Transnet Strategy

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Transnet Strategy Investment Plan

• Board of the
• South African Cities Network

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Strategic direction
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Delivering on our commitments

• 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 Mbeki State of the Nation Address 21
May 2004
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There are significant shifts in the SA economy
that warrant a closer examination of the supply
chains necessary to support the economy.
Beitbridge
SA needs to reduce logistics costs by one third
to sustain our competitiveness.
Maputo
Gauteng
Richards Bay
Sishen
Durban
Saldanha
East London
Cape Town
Port Elizabeth
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An Integrated Transport Strategy
Transnet provides efficient, integrated transport
services to the bulk and manufacturing sectors.

• Ensure that Transnet provides an efficient
  transport platform that facilitates trade growth
  in SA
• Transnet is the custodian of Port, Rail and
  Pipeline Infrastructure Transnet serves specific
  industries to leverage its strength in assets
• Transnet collaborates with Customers to jointly
  design services and invest in areas that improves
  the performance of all parties

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Transnet Business Portfolio
Transport Portfolio
Independent Regulators
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Programmes and projects
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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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5 YEAR INVESTMENT 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
• Payback period of 8yrs 24 IRR

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 Berths
• Widening of the entrance Channel

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
1
2
3
4
5
Sustain
Expand
Develop
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NPA Strategic Projects (2)
1
2
3
Sustain
Expand
Develop
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SAPO Strategic Projects
1
2
3
4
5
Sustain
Expand
Develop
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Implications to Major Cities from a freight
perspective

• Container Automotive traffic is growing
• 7 in container traffic
• 12 in Automotive sector
• Road access to and from ports will be inadequate
  to support these increases
• Given the developments around Cape Town, Port
  Elizabeth, Coega, Richards Bay, Durban and Dube
  Trade port, there must be an integrated plan
• Infrastructure and system requirements
• Appropriate planning and alignment to support key
  sectors of the provinces economy
• Appropriate skills and training programs
• Philosophy of creating capacity before demand
  arises which will drive economic development in
  the provinces cities
• Infrastructure in ports and surrounding the ports
  precinct
• Appropriate people skills developments

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SAPO SECTOR GROWTH