Meeting the freight logistics challenge Presentation to the Portfolio Committee on Transport Maria R

1
Meeting the freight logistics challengePresentati
on to the Portfolio Committee on TransportMaria
RamosGroup Chief ExecutiveTransnet Limited2
August 2007
2
Structure

• Context
• Freight system challenges
• What the NFLS says
• What Moving South Africa says
• Transnets view
• The freight demand model
• Demand forecasts
• The container value chain
• How is Transnet responding to the challenges?
• Turnaround Strategy
• How has Transnet performed to date?
• Progress on the turnaround strategy
• Financial performance
• Where will we focus going forward?
• Integrated objectives
• Infrastructure
• Long term
• 5 Year Plan

3
Efficient and effective freight logistics is
critical to economic growth

• Global economic liberalisation and advances in
  transport and ICT have given rise in recent years
  to high levels of global sourcing in many
  production systems
• Imports by high-income countries from developing
  countries have risen from below 15 percent in the
  1970s to nearly 40 percent today, and their share
  is expected to rise to more than 65 percent by
  2030 (World Bank, 2006)
• Supply chains have emerged as key competitive
  weapons as goods become increasingly commoditised
• This requires our international supply chains to
  be globally competitive in terms of cost, speed,
  reliability, flexibility and reach

Transnet is focused on delivering a world class
integrated bulk freight logistics system that
will provide local firms with a competitive
advantage
4
The South African freight system is far bigger
than Transnet
Source NFLS, 2005
This view of the system players ignores the very
important role played by shipping lines
5
Structure

• Context
• Freight system challenges
• What the NFLS says
• What Moving South Africa says
• Transnets view
• The freight demand model
• Demand forecasts
• The container value chain
• How is Transnet responding to the challenges?
• Turnaround Strategy
• How has Transnet performed to date?
• Progress on the turnaround strategy
• Financial performance
• Where will we focus going forward?
• Integrated objectives
• Infrastructure
• Long term
• 5 Year Plan

6
What the NFLS says The problem statement

• The freight system in South Africa is fraught
  with
• Inefficiencies at system and firm level
• Structural infrastructure shortfalls and
  mismatches
• A lack of integrated planning
• The skills base is deficient
• Information gaps and asymmetries abound
• The institutional structure of the freight system
  is inappropriate and
• The regulatory frameworks are incapable of
  resolving the problems in the industry

7
What the NFLS say The system challenge
8
Structure

• Context
• Freight system challenges
• What the NFLS says
• What Moving South Africa says
• Transnets view
• The freight demand model
• Demand forecasts
• The container value chain
• How is Transnet responding to the challenges?
• Turnaround Strategy
• How has Transnet performed to date?
• Progress on the turnaround strategy
• Financial performance
• Where will we focus going forward?
• Integrated objectives
• Infrastructure
• Long term
• 5 Year Plan

9
What MSA says Key strategic challenges

• Export competitiveness
• Lack of alignment for value added exports
• Barriers to cross border SADC traffic
• System sustainability
• High systems cost of domestic freight
  (externality costs)
• Sustainability of the freight industry
• High systems costs together with significant
  resource constraints, create a dynamic of a
  gradually deteriorating and eventually,
  financially unsustainable system

10
What MSA says Lack of alignment makes it
difficult to address the challenge

• The system lacks proper alignment
• There has historically been no institution or
  grouping of institutions with the function of
  integrating across the individual components of
  the system
• Each component of the system has been managing to
  its own narrow objectives
• Components of the system have therefore maximised
  against an unintegrated set of constraints and
  towards an unintegrated set of objectives

South Africa has been unable to overcome this
challenge An integrated Transnet can go a long
way towards overcoming this challenge
11
Structure

• Context
• Freight system challenges
• What the NFLS says
• What Moving South Africa says
• Transnets view
• The freight demand model
• Demand forecasts
• The container value chain
• How is Transnet responding to the challenges?
• Turnaround Strategy
• How has Transnet performed to date?
• Progress on the turnaround strategy
• Financial performance
• Where will we focus going forward?
• Integrated objectives
• Infrastructure
• Long term
• 5 Year Plan

12
Transnets view of the freight system challenges

• The challenges identified by the NFLS and MSA are
  valid
• Transnets turnaround strategy is aimed at
  addressing these challenges
• Transnet has identified additional challenges
  through the freight demand model and analysis of
  the container market

