transnet capital expansion programme...transnet rail engineering r4,1 bn •equipment - r2 bn...
TRANSCRIPT
1
Transnet Capital Expansion Programme
ONE PROGRAMME
TWO HUGE CHALLENGES
ANN WILSON
CPO TRANSNET CAPITAL PROJECTS
Transnet’s Vision And Mission
Transnet Limited is a focused freight transport company delivering:
Integrated, efficient, safe, reliable and cost effective services which help promote economic growth in South Africa
PROVIDING
Market share
Productivity and profitability
Capacity for customers ahead of
demand
IMPROVED
INCREASED
2
Discontinued businesses
Transnet
Freight Rail
RAIL
Transnet
Rail Engineering
TRANSNET COMPANY
PORTS
National
Ports Authority
Transnet
Port Terminals
Transnet Pipelines
PIPELINE
Operating divisions(continued businesses)
• SA Express
• Transtel Telecoms
• Viamax
• Autopax
• freightdynamics
• Housing Loan Book
• Shosholoza Meyl
• Arivia.kom
DiscontinuedBusinesses
Supporting businesses: Property, Capital Projects
Structure to support strategy
Market Challenges: 2012 - 2030
Commodity 2013 → 20302007→ 2012Current requirement
Vehicles
Containers
Coal
Liquid bulk
Manganese
Iron ore
1 500 000 units
42 million tons
8.8 million tons
92 million tons
92 million tons
13.5 million TEU
~ 3 x60 million tons30 million tons
~ 4 x600 000 units400 000 units
~ 8 x15 million tons5.2 million tons
~ 4 x6.3 million tons2.1 million tons
~1.35 x84 million tons68 million tons
~ 4 x4.8 million TEU3.3 million TEU
3
All Operating Divisions have high growth expectations over the next 5 years
6030
2006/07 2011/12
+100%
8467
+25%
10880
+35%GFB
Mv
Coal exportMt
Ore exportMt
Freight rail
Pipelines
13.99.9
2006/07 2011/12
+40%Refinedproducts
b.lit
NPA/Ports Terminals
3,4004,800
+41%
555,000
2006/07
925,000
2011/12
+67%
ContainersTEUs
Auto-mobiles
UnitsMajor volume growth for
• Coal (domestic) : 7• Manganese : 3• Iron and Steel : 3
Capex Spending (Continuing Businesses)Five-year Plan: R78 Billion
* Latest estimate R11.2bn
13%
Pipelines
Port Terminals
12%
National Ports Authority
24%
Rail Engineering
5%
Freight Rail
45%
PIPELINETransnet Pipelines R11 bn• Multi-product pipeline – R10,9 bn• Gas line upgrading – R0,2 bn
PORTSTransnet Port Terminals R9,5 bn• Durban – R0,9 bn• Richards Bay – R0,7 bn• Ngqura – R1,5 bn• Cape Town – R0,4 bn• Saldanha – R2,9 bn
PORTSTransnet NPA R18,5 bn• Richards Bay – R0,8 bn• Ngqura – R4,7 bn• Cape Town – R3,8 bn• Durban – R7,6 bn• Floating craft – R0,7 bn
RAILTransnet Rail Engineering R4,1 bn• Equipment - R2 bn• Upgrade of facilities – R1,1 bn
RAILTransnet Freight Rail R34,8 bn• Coal Line – R4,9 bn• Ore Line – R3,8 bn• General Freight – R15,3 bn• Maintenance
Capitalisation – R10,8 bn
*
Infrastructure investment driven by National Infrastructure Plan – 5 year rolling plan, 30 year framework – based on market predictions and customer
requirements
4
THE INFRASTRUCTURE CHALLENGE
CAPE TOWN CONTAINER TERMINAL Upgrade to a modern deep water 4-berth container terminal to handle 1.4 million TEU p.a. throughput at the Port
