mds booklet 2015 (1)
TRANSCRIPT
R E L O A D E D
2015
Content
02 What is the MDS?
04 Our plan
06 How will we achieve this?
08 Why do we need the MDS?
10 Breakdown of the investment
12 MDS: Looking ahead
14 What is TVCC?
16 Human resources
18 Promoting a safety culture
20 Skills and training
22 Transnet Academy
24 Case studies: Training programmes
26 Sustainability
28 Supplier and Enterprise Development
30 Suppliers who have benefited from the MDS
32 The impact of the MDS on job creation
34 Transnet Freight Rail
36 Transnet Engineering
38 Transnet National Ports Authority
40 Transnet Port Terminals
42 Transnet Pipelines
44 Transnet Foundation
46 How will the MDS benefit SA?
48 Did you know?
Published by:
Dear colleagues,Welcome to the third edition of our Market Demand Strategy (MDS) guide.
In April 2012, we launched our rolling capital expenditure programme �the Market Demand Strategy.
This is our fourth year of the MDS, and our unprecedented programme to expand and revamp South Africa’s rail, port and pipelines infrastructure continues to break records. Spending increased to R33,9 billion, taking the total spend to R93,2 billion over the last three years. In March 2014 we announced that we had awarded a R50 billion contract for the building of 1 064 locomotives to four global original equipment manufacturers. We are already feeling the impact of the MDS in our operations and the new equipment we have acquired.
In March 2015, we celebrated the successful completion of the first batch of 95 electric locomotives, 85 of which were completed at Transnet’s Koedoespoort facility, and the rest in China. We have built 20 locomotives a month at our centres!
In the last three years we also invested R2 billion in the building and deepening of two additional berths at the Ngqura Container Terminal. We also purchased port equipment, including two megamax ship-to shore cranes, 18 rubber-tyred gantries, 48 haulers and 48 bathtub trailers.
Our training record has been equally impressive. Last year for example, we inaugurated our first batch of 83 trainees in various maritime-related disciplines. This was the first time that we had taken ownership of training and employing our own aviation pilots.
This is simply staggering. There are very few other countries in the world where such investment in infrastructure is taking place. We at Transnet count ourselves as extremely fortunate that we are able to contribute toward shaping the future of our nation. We will, therefore, continue to ensure that we achieve our goals.
The MDS is a revolutionary transition in the life of Transnet. It marks a definitive move to demonstrate the role that we should play in the development of our economy. In doing so, it will also change our country. The projects we have committed to, and embarked upon, are game-changing. They are inextricably linked to our growth as a nation, and therefore to our collective futures. On a practical level, our plans are also coupled to creating employment, enhancing local supplier development and training of critical skills. These are significant drivers of MDS. This guide therefore, is a roadmap to that strategy. It provides a concise summation of our targets and how we intend to achieve them. Most importantly, it should serve as a daily reminder of why we all come to work at Transnet.
In order to deliver on our promises and help grow the South African economy and contribute to a better life for our fellow citizens, we must redouble our efforts to make Transnet a people-centred, performance-driven, customer-focused organisation. In order for our plans to succeed, we require equally profound changes in ourselves, changes in how we think and operate. We must all make this journey together and I hope that you are as excited about these changes as I am.
The onus is on us to ensure that we keep the momentum of the MDS alive. We may be subject to the vagaries of the global economy and other factors beyond our control, but we must hold the line and be steadfast. It is only by doing so that we can conquer the insurmountable.
Working together, we can achieve just that!
Siyabonga Gama Acting Group Chief Executive
MDS_1
The Market Demand Strategy (MDS) is Transnet’s investment programme aimed at expanding and modernising the country’s rail, port and pipline
infrastructure over a period of seven years to promote economic growth in South Africa
The main pillar of the MDS is a rolling seven-year R336,6 billion investment programme.
Rail volumes will increase from around 225,4 million tons to 362,1 million tons (mt)
per annum.
WHATMDS?
IS THE
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633 608The total number of jobs (direct and indirect) we expect to create and/or sustain across the South African economy over the next seven years
18,5% The revenue growth targeted in 2015/16
One of the top global freight railway companies.
One of the largest employers in South Africa.
One of the top companies in South Africa in terms of revenue.
The MDS will make Transnet:
R7bn To be spent on training, skills development, bursaries and grants by 2021/22 Over
19% Container capacity growth by 2021/22
14,1% Headcount increase by 2021/22
MDS_3
1 Address capacity constraints
2 Improve the performance of the regional rail system
3 Shift cargo from road to rail
4 Reduce congestion on the country’s roads
5 Promote skills development
6 Improve global and regional maritime connectivity
7 Develop supplier industries for all modes of transport
8 Provide world-class infrastructure and technology
9 Build infrastructure that meets the demands of the growing economy
Improve the competitiveness of the country’s freight system
OUR PLAN
10
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MDS | 05MDS_5
• Enhanceourmeasurementandreporting• Reviewperformancemorefrequently• Improveourriskmanagementandcapitalallocationprocesses• Alignincentivesacrosstheorganisation
To increase our ability to measure and track costs from internal and external activities, we will:
Our plan within Transnet
HOW WILL WE ACHIEVE THIS?
