensing agreement.
Localisation % of project
Total project value
Types of Localisation
Level 2• Formulation of a joint venture / strategic alliance.
• Product designed by Bombardier Transportation.
• Project management split between Bombardier Transportation and local partner.
• Use of local suppliers.
• Manufacture of carbodies by local partner.
• Final assembly and testing of vehicles by local partner.
Localisation % of project
Total project value
Types of Localisation
Level 3• Set up a Local Company.
• Product designed by Bombardier Transportation.
• Project management by Local Company.
• Use of local suppliers.
• Manufacture of carbodies by local company.
• Final assembly and testing of vehicles by local company.
Localisation % of project
Total project value
Examples of where has localisation been achieved
Level 1 - Romania
• Bucharest Line 2 project
Level 2 - China
• Guangzhou Line 2 project
Level 3 - India
• Delhi Metro RS2
Gautrain Project Background
South Africa: The Powerhouse of Africa
Gauteng:• Is less than 2% of South Africa’s surface area.
• Is responsible for 47.7% of all employee remuneration in SA.
• In 2005 its 2.8 million households generated 35% of the country's household expenditure, spending R302 billion (~£24 billion).
• Is responsible for 50.4% of all company turnover in SA.
• Accounts for some 33% of GDP of South Africa.
• Accounts for about 10% of Africa's GDP and is the fourth largest economy in Africa.
• Has the most developed infrastructure in Africa.
• Has an estimated population of 8,8 million.
• Attracts over 52% of the seven million international tourists who come to South Africa.
Private
Electrical & mechanical systems including rolling stockElectrical & mechanical systems including rolling stock
Civil works, stationsCivil works, stations
Black Economic EmpowermentBlack Economic Empowerment
Bombela - Concessionaire
Public
Project Structure: PPP Public Private Partnership
Gautrain Project - Key Success Factors
Market Knowledge.
Market Presence and Track Record – Bombardier has executed a number of successful projects in South Africa.
Local Knowledge – Bombardier Transportation SA (Pty) Ltd.
Patience and Staying Power – South Africa is evolving fast.
2010 World Cup was a major driver – the right timing.
Good legal & Financial Framework in South Africa.
Local Partnerships leverage competitiveness.
Hard work.
Gautrain Project - Key Challenges to Success
Timescale – a major multi-faceted project completed in 54 months will be a huge accomplishment.
NIPP – National Industrial Participation Program
• All Government Projects with an import value of more than US$10 million have to do offset trade / investment of 30% of the import value.
Socio Economic Development – Black Economic Empowerment – Affirmative Action.
South African Foreign Exchange Regulations.
Local Taxation.
Local labour relations and availability of Skills.
emita – Case Study – Gautrain Project
Technical specifications of the Train
Reliability, Safety and Security paramount. International ‘Standard Gauge’. Maximum speed: 160 km/h. 24 modern state of the art trains
• Bombardier’s standard ‘Electrostar’ product platform.
• Fully customised for the Gautrain Project. Different seating for commuters and air passengers. Frequency every 10 to 30 minutes. Operating hours 05:30 to 20:30
Project Timescales
Pre-Qualification 2002
Bid September 2003
BAFO (Best And Final Offer) January 2005
FBAFO (Further BAFO) March 2005
Preferred Bidder July 2005
Effective Date (Commercial Close) 28 September 2006
Completion of Phase 1 +44 months
2010 Football World Cup June 2010
Completion of Phase 2 +54 months
Operating Concession A further 15 years
Government’s Implementation Process
Four pillars
• Political will & commitment from Government
• Viable project (base case design)- Technical- Financial- Legal/Institutional
• Funding (for Infrastructure & Operations)- Government’s portion- Private Sector’s portion
• Community acceptance & buy-in- Socio-economic benefits- Power of expropriation
Current status
Month 10 of the Project.
Honeymoon period.
In Preliminary or Detailed Design mostly.
Procurement is underway.
Civil Construction has begun.
They have started on the 15 km tunnel.
Gauteng Province is pleasant to deal with.
Too early for ‘Lessons Learned’ yet.
www.gautrain.co.za
Business Setup in the Local Office (85 staff)
We run the business in South Africa as we do in Europe.
Bombardier is a strong process - driven project Company.
Top Management has international Bombardier experience.
Strong emphasis on local people with local knowledge in Middle and Senior Management.
Language is English, corporate culture is Bombardier, flavour is South Africa.
IS infrastructure as in Europe.
Time Zones: North America, UK, South Africa.
Why South Africa?
Why South Africa?
Bombardier is a Global Player with few competitors. We monitor all International Projects in all countries all the time.
We are active in South Africa. Government Spending Program – Gauteng Blue IQ. Right timing - 2010 World Cup. Viable Project in its own right. Economic Growth. Excellent Financial & Banking System in place. Sophisticated investors. Sound Infrastructure. Small market. Infrastructure Development is ongoing.
The Future
The Future for Bombardier in South Africa
The Powerhouse of Africa.
The Gateway into Africa.
Government Development Planning Program.
This Project establishes the credibility of Bombardier in the local marketplace.
Expect sustained Economic Growth.
Excellent Financial & Banking System in place.
Sound Infrastructure.
Infrastructure Development is ongoing.
Challenges
Crime & Political Stability.
International Perceptions.
Sustainability of the business.
Skills Retention in the country.
Continued Economic Growth necessary for long-term Projects.
Government Projects: NIPP.
Private Sector: SE, BEE, AA.
Low Cost competitors from the East – dumping.
Thank you.
www.bombardier.com