Transnet Strategy: Progress and review

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Transnet StrategyProgress and review

• 20 May 2005

One company, one vision
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Agenda

• Strategic direction
• Implementation plan
• Progress
• Infrastructure plans

One company, one vision
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Strategic direction
One company, one vision
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Our Mandate
Governments strategic agenda for economic
development
the public sector discharges its
responsibilities to our people as a critical
player in the process of the growth,
reconstruction and development of our country by
reducing the cost of doing business in our
country
President Thabo Mbeki, State of the Nation
address, May 2004
One company, one vision
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Strategic Direction
Strategic Intent

• Becoming a transport company that focuses on key
  segments of the market
• Separate operations and infrastructure
• Dispose of non businesses. Create focus on core
  business and drive future growth
• Restructure and streamline Corporate Centre to
  enhance accountability, corporate governance and
  operational efficiencies

Corporate Head Office
Rail Operations
Ports Operations
Pipeline Operations
Rail Infrastructure
Ports Infrastructure
Pipeline Network
SA Core Transport Infrastructure
One company, one vision
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Implementation plan
One company, one vision
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Implementation programme
Lower cost of doing business
Targeted sectors
Corporate governance and risk management
One company, one vision
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Progress
One company, one vision
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Progress since last meeting

• Kumba contract renegotiated
• MTN share structure unwind
• Spoornet turn around plan adopted
• Major infrastructure projects approved for
  implementation
• Key interface projects implemented
• Gauteng Durban corridor improvements
• Specific client interventions completed
• Governance structures in place
• Progress on head office restructuring
• Progress on non-core disposals
• Development of the enterprise wide risk
  management framework

One company, one vision
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Infrastructure plan
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Volumes and Investment per Corridor
Beit Bridge
Gauteng Mega Industrial Zone
Maputo
Richards Bay
Sishen
Durban
Saldanha
East London
Port Elizabeth
Cape Town
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Projects approved

• Widening and deepening Durban Harbour entrance
• Durban Pier 1 container terminal
• Cape Town container terminal
• Deepening of Cape Town berths
• Orex export channel expansion project
• Modernisation and refurbishment of Spoornet fleet
• Richards Bay multi purpose terminal upgrade
• Cape Town reefer infrastructure
• Durban-Johannesburg-Pretoria pipeline

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Consolidated infrastructure plan
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Major Rail Projects

• Improved profitability, efficiency safety
• Increase coal capacity from 71mta to 86mta by
  2007/08
• Increase general freight capacity from 14mta to
  19mta
• 4mta set aside for BEE
• Further investment of R9bn required to sustain
  this capacity
• Investment by NPA for additional berth 306 at a
  cost of R443m

Coal line capacity expansion (R2.5bn)
Wagon Fleet Renewal modernization (R4.1bn)
Upgrade of 200 18E Locomotives (R1.2bn)

• Upgrade of the wagon fleet
• Extend the life of wagons

Spoornet major projects

• Upgrading and over hauling the 6EIs to 18Es
• improvements in reliability and traction
• Reduced repair and maintenance costs.

Iron Ore line capacity expansion (R2.8bn)

• Support economic growth in the Northern Cape
• Optimize scarce resources and to capture market
  demand
• Affords sustainable profitability and increased
  productivity
• Recover the cost of the investment over the
  period
• Rand based tariff for the remaining period of
  contract
• Committed investment by SAPO of R920m for the
  expansion of the terminal

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Major Port Projects

• Durban 2005 expansion program
• Widening of the entrance channel
• Pier no 1 container terminal
• Deepening of Berrths

Durban Port Investments (R4.5bn)
Ports (NPA SAPO) major projects
Cape Town Container Terminal expansion (R1.9bn)

• Stimulates sustains economic activity in the
  Western Cape
• Increase in stacking capacity by 226k TEU by 2008
  and to 1.6m TEU by 2017
• To meet productivity expectations of customers

Port of Ngqura (R4.1bn)

• Alignment with govt. objective to foster economic
  development
• The port expected to be operational by Oct 2005
• No dedicated traffic to this port
• Several options being considered for the revenue
  generation

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NPA Strategic Projects
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SAPO Strategic Projects
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MAJOR PROJECT PETRONET

• New Multi-purpose pipeline (R3bn)
• Replacement of ageing asset
• Addresses the high risks of failure on the
  environment
• Provide additional capacity to meet the expected
  capacity constraints
• Alignment with govt.s objective of economic
  growth and a supply of
• environmentally safe transport mode for
  petroleum products.

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SPECIFIC CAPITAL PROJECTS IN PROGRAMME WITH
CORRIDOR FOCUS

• Our New Multi Product Pipeline (NMPP) to enhance
  our capacity - needs between Durban and Gauteng.
  To be completed 2010.
• Cost R 3 billion.
• Our refractionator project to ensure that
  Petronet meets the quality of petroleum product
  specification of Government by early 2006.
• Cost R 100 million
• Debottlenecked gas line (phase 2) to
  Kwazulu-Natals industries (Lilly 2 project)
• Cost R 400 million.
• Petroleum pipeline from Maputo to Gauteng (Part
  from Nelspruit to Witbank).
• Cost R 620 million.

PPT-1213
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SPECIFIC CAPITAL PROJECTS IN PROGRAMME WITH
CORRIDOR FOCUS
5. Complete implementation of Telecontrol
project. Cost R 100 million 6. Our
terminalling and logistics initiative. Cost R
300 million 7. Extension of the Multi-products
pipeline from Gauteng to Beit Bridge (initial
phase of project in 2010). Cost R 100
million Total in period 2005 2010 R4.6
billion
PPT-1214
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Transnet
One company, one vision