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We will increase asset utilisation and maintain
a financially sustainable business
FINANCIALSUSTAINABILITY
1
We will reduce the cost of logistics and promote
an integrated and aligned regional network that
allows for supply chain optimisation
MARKET SEGMENT COMPETITIVENESS
4
We will increase both capability and capacity to
deliver the capital investment plan
CAPACITY CREATION
2
We will maintain readiness to provide world-class
rail, port and pipeline operations
OPERATIONAL EXCELLENCE
3
Our social and environmental stewardship will develop our talent, create new jobs, improve health and safety, benefit communities, reduce
energy consumption, and promote the adoption of climate
change mitigation policies
DEVELOPMENTAL OUTCOMES
5
5STRATEGIC
FOCUS AREAS
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Investment in infrastructure and growth of the economy are central to the South African Government’s New Growth Path and National Development Plan. By expanding our rail,
port and pipeline infrastructure, and facilitating the shift from road to rail, the MDS will have a marked impact on the cost of doing business in South Africa.
WHY DO WE NEED THE MDS?
The MDS will deliverlasting economic, social
and environmentalvalue to South Africa
sustainable
value
We will increase ourheadcount by 14,1%over the seven-year
period to support thegrowth of the business
companygrowth
We will prioritiseskills development to
promote a highperformance culture
skillsdevelopment
The MDS investmentprogramme will createand sustain hundreds
of thousands of direct and indirect jobs over the next seven years
jobs
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MDS | 09
Our increased twenty-foot equivalent unit (TEU) handling volumes by 2021/22
6,081 million TEUs
The projected wagon fleet by 2021/22
91 654 Wagons
FACTS & FIGURES
Our projected movement of petroleum products will be increased by more than 2,6 billion litres from 16,7 billion litres, to reach a total of
19,3 billion litres by 2021/22
2,6 billion LITRES
MDS_9
BREAKDOWN OF THE
INVESTMENT
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Increase capacity at ports by investing in maritime containers
Complete the New Multi-Product Pipeline (NMPP)
Invest in the General Freight Business to increase capacity to 202,6mt
Increase the rail fleet and improve the infrastructure
Increase export coal to 97,5mt, including the Waterberg
Increase export iron ore to 62mt
MAJOR PROGRAMMES
Freight Rail R210,5bn/62,1%
R52,7bn/15,5%
R51,3bn/15,1%
R13,9bn/4,1%
R7,0bn/2,1%
R3,5bn/1,0%
National Ports Authority
Port Terminals
Pipelines
Engineering
Specialist Units
Seven-year capital investment by commodity
Seven-year capital investment by Operating Division
R147,1bn/43,4%
R49,1bn/14,5%
R40,7bn/12,0%
R21,4bn/6,3%
R20,0bn/5,9%
R15,8bn/4,7%
R13,9bn/4,1%
R2,9bn/0,9%
R28,0bn/8,3%
General freight
Export coal
Export iron ore
Manganese ore
Bulk
Piped products
Break-bulk
Other
Maritime containers
MDS_11
MDSLOOKING AHEAD
To support Government in driving regional integration we will:
Transnet has geared up to meet the growing demand of the national economy. We have defined strategic focus areas, key initiatives and performance
indicators. This is to ensure that we can provide critical logistics infrastructure and capacity over the short-term, while staying aligned with the long-term
strategy of the MDS.
BEYOND BORDERS
Provideintegrated fuel
solutions via pipeline and rail to Botswana
and Zimbabwe
Increase over border
volumes in our rail business from 7,8mt to 18,9mt per annum
by 2021/22
Growtransshipment
revenue from R410million per annum
to R1 008 million perannum by 2021/22
Position Engineeringto become the
preferred supplier of rolling stock
in Africa
Continuepromoting the
Port of Ngqura asa transshipment
hub for sub-Saharan
Africa
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R25,181BILLIONInvestment in rail:Coal: R4,040 billionIron ore: R1,403 billionGeneral freight: R18,717 billionManganese: R1,021 billion
R1,975BILLIONInvestment in pipelines:New Multi-ProductPipeline Phase I: R1,646 billion
R5,175BILLIONInvestment in ports (National Ports Authority and Port Terminals):
Containers: R1,111 billionBulk: R1,234 billionBreak-bulk: R616 millionAutomotive and other:R2 ,214 billion
R1,511BILLIONInvestment in engineering:Mostly for the manufacture of rolling stock.
EXPANSION ANDMAINTENANCE
INVESTMENT IN 2015/16
MDS_13
WHAT
TVCC? IS
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Transnet uses a counter-cyclical investment strategy to manage risk in a challenging
environment. To manage revenue risk, we have developed a new collaboration model, the
Transnet Value Chain Coordination (TVCC).
The TVCC will:
Enable greater collaboration among the operating divisionsImprove the visibility of informationMeasure and monitor systems and processes to a higher level of granularity in performance and risk managementProvide end-to-end visibility of commodity supply chains
MDS_15
We invest in developing human capital to build a strong,people-focused organisation.