ReconfigurationBasin Deepening
Container Handling Equipment
Quay Refurbishment
5
PORT OF NGQURA
Port of Durban
6
Durban Harbour Entrance WideningExecution Phase
Widen the Entrance Channel
121m to 220m
Deepen the Entrance Channel
12.8m to 19m/17m/16m
Sand by Pass System
Durban Point Car Terminal – Ph 1Feasibility / Execution Phase
7
Re-engineering of DCT Execution Phase
End April 08• Efficiency improvements (truck stop)
Complete• Reconfiguration of the existing DCT stacking
areas
End July 10• Repairs, maintenance and upgrade of DCT infrastructure
End Nov 09• Provision of additional stack space at Y-Site and
relocation offacilities
Completion DateProject Schedule
Pier 1 Status 15 December 2007General Photograph
8
Marine Programme Maydon WharfFeasibility Phase
All Marine works requirementsInfrastructure requirements and supporting services
Verification of the rail capacity requirements Environmental specialist studies
Quay wall refurbishment
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BAYHEAD EXPANSIONCurrent Layout
BAYHEAD EXPANSIONArtist’s Impression of Proposed Layout
•Phase 1 (6 berths, 3.7 mil TEU’s) Cost R37.7B (R 10,189/TEU)
•Phase 2 (5 berths, cum. 3.1 mil TEU’s) Cost R20.1B (R 6,484/TEU)
•Total 6.8M TEU, R57.8B
10
Port of Richards Bay Layout
Richards Bay Container Terminal & MPT ExpansionFeasibility Phase
Estimated
Contract Value Summary
Interim Works
Paving
> R250m
> Mar 08 – Jul 09
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Contents 1
Contents 1
Contents 1Contents 1
Oreline Expansion ProgrammePhase 1A / 1B & 1C Expansion Update29 Mtpa 39 Mtpa (1A) 45 Mtpa (1B) 58 Mtpa (1C)65 Mtpa (2A) 90Mtpa (2B) : Export
Loop 19
Postmasburg Link
Loop 1
Loop 2
Loop 3
Loop 4
Loop 5
Loop 6
Loop 7ALoop 8
Loop 10Loop 9
Loop 11 Loop 12
Loop 13 Loop 14
Loop 15 Loop 16
Loop 17
Loop 18
Salkor North
Salkor Yard
Port Link
Rail Scope
• Loop Extensions
• Salkor Yard Upgrade
• New North Loop
• New Loco Workshop
• Formation Repairs
• Feeder Line Upgrade
• Eskom Supply Upgrade
• New Rail Link – Sishen South
• Train and Formation Maintenance Equipment
Oreline Expansion ProgrammePort Scope
• Reclamation
• Roads & Underground Services
• New By-pass Conveyor
• New Stacker Reclaimers
• RO Plant
• Power and System Upgrade
• Dredging & Staggered Shiploading
Reclaimed area
S/R 4
12
• Refurbishment of the Dry Bulk Terminal – Port of Richards Bay
• Manganese Export Terminal Refurbishment – Port Elizabeth
• New Manganese Export Terminal Feasibility Study – Port of Ngqura
• Orex Terminal Ship Loader Trippers Redesign and Build – Port of Saldhana
SPECIAL PROJECTS – Current Assignments
SPECIAL PROJECTSRichards Bay Dry Bulk Terminal
• Upgrades to 40 km of Conveyors• Refurbishment of two (2) wagon Tippers• Extension of Conveyor P1 / P2 Gantry• Refurbishment of Ship Loaders and unloaders
(x 11)• Infrastructural Upgrades and Refurbishments• Operational and Maintenance Improvements
13
SPECIAL PROJECTSPort Elizabeth 4.2 Mtpa Manganese TerminalRefurbishment
PE Port
Ngqura Port