13
Freight demand model

• The model was developed in August 2006 to assist
  with long term capacity planning
• A first of its kind in South Africa
• Modelling risk mitigated through stringent
  verification procedures which included
• Utilising multiple sets of economic forecasts
• Comparing modeled flows against actual Transnet
  Freight Rail (previously Transnet Freight Rail)
  flows and outputs of SANRALs national freight
  flow model
• Interviews with industry analysts, customers and
  supply chain experts to confirm forecasts and
  verify flows for the top 23 commodities
  comprising more than 90 percent of the total
  freight demand by weight
• Model results were closely aligned with previous
  assumptions of long term demand for the ports

14
A pareto based combination was adopted. The
modelling framework provided a economic structure
which was then enhanced with empirical research
for 90 of total GDP by weight.

• Verify with
• Known flows
• Rail data
• National freight flow model

Actual data based on publications and personal
interviews
National I-O model
Apportionment - Supply and demand per commodity
on a geographical basis
Allocation - Flows per commodity
Macro-economic data
Macro-economic forecast
Commodity forecasts
Parameters 354 magisterial districts 95
commodity groupings
The total output was compared to the national
freight flow model (SANRAL) and strong
correlation on corridor and rural flows confirmed
a high degree of accuracy.
15
South Africa is a transport intensive economy
Our long transport corridors is the key reason
behind this abnormal demand Transport needs to
be especially efficient to overcome this challenge
Source Supply Chain Management Centre,
University of Stellenbosch
16
Structure

• Context
• Freight system challenges
• What the NFLS says
• What Moving South Africa says
• Transnets view
• The freight demand model
• Demand forecasts
• The container value chain
• How is Transnet responding to the challenges?
• Turnaround Strategy
• How has Transnet performed to date?
• Progress on the turnaround strategy
• Financial performance
• Where will we focus going forward?
• Integrated objectives
• Infrastructure
• Long term
• 5 Year Plan

17
Our structural problem with corridors will grow.
Gauteng-Beitbridge (incl. Polokwane)
Million tons 2006, 2011, 2016, 2021, 2026 Likely
and high scenario
Gauteng-Nelspruit (incl. Witbank)
Gauteng-Lobatse
Gauteng-Richards Bay
Gauteng-Cape Town
Gauteng-Durban
Coastal
Gauteng-East London
Gauteng-PE
Growth in the two major corridors can only be
addressed with a sustainable intermodal solution
18
The continued absence of an intermodal solution
has led to a sudden increase in South Africas
truck fleet in an attempt to address freight
owners door-to-door needs
It is important to note that this increase has
taken place after the release of the NFLS the
NFLS therefore did not take this into account
Failure to address the corridor challenge will
result in corridor gridlock Intermodal solutions
provide the most efficient solution
Source NAAMSA data
19
Primary flows are completely rail orientated for
obvious reasons
Million tons 2006, 2011, 2016, 2021, 2026 Likely
and high scenario
Magnetite
Domestic iron ore
Export iron ore
Export coal
Domestic manganese
Export manganese
Capacity expansion should follow well developed
systemic patterns
Source Centre for Supply Chain Management,
University of Stellenbosch
20
Rural traffic in South Africa will pose growth
challenges for the second economy
Limpopo
Million tons 2006, 2011, 2016, 2021, 2026 Likely
and high scenario
Mpumalanga
North West
Kwazulu Natal
Northern Cape
Free State
Eastern Cape
Western Cape
This is primarily a road demand but rail
solutions are possible where infrastructure is
already installed Knowledge about rural traffic
will facilitate branch line strategies.
21
In the likely scenario, total tonnage shipped
will more than double in the next 20 years
Total tonnage demand and shipped Likely scenario
Coordinated action is required by all
stakeholders to optimise the investment required
to meet this demand
Source Centre for Supply Chain Management,
University of Stellenbosch
22
.... and almost triple in the high scenario
Total tonnage demand and shipped High scenario
Source Centre for Supply Chain Management,
University of Stellenbosch
23
The economy will grow the fastest, by weight, in
basic energy related commodities, basic
earthworks, building related and food commodities
Supply/Demand data Growth in tons 2006 to
2026
Source Centre for Supply Chain Management,
University of Stellenbosch
24
But when depicted as a growth more beneficiated
growth is expected
Supply/Demand data Growth in tons 2006 to
2026
Source Centre for Supply Chain Management,
University of Stellenbosch
25
Salient points