Transnet’s people are crucial in achieving our goals.Our Human Resources (HR) strategy will help us:
Create and develop core skillsCreate a productive working environment
Drive performance
In order to meet MDS requirements we will:
Increase headcount by filling essential vacancies, retaining scarce skills, managing succession planning
and building technical skills.
Drive socio-economic transformation by achieving employmentequity targets, broadening skills development and
creating jobs for the youth.
Increase the effectiveness of human capital service delivery by consistently applying policies and
procedures and aligning roles, responsibilities and performance.
HUMANRESOURCES
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We developed the Culture Charter by obtaining a consensus from our colleagues on the issues that need to be addressed for Transnet
to achieve its growth objectives. The Culture Charter is reviewed annually and is an ongoing platform for employee engagement and
sustaining a culture of performance.
PROMOTING A CULTURE OF TRANSFORMATION
THE SEVEN CULTURECHARTER BEHAVIOURS ARE:
A SAFETY MINDSET
GOOD COMMUNICATION
DIGNITY AND RESPECT
BEING EMPOWERED TO PERFORM
BUSINESS FOCUS
RECOGNITION AND REWARD FOR GOOD WORK
DELIVERY ON PROMISES
MDS_17
PROMOTING ASAFETY CULTURE
Safety is a vital element of Transnet’s operations and is managed through the Transnet Safety, Health, Environment and Quality Management system. The following seven
Golden Safety Actions, communicated to all company employees, set the benchmark for safe behaviour within Transnet:
I takeresponsibilityfor myself andmy team, andI don’t blame
others
Regardlessof my level,I contribute
to improvingsafety
If I don’tunderstand
and if I have aproblem, I speak
up and say so
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This programme entrenches a culture of safety at Transnet. The League works on a system of rewarding teams with points_monthly and annually_for making
improvements to safety measures in the workplace.
I alwaysprepare, check
and reportunsafe acts and
conditions
I know theoperating
procedures andsafety rules, follow
them and don’t take shortcuts
I will notperform
unsafe workand put myself
and others indanger
I rest welland
work safely
The Golden Safety League
MDS_19
To deliver the promises of the MDS, Transnet has prioritised skills development and promotes a
high‒performance culture.
We offer comprehensive training at various Transnet-operated centres of learning, and develop
and maintain a skills and talent pipeline.
The talent pipeline addresses business priorities through the value chain, from secondary through to
tertiary institutions and into the workplace.
We place specific emphasis on developing and training engineers, artisans and technicians.
SKILLSTRAINING
AND
THIS WILL ENSURE
A return on our investmentEmployees are fully equipped to tackle the work aheadTargets are met with efficiency
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learners were taken on over the last three years
Sector-specific skills development in marine,
rail and cargo handling is a key priority and more than
5 900
492engineering bursaries
were awarded to undergraduate, masters and doctoral students in
the last three years
R1,166billion will be spent on
bursaries from 2015/16 to 2021/22
R7bnIn total over
will be spent on training during the
MDS period
3,2% of the payroll will be
invested into skills development in
2015/16
3 000artisans and 1 000
technicians have already entered training
With our focus on engineering, technical and
sector-specific skills, more than
FACTS & FIGURES
MDS_21
We are committed to developing a competent workforce. All skills delivery and development initiatives are provided through the Transnet Academy. The
Academy has four sector-specific schools that focus on technical, operational, security and leadership/business training, and development. By consolidating the schools under the Academy, we can ensure focused training, an effective
delivery approach, and a visible return on investment in our people.
TRANSNETACADEMY
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SCHOOLS OF EXCELLENCE AREAS OF TRAINING WHO CAN JOIN?
SCHOOL OF RAIL
• Business simulation•Yard operations• Train control• Train driver assistance
Candidates interested inrailway operations and maintenance, railway engineering and safety training.
SCHOOL OF ENGINEERING
•Wagonfitter•Electricalfitter•Patternmaker•Blacksmith
University students who arestudying Engineering can apply for the in-service training programmes.Transnet employees and matricstudents who are studying Mathematics and Physical Science can apply for apprenticeships and learnerships.
MARITIME SCHOOLOF EXCELLENCE
•Cargocoordination•Vesseltrafficservices•Operator-liftingequipment(OLE)•Skipperportoperations(SPO)•MarinemotormangradeII(MMG)
Both National Ports Authority employees and external candidates.Recruitment is conducted throughan open and public process, inline with Transnet’s HR policies.Minimum entry requirements withcompulsory subjects: English,Mathematics and Physical Science.
SCHOOL OF PIPELINES •Pipelinecontrolling• Coordination and planning
Currently open to Transnetemployees only.
SCHOOL OF SECURITY
•Protectionofficial•Portsecurity•Firearmtraining•VIPProtection
Recruitment is conducted throughan open and public process, in linewith Transnet’s HR policies.
TRAINING PROGRAMMES WHAT IS IT ABOUT? WHO CAN JOIN?