Stockyard Stacker & Reclaimer
14
TipplerTippler
Shiploader
15
INDIANINDIANOCEANOCEAN
DURBANDURBAN
HOWICK
LADYSMITHLADYSMITH
BETHLEHEM
VOLKSRUST
NEWCASTLEKROONSTAD
KLERKSDORP
POTCHEFSTROOM
WITBANK
WALTLOOWALTLOOPRETORIA WEST
SECUNDA
STANDERTON
ALRODEALRODE
COALBROOKSASOLBURG
SCHEEPERSNEK
MAHLABATINI
HILLCREST
TARLTON
LESOTHO
NATAL
FREE
STATE
GAUTENG
ø457,2
ø406,4ø323,8
QUAGGA
N
RUSTENBURG
MAGDALA
NORTH - WESTMPUMALANGA
KWAZULU /
AIRPORT
VRYHEID
RICHARDS BAY
( 18" )
( 16" )( 12" )
ø457,2
(18")
ø406,4
( 16" )
BHT
MEYERTON
MNGENI
VAN REENEN
DUZI
INGOGO
WILGE
LANGLAAGTELANGLAAGTE
FORT MISTAKE
EMPANGENI
VREDE
MOOIRIVER
“T”
Coastal Terminal /
Pump Station # 11
6
10
Pump Stations
#2 and #6
Inland Terminal &
Pump Station
16” JP to Alrode (ALR) &
16”ALR to Langlaagte
16” Kendal to Waltloo
2
JAMESON PARKJAMESON PARK
KENDAL
INDIANINDIANOCEANOCEAN
DURBANDURBAN
HOWICK
LADYSMITHLADYSMITH
BETHLEHEM
VOLKSRUST
NEWCASTLEKROONSTAD
KLERKSDORP
POTCHEFSTROOM
WITBANK
WALTLOOWALTLOOPRETORIA WEST
SECUNDA
STANDERTON
ALRODEALRODE
COALBROOKSASOLBURG
SCHEEPERSNEK
MAHLABATINI
HILLCREST
TARLTON
LESOTHO
NATAL
FREE
STATE
GAUTENG
ø457,2
ø406,4ø323,8
QUAGGA
NN
RUSTENBURG
MAGDALA
NORTH - WESTMPUMALANGA
KWAZULU /
AIRPORT
VRYHEID
RICHARDS BAY
( 18" )
( 16" )( 12" )
ø457,2
(18")
ø406,4
( 16" )
BHT
MEYERTON
MNGENI
VAN REENEN
DUZI
INGOGO
WILGE
LANGLAAGTELANGLAAGTE
FORT MISTAKE
EMPANGENI
VREDE
MOOIRIVER
“T”
Coastal Terminal /
Pump Station # 11
6
10
Pump Stations
#2 and #6
Inland Terminal &
Pump Station
16” JP to Alrode (ALR) &
16”ALR to Langlaagte
16” Kendal to Waltloo
2
JAMESON PARKJAMESON PARK
KENDAL
NEW MULTI PURPOSE PIPELINE (NMPP)
Transnet Pipelines NMPP Project
• Terminals
– Coastal Terminal
• 2 X 20 000 m3 tanks contained in concrete bunds
• 4 X 40 000 m3 tanks contained in concrete bunds
– Inland Terminal
• 2 X 20 000 m3 tanks contained in concrete bunds
• 4 X 40 000 m3 tanks contained in concrete bunds
• Pipeline
– 535km of 24” pipeline
– 170km of 16” pipeline
– 4 pump stations
• 2 along the route
• One at each of the terminals
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THE SOCIO ECONOMIC CHALLENGE
SOCIAL ECONOMIC CHALLENGE
•Expanded Public Works Programme & ASSGISA
•Poverty alleviation & local labour
•Significant Skills Shortage
•Industry Representative of Countries Demographics
•Development of Emerging Contractors
•Sustainable & Competitive Industry
•NEC3 contract administration skills
•Safety Culture - 0.25 LTI frequency rate target
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“INSANITY IS DOING THE SAME THING OVER AND OVER AND EXPECTING A
DIFFERENT RESULT“
SOMETHING NEEDS TO CHANGE IN ORDER TO DELIVER BOTH OBJECTIVES
SUCCESSFULLY
DIFFERENT APPROACH TO DELIVERY
The way employer and contractors engage needs to change.
We need to work in collaborative partnershipstowards a common goal in such a way that
maximises the skills and knowledge available and incentivises both parties to achieve this; ultimately creating a win – win – win for the
Employer, Contractor and South Africa.