• South Africa is a transport intensive economy
• Freight demand will more than double in the next
  20 years
• The sudden increase in the truck fleet will lead
  to increasing congestion throughout the freight
  system
• Future freight demand can best be met through the
  development of intermodal corridor solutions

26
Structure

• Context
• Freight system challenges
• What the NFLS says
• What Moving South Africa says
• Transnets view
• The freight demand model
• Demand forecasts
• The container value chain
• How is Transnet responding to the challenges?
• Turnaround Strategy
• How has Transnet performed to date?
• Progress on the turnaround strategy
• Financial performance
• Where will we focus going forward?
• Integrated objectives
• Infrastructure
• Long term
• 5 Year Plan

27
The container freight system

• The container is the core of a highly automated
  system for transporting freight internationally
• Almost all beneficiated goods are transported in
  containers
• Maximising opportunities arising from the
  globalisation of production and supporting an
  export led growth strategy requires a world class
  container freight system

Maritime connectivity and ocean freight rates are
the main drivers behind the competitiveness of
South Africas container supply chains
28
Distribution of costs across value chain
Ocean freight is the biggest determinant of our
container supply chain competitiveness
29
Comparison of supply chain costs
At around 3,5 Million TEU, South Africa accounts
for only 0.75 of the world container market and
our market is dominated by two lines
Source Port of Singapore Authority, 2006
30
Structure

• Context
• Freight system challenges
• What the NFLS says
• What Moving South Africa says
• Transnets view
• The freight demand model
• Demand forecasts
• The container value chain
• How is Transnet responding to the challenges?
• Turnaround Strategy
• How has Transnet performed to date?
• Progress on the turnaround strategy
• Financial performance
• Where will we focus going forward?
• Integrated objectives
• Infrastructure
• Long term
• 5 Year Plan

31
Transnet vision and mission

• Transnet is a focused freight transport company
  delivering
• Integrated, efficient, safe, reliable and cost
  effective services which help promote economic
  growth in South Africa

INCREASED
Market share
IMPROVED
Productivity and profitability
PROVIDING
Capacity for customers ahead of demand
32
Transnet values
TRANSNETS CUSTOMERS PREFER US BECAUSE

• We are
• Reliable
• Trustworthy
• Responsive
• Safe service provider

OUR EMPLOYEES ARE

• Thinking
• Disciplined
• Results orientated

• Ethical
• Committed
• Safety conscious
• Accountable

33
Four-point turnaround plan
34
Structure to support strategy
TRANSNET COMPANY
Operational divisions(continued businesses)
Discontinued Businesses

Discontinued businesses

• SA Express
• Transtel Telecoms
• Viamax
• Autopax
• freightdynamics
• Housing Loan Book
• Shosholoza Meyl
• Arivia.kom

PORTS
PIPELINE
National Ports Authority
Transnet Port Terminals
Transnet Pipelines
Supporting businesses Property, Capital Projects
35
Structure

• Context
• Freight system challenges
• What the NFLS says
• What Moving South Africa says
• Transnets view
• The freight demand model
• Demand forecasts
• The container value chain
• How is Transnet responding to the challenges?
• Turnaround Strategy
• How has Transnet performed to date?
• Progress on the turnaround strategy
• Financial performance
• Where will we focus going forward?
• Integrated objectives
• Infrastructure
• Long term
• 5 Year Plan

36
Strategy implementation achievements to date

• Capital investment to address infrastructure
  challenges
• On target with 2007 (R11,7 bn) roll out of
  five-year investment plan
• Replacement of assets (R8,2 billion)
• Expansion investments (R3,5 billion)
• Major projects commenced and spending next five
  years per Corporate Plan
• New Multi Product Pipeline (NMPP) from Durban to
  Johannesburg (R9,3 billion)
• Widening and deepening of the entrance channel at
  the Port of Durban
• (R2,6 billion)
• Ngqura Container terminal (capacity from 2010
  onwards) (R6,1 billion)
• Coal line capacity expansion to 86 mtpa (R3,3
  billion)
• Ore line expansion to 47 mtpa (R3,8 billion)
• Acquisition of 404 new locomotives (R4,9 billion)
• Project management Establishment of Capital
  Projects
• Focus on Co-ordination, implementation, skills,
  planning and delivery