CHARTERED ACCOUNTANTSTRAINING PROGRAMME (CAT)
Transnet is an accredited trainingoffice with the South AfricanInstitute of Chartered Accountants (SAICA).
Minimum entry requirement is acertificate in theory of accounting(CTA)/BCompt (Hons).
YOUNG PROFESSIONAL- IN-TRAININGPROGRAMME (YPT)
YPT, EIT, TIT and CAT training: two-year workplace learning programme with the support and guidance of a mentor.
A graduate who has completeda commercial or social sciencedegree at a university will undergoa two-year structured development programme.
ENGINEER-IN-TRAININGPROGRAMME (EIT)
Work-integrated learningprogramme for people with an Engineering degree from university who have not yet had two years of postgraduate exposure to reach thelevel of expertise.
Anyone with a bachelor’s degreein Engineering from a recogniseduniversity in a field relevant to Transnet.
MDS_23
CASE STUDIESOF TRAINING PROGRAMMES
Number of employees to undergo leadership and empowerment programmes in 2015/16:
PROGRAMME 2015/16
Exco members attending executive programme 2
Extended Exco members attending the Global Executive Leadership Development Programme
20
Senior managers attending a customised Leadership Development Programme
40
Middle management in Operating Divisions attending customised Leadership Development Programmes
550
Frontline managers and supervisors in operating divisions attending customised Leadership Development Programmes
500
Women Leadership Development Programmes 80
Appointment of coaches for senior executives/managers 55
While we are growing in size, we are also gearing up our training offerings. Our investment will focus on leadership development programmes
and training initiatives suitable to the needs of a high-performing organisation.
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It was April 2013
when I started the Young Professional-In-Training Programme at
Group Corporate and Public Affairs. When I finished in March 2015, I was offered a permanent
position as a Communications Specialist. This wonderful experience exposed me to internal and external
communications, including branding, social media, event and stakeholder relations management. Now that I am on
board, my responsibilities include managing and coordinating the GCE’s media interviews and other speaking engagements,
composing and editing our internal newsletter, managing and updating Transnet’s social media pages and monitoring
media coverage. I am grateful that Transnet offered me an opportunity of this magnitude. I believe that this programme has thoroughly helped me to carry out
my duties competently and professionally and prepared me to grow into my next job role.
Tebogo Losaba
I received a bursary from Transnet for my university studies. One of the conditions was that on graduation I would enter into the two-year Engineer-in-Training programme.It was very challenging, but rewarding, and I was one of the first industrial engineers to enter this programme.
I now work for Transnet Freight Rail: Rail Network, the infrastructure maintenance unit as an Engineer-In-Training. My focus is on the continuous improvement of maintenance processes to efficiently utilise resources, such as personnel and the SAP system. The aim is to ensure that the rail network is safe and reliable to transport cus-tomer goods. My goal at the end of my training is to have a good understanding of how the railway infrastructure is maintained and its required support functions.
Transnet’s trainees are exposed to a diverse working environment. This encourages us to develop our interpersonal skills across a number of boundaries such as age, culture and experience levels. We are given the opportunity to continually develop and better understand the railway infrastructure through a number of short courses.
All of this assists with registration with the Engineering Council of South Africa (ECSA) as a professional engineer.
Dheevashni Padayachy
My career at Transnet started as an Employee Relations
Intern at Transnet Port Terminals (TPT) in Cape Town. Though I had other
opportunities to consider, I chose Transnet because the thought of working at a company with such stature
appealed to me. I knew that if I worked hard, I would be able to achieve all the career goals I had set out for myself.
During my time at TPT, I was groomed well and learnt a great deal about the various disciplines in our Human Capital
department. About a year later, I was offered the position of senior administration clerk at Transnet Engineering (TE), where I was primarily responsible for recruitment activities but was also
exposed to other human resources functions.Within 14 months I took up my current position as a Senior
Employee Relations Officer. This position does not only present an entirely different set of challenges but it is the
job where I have found the most satisfaction. Every day is a steep yet enjoyable learning experience.
Darren Sean Dukhan
MDS_25
SUSTAINABILITY
Transnet’s financial strength, infrastructure investment and operational performance will deliver sustainable development outcomes for the well-being of future generations. Sustainable outcomes are enabled by Transnet’s commitment to good governance, ethical behavior and
stakeholder engagement.
1Total training
spend of
R1,25bn in 2021/22
2
Increase B-BBEE to
82,5% of total measured
procurement spend
6
DIFR target of
0,75 in 2021/22
7Transnet
Foundation’s key programmes
R218,5min 2015/16
8
Improve energy efficiency by
1,09% every year
9
Local content
85% of total spend by
2021/22
3
Private sector participation
framework for ports and rail in
2015/16
4Increase
over border volumes to
18,9mtpa by 2021/22
5
67 202 permanent
employees by 2021/22
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SUSTAINABLE DEVELOPMENTAL
OUTCOMES
9
1. Employment � Our activities will create direct and indirect employment.
2. Skills development � We will improve the productive capability of people.
3. Industrial capability building � We will facilitate the country’s industrial development and improve competitiveness.
4. Investment leveraged � We will facilitate investment in the country’s freight logistics system.
5. Regional integration � We will facilitate investment by private companies and the public sector in the country’s freight logistics system.
