INTEGRATION OF PORTS AND RAILWAYS IN SOUTHERN AFRICA SARA-International Conference Earle Peters National Planning Executive Transnet Port Terminals TABLE OF CONTENTS TRANSNET SOC LTD TRANSNET FREIGHT RAIL TRANSNET RAIL ENGINEERING TRANSNET NATIONAL PORTS AUTHORITY TRANSNET PORT TERMINALS MARKET DEMAND STRATEGY PORT DEVELOPMENT FRAMEWORK PORT-RAIL INTERFACE PAGE 1 DELIVERING FREIGHT RELIABLY • “The only real mistake is the one from which we learn nothing.” • “If I had asked people what they wanted, they would have said faster horses.” • “Failure is simply an opportunity to begin again, this time more intelligently.” • “Whether you think you can, or you think you can't …you're right.” - Henry Ford PAGE 2 TRANSNET OPERATES AN INTEGRATED PORT, RAIL AND PIPELINE NETWORK Musina Louis Trichardt Groenbult Lephalale Polokwane Phalaborwa Modimolle Komatiepoort Mafikeng Pretoria Nelspruit Johannesburg SWAZILAND Klerksdorp Ermelo Vereeniging Hotazel Vryburg Pudimoe Kroonstad Vryheid Nakop Sishen Veertien Strome Virginia Upington Bethlehem Harrismith Kimberley Ladysmith Bloemfontein Kakamas Richards Pietermaritzburg Bay LESOTHO Halfweg Durban Harding De Aar Aliwal North Port Shepstone Sakrivier Maclear Noupoort Calvinia Hutchinson Rosmead Umtata Hofmeyer Queenstown Beaufort West Cookhouse Blaney Saldanha Klipplaat Alicedale East London21,000 Km Rail Network Worcester Oudtshoorn Port Alfred 179 Million Tons of Cargo pa Cape Town Port Elizabeth Mosselbaai Knysna 4.3 Million TEU’s pa 17.8 Billion litres of fuel, oil PAGE 3 TRANSNET STATE OWNED COMPANY LTD - OPERATIONAL DIVISIONS Supporting • 16 Cargo Terminals operating across 7 SA ports • Revenue 7 bn • Assets R13.5 bn • 6 324 employees PAGE 4 TRANSNET SOC LTD - STRATEGIC GOVERNANCE FRAMEWORK Mr. Brian Molefe Group Chief Executive Mr. Anoj Singh Chief Financial Officer Mr. Khomotso Phihlela Group Executive: Commercial Mrs Nonkululeko Sishi Group Executive: Human Resources Mr. Mark Gregg-Macdonald Ms. Nonkululeko Mabandla Group Executive: Group Executive: Planning and Monitoring Legal Services + Chief Executives Operating Divisions 5 Mr Tau Morwe Mr Karl Socikwa Mr Siyabonga Gama Mr Richard Valihu Ms Sharla Pillay Mr Charl Möller Ms RaisibePAGE Lepule TRANSNET’S VISION…. DELIVERING FREIGHT RELIABLY Transnet will meet customer demand for reliable freight transport and handling services through: • Fully integrating and maximising the use of our unique set of assets • Continuously driving cost efficiencies • A demonstrated concern for sustainability in everything we do PAGE 66 FINANCIAL AND OPERATIONAL PROFILE Turnover • Would rate in the Top 25 of the biggest SA listed firms ito turnover, if Transnet SOC Ltd was listed $ 7.2 bn • Contributing 1.5% to SA GDP EBITDA • Used to develop infrastrucure and reduce the cost of doing $ 3 bn business by increasing capacity and enhancing productivity • In Top 10 of SA’s biggest firms ito assets Assets $ 24.2 bn • Requires substantial maintenance to continue operating efficiently Capital Investments* • Equates to 75% of the Asset Base $ 40 bn Employment • Transnet ensures the development of skills through training and development 63,725 • 56,354 (excluding contractors) All stats based on 2012/13 Corporate Plan – unless otherwise stated *Planned investments over the next 7 years PAGE 7 FIRST HALF 2012 RESULTS • Revenue up by 11% to R24,9 billion for first half of 2012. • EBITDA up 7,1% to R10,1 billion. • Cash generated from operations after working capital changes increased by 18,1% to R9,8 billion. • Transnet employed an additional 1,752 new people while creating 6,704 new jobs in supplier-related industries. Thus 8,456 new direct and indirect jobs created – meeting New Growth Path objectives. • Rail volumes up by a significant 7,5% - more than 3 times GDP growth in spite of Euro-crisis. • At Transnet Freight Rail automotive and container volumes up 19% on the previous period. • The manganese and iron ore unit grew volumes by 11,2% to 31,7 million tonnes, achieving record- breaking weekly performances along the way. • Coal volumes increased by 7,8% to 41,6 million tonnes • At the ports, container and automotive volumes were slightly lower and flat respectively, in line with the slowdown in economic growth. • Transnet Port Terminals recorded a substantial increase in efficiency levels. • Average moves per gross crane hour (GCH) improved to 28,4 GCH at the Durban Container Terminal’s Pier 2, from 19,6 GCH in the previous period. • The Richards Bay Dry Bulk Terminal’s loading rate increased by 3,8% from 691 tons per hour to 717 tons per hour. PAGE 8 FIRST HALF 2012 RESULTS • Capital expenditure of R12,8 billion during first half of 2012: • Transnet invested R354 million in the iron ore expansion projects and locomotive acquisitions; • Invested R623 