Tau Morwe Chief Executive, Transnet National Ports Authority B2B Session Durban 6th July 2012
Presentation Outline
• Market Demand Strategy Overview • 7-year Investment Programme • Durban Projects • Operations Approach • Licences Update
Transnet’s Market Demand Strategy (MDS)
§ R300bn capital investment programme; § Expanding rail, port and pipeline infrastructure;
§ Increase in capacity to meet market demand;
§ Continued financial stability and strength;
§ Significant productivity and operational efficiency improvements;
§ Shift from road to rail – reducing the cost of doing business and carbon emissions;
§ Enabling economic growth; § Job creation, skills development, localisation, empowerment and transformation opportunities;
MDS will have a massive impact on the growth of TNPA Complexity in transitioning from stabilising businessas-usual to realising growth Present Stabilize operations
• Creating oversight capacity to Past Exploit existing assets
• Under-investment and lack of infrastructure and fleet maintenance;
• Inadequate return on aged assets;
• Limited economic regulation;
• Lack of oversight and monitoring of Terminal Operations;
• Lack of critical skills
monitor port efficiency and stabilise port operations;
• Creating human resource capacity for critical roles;
• Organisational redesign to deliver on Authority role and responsibilities;
Future Facilitate growth
• Sustained investment to create port infrastructure capacity ahead of demand to stimulate growth;
• Business development to grow port volumes and create new cargohandling facilities (regional, global focus);
• Terminal oversight that drives efficient and safe port operations;
• Sustainable Authority within an environment of economic regulation;
• Human Resource critical skill capacity created;
• Mitigating port infrastructure capacity constraints through sustained investment;
• Create structures for economic regulation;
• Create Business Development framework/resources to grow revenue and volumes;
and competency gaps;
3
TNPA will make significant changes to realise its growth aspirations MDS Impact on TNPA
Capital planning and execution
Operational effectiveness and productivity
• Increase capacity • Take a systems and capability to deliver on TNPA’s R 46.9Bn capex plan; • Implement EPMO to track capital projects and project schedule deviations; • Debottleneck procurement to reduce cycle times;
view of a port; • Develop and Implement Operations Management Strategy; • Establish operational efficiency targets for all Terminals; • Establish oversight teams to monitor performance;
Target volumes and customer satisfaction
Regulator and key stakeholder engagement
• Finalise Tariff Methodology and integrated port Pricing Strategy capacity planning with Ports with Customers; Regulator; • Develop New • Implement Business Agreements and Development Licences for all Strategy port services and (Regional and facilities; Africa); • Implement CRM • Create oversight capacity to drive to improve port compliance; Customer collaboration; • Improve
Financial sustainability
Safety
• Implement
• Embed safety
Financial turnaround strategy; • Complement Group initiatives for financial sustainability;
and health oversight across ports; • Implement visible felt leadership to create a safety culture across ports;
Organisation strategy / readiness
• Ensure availability of required skills sets to develop internal capability and capacity in order to address competency gaps; • Retention of skilled workforce to deliver on prioritized areas and continue to strengthen the development initiatives for core, critical and scarce skills as anchors and growth-enablers;
HR strategy
• Develop an integrated and responsive Human Resources strategy aligned to the MDS requirements thereby ensuring a valuedriven and business partnering HR function;
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Volume
Volume (Mt)
Capex
The Road Ahead = Continued Growth and Investment in the Port System …............
Capital investment (Rbn)
Budget 12/13
269
293
315
1.75
2.4
5.3
Containers
12
↑ 8%
13
15/16
16/17
17/18
18/19
327
340
358
390
407
5.4
6.4
↑ 6% 10.2
8.1
9.0
Dry Bulk
‘000 TEU
4,344 4,821
Projections 13/14 14/15
LE 11/12
5,250 5,576 6,087
14
15
16
Mtpa
7,646 6,530 7,094
17
18
19
Liquid Bulk
↑ 6% 172
180
182
191
221
161
212
144
12
13
14
15
16
17
18
19
Break Bulk
mkl
↑ 3%
39.8
41.3
47.7
12
13
14
46.1
15
47.0
16
48.1
17
49.2
18
Mtpa
↑ 5%
50.0
19
11.6
12.2
13.0
13.6
14.3
14.6
15.2
10.5
13
14
15
16
17
18
19
19
Automotive estimated to grow at 3% compounded annual growth rate over the next 7 years 5
46.9
.... Volume growth requires port investment in expansion of Facilities rather than replacement ‌ 1,750
2,376
5,326
5,434
10,167
8,134
6,392
7.9
6.3
Expansion vs. replacement (Rbn) 1.0
0.7
0.8 1.5
2.8 2.5
3.3
4.2 2.2
2.1
xx
9,038 7.7
2.3
1.9
Total
1.3
expansion replacement
12
13
14
16
15
17
18
19
10,167 9,038
Province (Rbn)
Durban R Bay Western Cape
8,134
1,583 4,686
Eastern Cape Other (LNS, DRS and HQ)
6,392
2,295 5,326
5,434
5,455 1,022
3,518 2,471
2,592
2,100 1,750
1,750
80 567 612 406 85
11/12
2,376
619
525
500
689 133
740
569
614
992
1,325
1,509
503
423
251
13/14
14/15
15/16
859
258
436
12/13 Bgt
6
568 577
2,657
3,018
26
51
44
16/17
17/18
18/19
1,508
6
Durban Container Demand vs Capacity
Berth Deepening
DCT Crane Setback Project
Salisbury Island
DIA Dig Out Port
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Operations Key Focus Areas : Leading activities Providing effective and efficient, safe and affordable port services in support of TNPA's strategic objectives 7. Enhancement of People Capabilities − Management visibility − On-the-job skills development − Culture of performance − Linking performance to reward programmes and career path development 6. Safety – Inculcate a safety culture – Improve safety performance
5. Asset utilisation – Optimal utilisation of Tugs – Optimal utilisation of pilot boats
1. TNPA National Operations Centre − Establishment operations centres • National level • Port level 2. Oversight Management of port terminals − Oversight of terminal operations 3. Volume Growth Grow volumes on key commodities e.g : − Containers − Manganese − Automotive 4. Capacity Utilisation – Optimal utilisation of berths – Improve the Ship Turnaround Time
Licences Update • Process commenced December 2011 – Invitations sent out per Gazette notice; • Terminal Operators had until 31st May 2012 to submit applications; • Invites were sent to 78 Operators, TNPA received 91 applications; • Applications received were checked for completeness, TNPA engaged Operators to obtain relevant information before 31st May 2012; • Final complete applications were received during last week of May 2012, TNPA currently processing applications; • Finalisation of licences expected by 17th July 2012; • Ngqura Container Terminal – Section 79 process as per Ministerial Directive; 13
MDS is key to South Africa’s growth strategy
The potential for South § Contribute to NGP aspirations: expected to create up to 588,000 job opportunities across the economy Africa is massive… § Reduce the cost of doing business (0,5% of GDP) § Drive regional integration § Localisation programme supports local products and skills development
It is financially sound
§ Majority of the growth will be funded internally from operations § Gearing and cash interest cover will maintain investment grade credit rating
We can execute…
§ Execution risks will be mitigated through robust implementation plans § In partnership with its stakeholders, Transnet can successfully realise the growth that MDS will bring to the country
It will improve Transnet's position…
§ …as a top-tier logistics provider and SA’s employer of choice § Infrastructure development plans will create world class freight infrastructure
The End