6. Transformation � We will promote employment equity in our company and black economic empowerment in our suppliers.
7. Health and safety � We will improve the well-being and safety of our employees and the communities within which we operate.
8. Community development � We will improve the economic, social, cultural and environmental well-being of communities within which we operate.
9. Environmental stewardship � We will enhance the natural environment’s capacity to meet the resource needs of future generations.
Gove
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ce, e
thic
s and
stak
ehol
der e
ngag
emen
t
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SUPPLIER & ENTERPRISE DEVELOPMENT
Transnet fully supports the enhanced participation of black-owned Exempted Micro-Enterprises (EME) and Qualifying Small Enterprises (QSE) in the mainstream economy, as an effective way
to redress the economic imbalances of the past. For this reason it is imperative that we provide meaningful support to these entities and ensure that they become operationally
and financially independent.
Through our pledge for enterprise development, we are:
Looking ahead
Transnet’s commitment to Enterprise Development (ED) reaches further than just compliance. It is clearly aligned to our mandate as a state-owned company and serves
as our contribution to achieving Government’s socio-economic objectives.
Creating capacity for
junior B-BBEE coal miners through
various port and rail initiatives
Making allocation of new
port terminal sites a priority for
B-BBEE entrants
Investing in ED hubs across the country to
provide assistance to small and medium
businesses
Transnet aims to achieve a preferential procurement target for recognised B-BBEE spend of 65% of total measured procurement spend in 2015/16.
Our Total Measurable Procurement Spend (TMPS) with black women-owned companies should account for 3% of the TMPS budget.
By 2017, Transnet aims to be B-BBEE Level 1 compliant. We will boost employment equity levels, with a focus on women and people with disabilities.
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Transnet Design and Innovation Challenge and Research Centre _Through a partnership between Transnet, South African Bureau of Standards (SABS), Junior Achievement South Africa (JASA) and Wits Transnet Centre for Systems Engineering, the initiative aims to stimulate entry by black entrepreneurs, particularly black youth, into the high tech sectors through Innovation and Research & Development facilities: mentoring, design capability, funding, incubation and access to markets.
Transnet – Shanduka Incubation � A non-financial support service aimed at incubating 100% black-owned SMMEs, which can meet Transnet’s supply chain needs. The two Incubation Centres are currently running in Richards Bay (KwaZulu-Natal), and Eastern Cape (Port Elizabeth).
Container Bakeries � A partnership between Transnet and Umnyakazo to empower rural black women-owned co-operatives to run and operate container bakeries in their communities (Eastern Cape, KwaZulu-Natal and North West).
Productivity SA � The aim of the Transnet – Productivity SA initiative is to provide operational support to qualifying black-owned SMMEs who are Transnet suppliers to ensure that they meet Transnet demand and also to address challenges affecting operational performance that may be affecting product or service delivery. This is achieved through an 11-week programme aimed at the reduction of waste, improving utilisation of resources, efficiency and quality.
Enterprise Development Hubs � Provide an enabling environment for SMMEs to access products and services that are offered by both provincial and national economic development institutions (Gauteng, Western Cape, Northern Cape, Eastern Cape and Limpopo).
Transnet – GIBS Supplier Development Programme � The GIBS Enterprise Development Academy aims to empower new and existing growth-oriented entrepreneurs with a business education, mentorship and other support services in order for them to build or grow their enterprises.
Furniture Manufacturing Incubation � Through a partnership between Transnet and Furntech, this Centre of Excellence for the furniture industry offers business incubation and skills development, specifically for black people living with disabilities.
Nawe Zifunze Disabled Driving School & Computer Academy � Transnet has partnered with Vuka Academy and the Road Accident Fund to establish a driving school and computer academy for disabled people in Richards Bay.
Itereleng Fund � This strategic partnership between Transnet and Gauteng Enterprise Propeller provides financial and non-financial support to ensure SMMEs benefit from Transnet’s ED programme.
GODISA Fund � A collaboration between Transnet, Anglo American and Small Enterprise Finance Agency, the GODISA Fund provides both financial and non-financial support to Transnet black-owned suppliers.
Transnet – SEDA Supplier Development Programme � A partnership between Transnet and SEDA to develop, support and promote Transnet black-owned suppliers to ensure their growth and sustainability.
Transnet SMME Business Toolkits � Transnet has partnered with SAGE Pastel, who will develop 1 250 SMME business toolkits, covering all key areas of business management to our SMMEs.
AIDC Rapid Improvement Programme � This partnership between Transnet and the Automotive Industry Development Centre (AIDC) helps Transnet’s suppliers to improve their manufacturing and quality standards. It provides incubation and Lean Six Sigma training to increase the competitiveness of these entities.