37
Strategy implementation achievements to date

• Disposal of non-core assets to refocus the
  business

38
Disposal of non-core assets Subsequent events
Strategy implementation achievements to date
39
Strategy implementation achievements to date
Human capital development
Additional capacity building 175 additional
engineering bursaries 173 students at
institutions of technology (to be increased to
300) 1 261 additional apprentices in different
trades 20 Thuthuka bursaries through SA Institute
of Chartered Accountants
40
Strategy implementation achievements to date

• Re-engineering the business Vulindlela projects
• Second year of implementation
• Improve productivity levels and operational
  efficiencies
• Orientate businesses towards customers
• Address safety
• Culture of planned maintenance
• Increase in market share volume growth
  (especially GFB in Transnet Freight Rail)
• Savings of more than R2 billion have been
  achieved since inception
• Success/achievements in 2007
• Improved GFB freight flows (3 mt)
• Capacity created on Iron Ore and Coal Line that
  exceeds current demand
• from clients
• Increase in monthly port handling capacity at DCT
  (TEUs 186 000 vs 158 000)
• Procurement savings of R500 million p.a. and
  reduction in safety incidents
• (R200 million)

41
Strategy implementation achievements to date

• Efficiency improvement Transnet Business
  Intelligence projects (TBI)
• Implementation of TBI projects
• Effective use of technology, world class systems
  and processes
• Financial management and reporting
• Improving processes and systems that enable
  information management
• Identified KPIs across businesses to measure
  key value drivers
• Benchmarking against international companies to
  ensure world
• class performance
• Implemented Key Performance Indicator project to
  measure
• Key volume drivers
• KPI performance weekly/monthly
• Performance vs benchmarks all areas of business

42
Strategy implementation achievements to date

• Transnet Second Defined Benefit Fund (TSDBF)
• Active management and leadership from Transnet
• Currently in surplus of R1,9 billion as opposed
  to being in deficit in 2006 of R1,6 billion
  (aided by the sale of MTN shares-M Cell and VA
  Waterfront)
• Rule amendments submitted to the Minister for
  approval
• Generally to enable bonus amounts to be paid to
  pensioners to exceed 2 pension increase (subject
  to affordability)
• Transnet to pay ex-gratia bonuses of R125 million
  to pensioners
• All to receive an additional 1
• Previously disadvantaged widows and members with
  gt15 years service who receive low pensions and/or
  also over 65 years old receive additional amounts

43
Strategy implementation achievements to date

• Transnet Pension Fund Act Amendment Bill
• Bill passed by Parliament enables non-Transnet
  employees of businesses transferred to other
  Government agencies to remain members awaiting
  Presidential approval
• Rule amendments approved by Minister of Public
  Enterprises with the concurrence of the Minister
  of Finance
• Fund will become multi-employer with new employer
  guaranteeingobligations of its employees
• Fund now in substantial surplus (R1,1 billion)

44
Strategy implementation achievements to date

• Economic Regulation
• National Ports Act
• Act in force from November 2006
• Places responsibility on Transnet National Ports
  Authority to ensure safe, efficient and effective
  functioning of ports system
• Independent Regulator oversees Transnet National
  Ports Authoritys functions, approves tariffs,
  hears complaints and appeals from port users
• Transnet is investing in systems and capabilities
  to perform additional functions prescribed by
  legislation
• Interacting with shareholder on certain aspects
  of Act
• Pipelines
• NERSA (energy regulator), declined Transnet
  Pipeliness application for 5,6 increase
• Methodology for pipeline tariffs not yet approved
  by NERSA
• Transnet engaging with relevant authorities
  important that tariff methodology enables
  Transnet to earn a fair return on invested
  capital (gt WACC)

Put in place a special committee to manage
Regulation
45
Strategy implementation achievements to date

• Risk Management
• Operational Risk
• Established a Risk Committee of the Board and
  appointed a Chief Risk Officer that serves on
  EXCO
• Appointed GE Human Resources and HR Sub-Committee
  dealing with human capital in sustaining the
  turnaround
• Improved safety measures and roll out safety
  awareness and training programmes
• Reviewed safety procedures and strengthened
  capacity in problematic areas
• Improved controls and campaign against fraud

46
Strategy implementation achievements to date

• Risk Management
• Financial Risk
• Financial Risk Framework in place covering all
  risks (interest, currency, market)
• Asset and Liability Committee ensures that
  financial risks are effectively managed
• Stringent financial objectives are set to ensure
  that targeted financial ratios are
  achieved/maintained
• Improved internal financial and system controls