million in the expansion projects & the acquisition of Class 19E locomotives for the coal line; • Spent R6,1 billion on the upgrade and maintenance of infrastructure and rolling stock for the General Freight Business; • Approved the acquisition of 2,346 wagons for a total cost of R2,0 billion; • Invested R225 million in container handling equipment for the Durban Container Terminal; • Spent R148 million on the expansion of the Cape Town Container Terminal; and • Invested R1,2 billion on the New Multi-Product Pipeline. • During the period under review, the company successfully raised R14,7 billion through various funding sources, including the global medium-term note (GMTN) programme; the African Development Bank, domestic bonds and commercial paper. • Transnet issued a US$1 billion 10-year bond at a coupon (interest) rate of 4.00% - the highest amount of cash ever raised by Transnet in a single bond issuance without a government guarantee. • Cash interest cover remains strong at 3,3 times compared with 3,1 times in the same period last year. • Moody’s S&P has decided to maintain Transnet’s credit rating despite downgrading the sovereign. This wont affect Transnet’s ability to access the debt capital markets. • Broad based black economic empowerment (BBBEE) spend, increased to R14,68 billion or 85% of total spending PAGE 9 Southern Hub for World Shipping Routes The position of South Africa’s ports system enables it to access to South- South trade, Far East trade, Europe & USA, East & West Africa regional trade PAGE 10 THE AU HAS IDENTIFIED 14 CORRIDORS AS THE MAIN AFRICAN CORRIDORS THAT NEEDS DEVELOPMENT Alger Tunis Kenitra Casablanca Rabat TUNISIA Tripoli MOROCCO Cairo 2 ALGERIA LIBYA EGYPT WESTERN SAHARA MAURITANIA CAPE VERDE 3 MALI NIGER Touba-Mbacke ERITREA Khartoum Dakar SENEGAL CHAD Aamara Bamako Niamey GAMBIA Banjul BURKINA DJIBOUTI GUINEA-BISSAU Bissau FASSO 5 GUINEA Quagadougou N’Djamena SUDAN NIGERIA Conakry BENIN Addis SOMALIA 6 Freetown SIERRA TOGO Ababa LEONE COTE GHANA Ibadan ETHIOPIA Monrovia D’IVOIRE 1 Kenitra-Casablanca Corridor 4 Lomѐ CENTRAL AFRICAN Lagos REPUBLIC LIBERIA Cotonouѐ CAMEROON Abidjan Bangui 2 Greater Cairo Region Accra Douala Yaound UGANDA KENYA EQUATORIAL GUINEA 6e Mogadishu 3 The Dakar-Touba corridor (Touba-Mbackѐ) REP. DEM. REP. 7 Kampala TOGO Libreville OF THE OF THE CONGO Entebbe 8 CONGO SAO TOME GABON 4 The Greater Ibadan-Lagos-Accra (GILA) urban corridor AND PRINCIPE RWANDA Nairobi Brazzaville Kigali Kinshasa BURUNDI 5 The great Haoussa-Yoruba-Anshanti city triangle (GHAYA-CT) 6 Bujumbura TANZANIA Dar es Salaam 6 The Emerging Luanda-N’Djamena corridor Luanda ANGOLA 7 The Kampala-Entebbe corridor MALAWI ZAMBIA Ciudade 8 Lilongwe Nairobi metropolitan region Lusaka de Nacala 10 Harare MADAGASCAR MOZAMBIQUE 9 Walvis Bay corridor NAMIBIA ZIMBABWE 13 Beira Antananarivo Windhoek BOTSWANA 10 10 North South corridor (Cape Town-Johannesburg-Harare-Lusaka) Walvis Bay 9 10 Gaborone MAURITIUS 14 11 The Maputo-Gauteng development corridor Johannesburg 11 Maputo REUNION SWAZILAND 12 Durban development corridor 10 12 SOUTH LESOTHO AFRICA Durban 13 Beira corridor President Zuma chairs the North South Corridor on behalf of NEPAD and AU** Cape 14 Maputo-Limpopo corridor Town Source:E&Y Report – Time for Africa PAGE 11 NGQURA AS A HUB PORT FOR TRANSSHIPMENT TRAFFIC WILL ENABLE REGIONAL INTEGRATION Monrovia Lome (Liberia) Takoradi (Togo) Lagos (Ghana) (Nigeria) Cotonou Tema (Benin) Onne Abidjan San Pedro (Ghana) (Nigeria) (Côte d'Ivoire) (Côte Douala d'Ivoire) (Cameroon) Libreville (Gabon) Dar es Salaam Pointe Noire (Tanzania) (Congo) Tanga (Tanzania) Mombasa (Kenya) Nacala (Mozambique) Toamasina Beira (Madagascar) (Mozambique) Port Louis Walvis Bay (Mauritius) (Namibia) Maputo (Mozambique) Richards Bay (SA) Durban (SA) East London (SA) Cape Town Port Elizabeth (SA) (SA) Source: Team analysis PAGE 12 TRANSNET FREIGHT RAIL PAGE 13 OVERVIEW FREIGHT RAIL OVERVIEW • Transnet Freight Rail is the largest division of Transnet. It is a world class heavy haul freight rail company that specialises in the transportation of freight. • Transnet Freight Rail has approximately 28 000 employees, who are spread throughout the country. • The company maintains an extensive rail network across South Africa that connects with other rail networks in the sub-Saharan region, with its rail infrastructure representing about 80% of Africa's total. • The company is proud of its reputation for technological leadership beyond Africa as well as The company is made up of the following six with-in Africa, where it is active in some 17 business units: countries. • Agriculture and Bulk Liquids • Transnet Freight Rail has positioned itself to • Coal Business Unit become a profitable and sustainable freight • Container and Automotive