ED INITIATIVES
MDS_29
SUPPLIERS WHO HAVE BENEFITED FROM THE MDS
Supplier Development (SD) means improving the
socio-economic environment as required by the New Growth Path (NGP) by creating
competitive local suppliers via Enterprise Development (ED), Competitive Supplier Development Programme (CSDP) and other initiatives such as preferential
procurement. This reduces capital leakage and creates a supply base that can be competitive on
the international market, leading to increased exports. The measured entity needs to spend
2% of net profit after tax towards SD initiatives to comply with the new codes
of good practice.
Transnet’s success in enterprise and supplier development has been achieved by directing our procurement spend to help small firms in areas historically dominated by a
few core suppliers to grow.
Rail 2 Rail (R2R), a 51% South African black-owned company, was awarded a contract to produce one million sleepers for Transnet within a five-year period.
Rail 2 Rail has grown from strength to strength with the continued support of Transnet Freight Rail. It recently extended its contract to supply another 630 000 concrete sleepers over the next two years. This has helped Rail 2 Rail create over 80 sustainable jobs and develop three new SMME entrants for aggregates, spare parts and business information systems. Companies benefiting from the R2R ED programme include Mitchel’s Plain Springworks and Salt River Springworks.
R2R has also put a plan in place to spend over 55% of its contract spend with local, women-owned, new
suppliers to increase its ED spend with qualifying BEE suppliers. This type of spend would not have been possible if it were not for the Transnet Freight Rail sleeper contract.
Freight Rail’s supplier development programme has enabled Rail 2 Rail. In addition to training and up-skilling Transnet’s own workforce, the programme offers scholarships for qualifying students. The programme has trained over 115 employees and increased the earning potential of skilled and semi-skilled members of the local community.
Siyahamba Engineering’s contribution to
transformation has led to Transnet awarding the company a number of contracts in the last
decade. This 90% black-owned entity has made a solid contribution to growth,
transformation and the creation of sustainable jobs through the
deployment of a labour-intensive production system.
Siyahamba supplied General Electric with window
and stone guards worth R3,2 million in 2013/14 and R897 million in 2014/15. The company’s expansion into a facility
which is 3600sqm larger has led to a 66% increase both production space and work force, in line with the organisation’s
overall business growth strategy.
Siyahamba also bought four new conventional milling machines,
doubling their manufacturing department’s key milling capacity.
A fibreglass supplier has been identified for development as an enterprise and supplier development initiative. This supplier has grown within the last 18 months and is now a key supplier for
Siyahamba’s fibreglass shrouds for the Shosholoza Meyl fleet.
MDS_31
THE IMPACT OF THE MDS ON INFRASTRUCTURE
DEVELOPMENTThe employment impact of the MDS on the economy is expected to create and/or
sustain 633 608 jobs across various skills levels economy-wide comprising direct and indirect contributions.
Transnet will step up recruitment in critical skills and expand its annual intake
3 145 new employees will join Transnet in 2015/16
67 202 permanent employees by 2021/22
Increased intake in schools of excellence
R1,16 billion will be spent on bursaries and grants from 2015/16 to 2021/22
2015 LE
2015/16
2016/17
2017/18
2018/19
2019/20
2020/21
2021/22
55 506
65 641
64 423
66 701
61 935
66 072
65 170
67 202
Company total employees (permanent)
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THE IMPACT ON INFRASTRUCTURE
DEVELOPMENT
Planned capital investment over this period is
R336,6bn
Seven-year capital investment by major project R billion
EXPORT COAL LINE expand rail capacity to 97,5mtpa 40,6
EXPORT IRON ORE LINE expand rail capacity to 60mtpa 21,5
MANGANESE increase port capacity to 16mtpa 20,0
GENERAL FREIGHT expand rail capacity to 202,6mtpa 147,1
MARITIME CONTAINERS expand capacity at ports to 10,1 million TEUs per annum 49,1
BULK SECTOR increase port capacity to 270,4mtpa (capacity at Port Terminals increases to 104,6mtpa)
15,8
BREAK-BULK SECTOR increase port capacity to 30,5mtpa (capacity at Port Terminals grows to 18,1mtpa)
2,9
PIPELINES NMPP investment to increase pipeline capacity to 8,7 billion litres per annum
13,9
OTHER 28,0
MaputoR1,1 billion / 0,3%
Richards BayR48,6 billion / 14,3%
DurbanR60,9 billion / 18,0%
South CorridorR38,8 billion / 11,4%
East London
NgquraPort Elizabeth
Cape TownR7,4 billion / 2,2%
Saldanha BayR22,7 billion / 6,7%
Sishen
NationalR159,4 billion / 47,0%
Seven-year capital investment by corridorBeit Bridge
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FREIGHTRAIL
TRANSNET
OUR PLANWe will develop a proactive culture
We will conduct frequent performance managementassessments
We will focus on skills development by means of trainingprogrammes
We will run as a scheduled railway to optimise capacity
We will continuously improve our product offering
We will improve the quality of our rail infrastructure
We will determine appropriate benchmarking targetsacross our operations
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FARMS
FACTORIESPOWER
STATIONS
DISTRIBUTION HUBS
MINES
AUTOMOTIVEPORT TERMINALSPORT TERMINALS
MULTI-PURPOSEPORT TERMINALS
CONTAINERPORT TERMINALS
BULK
FREIGHT RAILTRANSNET and the MDS
Freight Rail has set a goal of becoming one of the top five railway companies in the world by 2024 by:
•Movingfromarailfreightcarriertoanintegratedrail solution provider•Focusingitscorecompetencyonraillogisticsprovidingbundled solutions as new value propositions
After a period of careful planning and intense procurement, 2015/16 will arguably be the first year of intense execution of the programme
with a projected 120 locomotives expected to be received from October 2015 as part of the 1 064 locomotive acquisition programme
for the General Freight business.