47
Transnet performance highlights three-year
view
48
Structure

• Context
• Freight system challenges
• What the NFLS says
• What Moving South Africa says
• Transnets view
• The freight demand model
• Demand forecasts
• The container value chain
• How is Transnet responding to the challenges?
• Turnaround Strategy
• How has Transnet performed to date?
• Progress on the turnaround strategy
• Financial performance
• Where will we focus going forward?
• Integrated objectives
• Infrastructure
• Long term
• 5 Year Plan

49
Financial results 2007
Consolidated income statement
50
Financial results 2007
Five-year EBITDA Margin Growth
86 growth
41
40
29
22
17
51
Core operating division performance
Operating divisions

• 4 increase in revenue.
• Total volumes 176,6 mt (2006178 mt)
• - GFB 79,6 (2006 79,7)
• - Iron ore 30,0 (2006 29,6)
• - Coal 67,0 (2006 68,7)
• Volumes negatively impacted by
• - Customers production constraints,
• - Capacity constraints
• - Derailments
• 3 decrease in operating cost compared to
  prior year improvements from the
• re-engineering programme
• Capital expenditure R7,4 billion

Transnet Freight Rail contribution to Group
EBITDA 33
52
Core operating divisions performance
53
Core operating divisions performance
54
Core operating divisions performance
55
Core operating divisions performance
56
Financial results 2007Consolidated balance
sheet

2006 R million
2007 R million
for the year ended 31 March
ASSETS
50 144
57 843
Non-current assets
48 125
57 720
PPE and other
2 019
123
Long term loans and advances
28 202
19 411
CURRENT ASSETS
7 588
9 841
Inventory, receivable assets and cash
3 874
5 658
Derivative financial assets
16 740
3 912
Assets classified as held-for-sale
Return on average total assets ()
78 346
77 254
TOTAL ASSETS
57
Financial Results 2007
Abridged consolidated cash flow statement

• Cash generated from operations before working
  capital changes increased by 20 to R13,5 billion
• Net cash generated from operating activities
  increased by 51 to R8,9 billion

Cash generated from operations (R million)
Cash interest cover (times)
4,3
3,5
4,8
4,5
5,4
7 178
7 040
10 089
11 244
13 488
58
Structure

• Context
• Freight system challenges
• What the NFLS says
• What Moving South Africa says
• Transnets view
• The freight demand model
• Demand forecasts
• The container value chain
• How is Transnet responding to the challenges?
• Turnaround Strategy
• How has Transnet performed to date?
• Progress on the turnaround strategy
• Financial performance
• Where will we focus going forward?
• Integrated objectives
• Infrastructure
• Long term
• 5 Year Plan

59
Integrated and coordinated action between the
port, rail and pipeline systems is necessary to
meet the challenges by

• Implementing a high performance rail corridor
  backbone for the country that will start to
  recapture corridor market share from road and
  provide the capacity to meet the long term demand
  for freight in the economy.
• Operating the ports in a complementary manner to
  make the port system more efficient, increase
  maritime connectivity and reduce ocean freight
  rates
• Integrating physical, financial and information
  flows along the port-rail-pipeline supply chain
  to ease the administrative burden of trade and
  create greater visibility and responsiveness
  within industry supply chains.
• Formulating and implementing integrated service
  strategies for key customer segments to realise
  the synergies of the port, rail and pipeline
  systems.
• Enhancing the connectivity of the South African
  freight system with the regional freight system

60
Integration is well advanced in Transnet as can
be seen from the following examples

• Integrated port and rail masterplan
• Integrated freight infrastructure solution for
  the Port of Ngqura
• Integrated solution for Toyota
• Focus on corridor performance management

In all these cases, a fragmented approach would
yield a sub-optimal solution
61
Structure

• Context
• Freight system challenges
• What the NFLS says
• What Moving South Africa says
• Transnets view
• The freight demand model
• Demand forecasts
• The container value chain
• How is Transnet responding to the challenges?
• Turnaround Strategy
• How has Transnet performed to date?
• Progress on the turnaround strategy
• Financial performance
• Where will we focus going forward?
• Integrated objectives
• Infrastructure
• Long term
• 5 Year Plan