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SUMMARY OF CONTRACTING CONTRACT OPTIONS
STRATEGY FOR THE NMPP PROJECT
Project Construction Contracts based on
NEC3 ECC
Pipeline Contractor
Pump Station & Terminals Contractor
Tanks Design & Construct Contractor
System Wide Contracts
• Automation• Communications• SAP Integration
ECC Option CWith Over Arching Agreement
ECC Option C or DWith Over Arching Agreement
ECC Option A or C
ECC Option dependant on scope
Arup/Warley Parsons
AllianceDesign, Part
Procurement and Client
Project Management
PIPELINE CONTRACTWhy Option C• Status
– Work scope not fully defined and requires detailed design and engineering;– Need for further Site Investigation;
– Final materials quantification, identification and delivery to be worked out– Opportunity to develop methodology to reduce cost
• Option C provides for risk sharing for the uncertainties to reduce the overall Contractor’s risk in undertaking the Works;
• The final cost will be visible and verified;
• Financial incentive exists to reduce cost, deliver socio economic objectives and share in the savings
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Contract Data Review
KPI’s & Share Range
• Introduced Key Performance Indicators (KPI’s)– These will be used to assess overall performance against wider objectives
and the final score will adjust any Share generated under pain/gain share Clause• i.e. Total share 500,000 ZAR KPI score 96% = share adjusted to 480,000
• Option C, provides for a share range to assess the sharing of any cost under or over the Agreed Target
– i.e. if the cost is 150,000 less than the Agreed Target which may equate to 97% of the Target then the calculation is 150,000 x 45% = 67,500 paid to the Contractor in addition to the Actual Cost with the same principle applied to over spend
PROPOSED CONTRACTING RELATIONSHIP
EPCM AllianceArup
WorleyParsons
(The Consultant)
PSC with contractual roles
& responsibilities
Transnet (The Employer)
Pipeline Contractor
(The Contractor)
ECC Option C with contractual
roles &
responsibilities
OVERARCHING AGREEMENT
PSC with contractual roles & responsibilities
remain
ECC Option C
with contractual roles &
responsibilities remain
The Project Manager & Supervisor
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OVERARCHING AGREEMENT
The purpose / basis of the Agreement is:
• Sets out working arrangement that ties the Employer, the Consultant and the Contractor together to jointly manage a “project target cost”
• Reduces interfaces between the parties and avoids shadow management
• Drives the Parties to all pull together as each party is responsible for the Total Project Budget and can share in the rewards of efficiency whilst ensuring inefficiently is also shared
• All existing contractual liabilities between the Employer & the Consultant and the Employer & the Contractor remain in place.
• Establish and define the roles and responsibilities of the Parties to enable them to work as members of a team focussed upon the successful delivery of the Project
• So far as is necessary amends the Works Contract and the EPCM Contract
• Establish the principle for the operation of a Supervisory Board (to collectively make decisions for the good of the Project)
• Establish the revised incentive arrangement
OVERARCHING AGREEMENT
• Establishes a “Project Target Cost” that the parties are jointly responsible for and manage with all parties being focused on driving down cost, improving quality and ensuring timely delivery
• The “Project Target Cost” includes all elements of the project that the parties have an influence upon
• Includes a normal contingency allowance jointly agreed, built up by a series of Quantitive Risk Analysis Workshops involving recognised Risk Analysis software such as Pallasade @ Risk & Monte Carlo simulation
• The Parties accept by the inclusion of the “Risk Allowance” into the “Project Target Cost,” the “Project Target Cost” is capped with no changes or Compensation Events allowed
• The Win / Win is to ensure the project comes in under the “Project Target Cost”, with all parties benefiting from a share of the savings, whilst delivering all the objectives of the project.
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In Summary
Expanding our toolkit, being flexible in our
contracting approach and working collaboratively to
fully utilise the skills and resources available to us,
will ensure South Africa emerges from the Expanded
Works Programmes with the infrastructure it requires
to ensure continued economic success and with a
skilled, sustainable and representative construction
industry to deliver the next wave of development.