We will continue to implement the R210,5 billion
seven-year capital investment programme
R210,5bnWe will shift freight from road to rail by increasing total rail volumes to 362,1mt
by 2021/22
362,1mtExport coal will be
increased from 75,5mt to 97,5mt
by 2021/22
97,5mtGeneral freight
volumes will be increased
from 90,1mt to 202,6mt
by 2021/22
202,6mt
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ENGINEERINGTRANSNET
We will grow revenue by diversifying into other markets
We will expand our technological know-how and grow our product offering
We will continue to focus on working as efficiently and safely as possible
We will focus on skills development
We will invest in the training and development of technical workers
OUR PLAN
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ENGINEERINGTRANSNET and the MDS
LOCOMOTIVEB U S I N E S S
Build, refurbish and repair locomotives
PORTSB U S I N E S S
Maintain straddlecarriers
AUXILIARYB U S I N E S SManufacture andrepair tarpaulins
FOUNDRYB U S I N E S S
Cast wagon components
ROTATINGMACHINE
B U S I N E S SRepair and fix
motors
WHEELB U S I N E S S
Manufacture and refurbish wheels
ROLLING STOCKEQUIPMENTB U S I N E S S
Manufacturecomponents
COACHB U S I N E S S
Build, refurbish and repair coaches
WAGONB U S I N E S S
Build, refurbish and repair wagons
BloemfonteinDurban
GermistonKoedoespoort
SaltriverUitenhage
Engineering has a number of external clients, including the Passenger Rail Agency of South Africa (PRASA). This business unit will play a
major role in expansion into Africa, strengthening partnerships with original equipment manufacturers, uplifting research and
development, and increasing the training of engineers, technicians and artisans.
We will optimise productivity and efficiency throughout the business
We will promote a pollution-free working environment
We will continue to pay special attention to risk management
Skills and technology transfer will benefit the local industry and support an increase in revenue and local job creation
We will increase our revenue to R18,5 billion
over the seven-year period.
R18,5bnWe will generate an
EBITDA of R2,2 billion
by 2021/22.
R2,2bnWe will invest
R7 billion for the seven years to grow
and maintain the locomotive fleet.
R7bn
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NATIONAL PORTS AUTHORITY
TRANSNET
OUR PLANWe will determine performance levels for each vessel that calls in South Africa
We will address marine operational issues such as delays, vessel movement and availability of marine resources
We will accelerate skills development through training and development
We will implement equipment replacement and maintenance programmes
We will institute a regular performance management programme
We will determine appropriate operational targets across all operations
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SA
LDA
NHA
|
CA
PE TO
WN
|
MOSSEL BAY
| P
ORT ELIZABETH
PORT LIMITS
TUGguide
vessels to berth.
DREDGINGSERVICES
Creates depth forvessels to navigate
through.
PORT TOWERCONTROL
Ensures the safenavigation of vessels and
dispatches pilots, tugs and berthing staff.
BERTHINGSERVICESDocking andundocking of
vessels. HARBOURMASTERThe harbour
master controlstraffic in and out
of the port
PILOT STEERSVESSEL
Trained portpilot taken by
boat orhelicopter tosteer vesselssafely to port.
BREAK WATERCreates a channel
for vessels tonavigate through.
PORT LIMITSVessels wait on
the perimeter for clearance from
the harbour master and for a
port pilot to steerthe vessel safely
into the port.
LIGHTHOUSES TENANTS TERMINAL OPERATORS LIGHTHOUSES
NGQURA | EAST LONDON | DURBAN | RICHARDS BAY
PORT LIMITS
NATIONAL PORTS AUTHORITYTRANSNET and the MDS
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National Ports Authority will:
Invest R3,4 billion in port infrastructure in 2015/16 and R52,7 billion over the seven-year MDS period
Increase container volumes across our ports by 4,0% per annum over the next seven years
Create an additional 400 000 TEUs of capacity at Durban Container Terminal Pier 2
Invest R24,4 billion in the expansion of container terminals throughout the port system
Increase the number of automotives going through our ports annually to 904 966 by 2021/22
National Ports Authority aims to enable regional integration by establishing South Africa as
a transshipment hub.