62
Ports and rail master plans

• Informed by the freight demand model and
  stakeholders
• Corridor approach adopted in the development of
  the plans
• Ensures integrated port and rail planning and
  investment
• Ports are clustered into three regional groupings
  ensuring that the associated coastal regions are
  assured of both bulk and general cargo facilities
• Infrastructure strategy premised on creating
  capacity ahead of demand

Corridor solutions are expensive and risky. This
risk can be managed through coordinated and
complementary action between the port, rail and
pipeline systems
63
Future core rail infrastructure
64
An integrated approach to container capacity

• Transnets capacity strategy for containers is
  premised on a complementary system of ports
• This creates flexibility within the system and
  optimizes investment
• Creating capacity ahead of demand is critical to
  ensure the reliability of the system

65
Container capacity plan Western Ports
For 12 growth scenario further capacity to be
provided by additional 2 berths in Cape Town or
container expansions in Saldanha (2019)
Container terminal expansion (2011)
12
Shortfall in stacking capacity due to expansion
project (EIA) approval delays, to be supplemented
by inland stacking capacity
10
TEU VOLUMES CAPACITY
8
EXISTING CT CONTAINER TERMINAL CAPACITY
YEARS
66
Container capacity plan Eastern Ports
67
Container capacity plan Central Ports
For 12 growth additional capacity required at
2016
Surplus capacity to handle overflow volumes from
Durban from 2010 - 2013
12
New Ngqura 4 berth container terminal 2008
10
8
TEU VOLUMES CAPACITY
EXISTING PE TERMINAL CAPACITY
YEARS
68
Structure

• Context
• Freight system challenges
• What the NFLS says
• What Moving South Africa says
• Transnets view
• The freight demand model
• Demand forecasts
• The container value chain
• How is Transnet responding to the challenges?
• Turnaround Strategy
• How has Transnet performed to date?
• Progress on the turnaround strategy
• Financial performance
• Where will we focus going forward?
• Integrated objectives
• Infrastructure
• Long term
• 5 Year Plan

69
Capex spending five-year plan R78 billion
13

• RAIL
• Transnet Freight RailR34,8 bn
• Coal Line R4,9 bn
• Ore Line R3,8 bn
• General Freight R15,3 bn
• Maintenance Capitalisation R10,8 bn

• PIPELINE
• Transnet Pipelines R10 bn
• Multi-product pipeline R9,3 bn
• Gas line upgrading R0,2 bn

13

• PORTS
• Transnet 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

12
45
24

• PORTS
• Transnet
• National Ports Authority 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

5

• RAIL
• Transnet Rail Engineering R4,1 bn
• Equipment - R2 bn
• Upgrade of facilities R1,1 bn

Continuing businesses
70
Capex five-year plan R78 billion
12,8
Annual spending over five years
Cumulative
R78 bn
R21.5 bn
R17.5 bn
R16.9 bn
R12.7 bn
R9.4 bn
Continuing businesses
71
5 Year Infrastructure Investment Plan
5 Year Infrastructure Investment Plan
72
Funding requirements Next 5 years

• ECA umbrella facility
• DMTN program R30 billion facility rated by
  Moodys
• Raise cost effective borrowings at the
  appropriate tenors

73
Funding requirements Next 5 years
2010/11 R million

2008/09 R million
2009/10 R million
20011/12 R million
2007/08 R million
18 681
15 363
Cash flows from operating activities
12 579
15 529
7 653
(17 480)
(21 481)
(16 935)
Gross capital expenditure
(9 404)
(12 714)
Proceeds from disposals and other investments
66
140
301
2 516
64
(2 287)
(5 054)
(197)
(2 327)
Loan redemptions
(220)
388
Funding requirements
(4 981)
(7 938)
(11 820)
9 144

Including sale of C Preference shares
Redemption of T004 bond
74
Challenges next 3 years

• Grow the business
• Volumes/activities
• Efficiencies and reliability improvements
• Customer satisfaction
• Providing safe services
• Roll out of investment plan
• Replace assets and capacity creation
• Roll out of Transnet Business Intelligence
  project (TBI)
• Risk Management and Corporate Governance
• Safety of people and freight
• Complying with environmental requirements
• Strengthening internal controls

• WE ARE DEDICATED TO FULFILLING OUR VISION AND
  MISSION
• To deliver on our commitment to our customers and
  co-operation with all stakeholders
• To play a leading role in the transport and
  logistic sector to support economic growth in
  South Africa and fulfil the role required by the
  Shareholder

75
Thank you