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PORT TERMINALS
TRANSNET
OUR PLANWe will drive growth and expansion
We will invest in infrastructure maintenance and expansion over seven years
We will increase our footprint in Africa offering improved connectivity to existing and new markets
We will create world-class operations by improving operational efficiencies and assets
67% of our total investment will focus on expansion projects
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CONTAINERTERMINALS
BULKTERMINALS
AUTOMOTIVETERMINALS
MULTI-PURPOSETERMINALS
PORT TERMINALSTRANSNET and the MDS
Port Terminal’s volumes will increase from 4,633 to 6,081 million TEUs
Port Terminals is a critical facilitator of cargo trade between South Africa and the rest of the world. Port Terminals
provides cargo-handling services at 16 terminals across the country.
Current capacity of 6,3 million TEUs positions us as an international gateway and facilitator of transshipment cargo.
Port Terminals has a 52% market share in the bulk sector.
Over the next seven years, Port Terminals plans to invest:
R51,3 billion in expanding and maintaining infrastructure and equipment R24,7 billion in containersR24,6 billion in bulkR1,2 billion in break-bulk R0,8 billion in automotives
will be spent to expand the Ngqura Container
Terminal
R1,9bnearmarked for
capacity-creating projects at
Richards Bay terminals
R10,8bnallocated to expand
the Saldanha Iron Ore Terminal
R5,5bn
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PIPELINESTRANSNET
OUR PLANWe will grow market share to facilitate the switch of petroleum product transportation from road to pipeline
We will concentrate on skills development, safety and environmental initiatives
We will improve operating efficiencies to ensure the continued competitiveness of pipeline fuel transportation
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PIPELINESTRANSNET and the MDS
Refined fuelsCrude oils
Aviation turbine fuelsMethane rich gas
DJP and NMPP12-inch and 24-inch
COALBROOK
SASOLBURGSECUNDA
ALRODE ORTIA TARLTON
R13,9 billion capital investment in Pipelines in the next seven years
R5,4 billion investment in the New Multi-Product Pipeline (NMPP)
Over 555km of new pipeline to increase capacity to the inland marketCapacity will increase from 4,4bl to 8,7 bl in per annum
Piped petroleum products will increase from 17 134Ml to 19 347Ml over the seven-year periodStorage volumes will increase from 683Ml to 814Ml over the same period
Pipelines are the most cost-effective, environmentally friendly, safe and reliable mode to transport petroleum and gas products. In support
of the MDS, Pipelines has shifted its business strategy from being a transport component in the logistics chain to be an
end-to-end logistics service provider.
Pipelines currently transports:
•Morethan65% of all refined product required for the inland market•Morethan70% of all jet fuel required at OR Tambo International Airport• 100% of the crude requirements for the Natref Refinery• 100% of the gas requirements to KwaZulu-Natal for Sasol Gas clients
In th
e pe
riod
201
5/16
to 2
021/
22
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FOUNDATIONTRANSNET
While expanding the business, we continue engaging with our community via the Transnet Foundation. The Foundation drives and implements the organisation’s corporate social investment
(CSI) initiatives, guided by the principles: ‘to do well, foster collaborative partnerships, community
engagements, long-term sustainability and relevance’.
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R218,5m investment in 2015/16 includes:
Primary healthcare services through on-board Phelophepa Train clinics and the Teenage Health Programme – R121,6mTeacher development – R2,3mYouth education development programme – R13,4mSport development in the Rural and Farm Schools Development Programme – R19,7mVolunteering opportunities for Transnet employees – R33,4mIncrease access to social services to communities along Transnet’s operations – R7,0mPromote football and academic performance to disadvantaged learners through the SAFA/Transnet Football School of Excellence – R17,0mHeritage Preservation – R4,1m
TRANSNET FOUNDATION AND THE MDS
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How will theMDS benefit SA?
Our infrastructure development programme will reduce the overall cost of doing business in South Africa
The switch from road transport to rail will reduce costs and carbon emissions
Upgrades and expansions will improve efficiency
We will address capacity constraints in many sectors of the economy–most significantly in mining
Addressing the underdeveloped freight system will enable South Africa to become competitive
Improved infrastructure can lower supply-chain costs of businesses in South Africa
Transnet National Ports Authority will optimise operational efficiencies to reduce the costs of trade
The increased capacity of the Port of Ngqura will make it a key transshipment hub between the East and the West
The upgrade of ports will enhance business, and be beneficial to South Africa’s trade relationships
Foreign investors are keen to invest in the programme
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Expand its mining and resource processing industries
Become an important thermal coal supplier for India and China
Maintain its position as a credible supplier of iron ore to both the domestic and export markets
Capture its rightful place as a leading manganese exporter globally
Become the regional container transshipment hub for sub-Saharan Africa
Create a reputation of world-class operational efficiencies
Position South Africa as the leading logistics hub in the region
The successful execution of the MDS will enable South Africa to:
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DID YOU KNOW?Transnet’s unique assets include:
132Engineering depots
20 500km
Freight railway network
16Port terminals
55 506Permanent staff
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8Commercial ports
3 800km
Pipelines
60 743Wagons
2 454Locomotives
www.twitter.com/follow_transnet•www.facebook.com/Transnet.SOC.Ltdhttp://www.linkedin.com/company/transnet-soc-ltd http://www.pinterest.com/TransnetSOCLTD/
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www.transnet.net