Click to edit Master title style Ports Regulator Roadshows Tariff Application FY 2016/17 01 – 06 October 2015
Contents Transnet’s Market Demand Strategy The Authority’s Strategic Focus – Aligned to Transnet MDS Functions of the Authority Services within the Ports Regulation of Port Services and Facilities Port Investment Planning Operation Phakisa Tariff Application Approach Tariff Application FY 2016/17 Pricing Strategy Port Efficiency Current Initiatives Conclusion 2
Transnet’s Market Demand Strategy (MDS) Transnet’s Market Demand Strategy (MDS) 3
Transnet’s MDS • The MDS is Transnet’s investment programme aimed at expanding and modernising the country’s rail, port, and pipeline infrastructure over a period of seven years to promote economic growth in South Africa. • The main pillar of the MDS is a rolling seven year R336.6bn investment programme. The MDS will make Transnet: • One of the top global freight railway companies; • One of the largest employers in South Africa; • One of the top companies in South Africa in terms of revenues. 4
Transnet MDS: 5 Strategic Focus Areas FINANCIAL SUSTAINABILITY Increase asset utilisation and maintain a financially sustainable business 5 DEVELOPMENTAL OUTCOMES Our social and environmental CAPACITY CREATION stewardship will develop our talent, create new jobs, Increase both capability improve health and safety, and capacity to deliver benefit communities, reduce the capital investment energy consumption, and plan promote the adoption of climate change mitigation __________________________ policies ST STRATEGIC FOCUS AREAS __________________________ MARKET SEGMENT OPERATIONAL COMPETITIVENESS EXCELLENCE Reduce the cost of logistics Maintain readiness to and promote an integrated provide world-class rail, and aligned regional port and pipeline network that allows for operations supply chain optimisation 5
Transnet’s MDS: Benefits • The MDS will have a marked impact on the cost of doing business in South Africa, in line with Government’s New Growth Plan and New Development Plan: COMPANY JOBS GROWTH MDS will create & sustain direct and Increase in indirect jobs over headcount by the next seven 14.1% over the years seven years SKILLS SUSTAINABLE VALUE DEVELOPMENT The MDS will Prioritization of deliver lasting skills development economic, social & to promote a high environmental performance value to South culture Africa 6 organisation
The Authority’s Strategic Focus – Aligned to Transnet MDS The Authority’s Strategic Focus – Aligned to Transnet MDS 7
The Authority’s Strategic Focus – Aligned to Transnet MDS Strategic Intent “To enable the effective, efficient & economic functioning of an integrated port system to promote economic growth” Capital Delivery + Service Levels +Integration = Authority’s Authority’s Increased Improve Port 3-tier strategy Strategic Objectives Volumes, efficiencies Revenue and 6. Organizational capacity / readiness contain Costs Enhance the Create & manage 1. Effective port ports’ position Infrastructure system as integrated capacity ahead of 2. Economic port Efficient port gateways for demand system system trade Create & Aligned to Integrated manage Economic port Transnet MDS port system 3 . Efficient port Infrastructure system Improve Port strategy system capacity ahead efficiencies (oversight Grow the 2. Economic port of demand role) market system Effective port system Enhance the ports’ 4. Integrated port position as integrated system. Economic port gateways for trade 5. Grow the market system 8 Strategy embodies the landlord functions set out in the Ports Act
The Authority’s MDS Plan • The Authority will: 9
The Authority’s MDS Plan: Successes to Date JOB CREATION • Employment of 558 employees since the inception of MDS to June 2015 CAPACITY • Expansion of the Cape Town Container to 1.4 million TEUs • Expansion of the Ngqura Container Terminal - 1.5 million TEUs capacity FLEET • Acquisition of Grab Hopper Dredger • Award of contracts to local supplier for the delivery of 9 tugs with the first tug to be delivered in 2015/16 • Award of contract for 5 500m3 Trailer Suction Hopper Dredger (TSHD) with planned delivery in 2015/16 OPERATIONAL EFFICIENCIES • Introduction of Terminal Operator Performance Standards (TOPS) and Marine Operator Performance Standards (MOPS) and monitoring thereof • Port Operations Centres completed at 5 ports to provide a holistic view of port operations BBBEE • Measures implemented to ensure 75% of Level 4 B-BBEE status in lease contracts 10
The Authority’s MDS Plan: Successes to Date (continued) LOCAL SUPPLIER DEVELOPMENT • Transnet Supplier Development Initiative: Assisting the growth of small firms • Development of local supplier skills to build dredger components in South Africa • Local suppliers will build components for the operating life of the dredgers • Additional benefit / spin-off : Local suppliers building components for other countries TRAINING & DEVELOPMENT • Port Engineers, Planners and Project Management skills focus • Port Operations Centres skills evolving into Joint Operations Centres • Aviation skills development o 23 Helicopter Pilot Trainees o 16 Helicopter maintenance engineers INTEGRATED PORT MANAGEMENT SYSTEM (IPMS) • IPMS Implemented at the Ports of Durban, Cape Town & Saldanha • Realisation of SA ports as Smart Ports CONTINUOUS IMPROVEMENT/KAIZEN PROJECTS • Establishment of a department focusing on continuous improvements and developing high-performance teams 11
The Authority’s MDS Plan: Administered Pricing • The graph below illustrates the Authority’s average tariff increase & differentiated container & automotive tariffs 140 122 Inflation 117 111 120 106 100 114 NPA average 109 tariff 100 103 103 91 Automotives exports 100 80 69 Containers exports R1 bn Discount Program Significant tariff decrease 60 40 20 Approved average 2.76% 0.00% 6.59% 4.80% tariff increase 0 0 2012 2013 2014 2015 Base 12
Functions of the Authority Functions of the Authority 13
Core Functions of Port Authority - Ports Act Section 11 Promote the use, improvement and development of ports, and control land Landlord use within the ports, having the power to lease port land under conditions it determines. Master planner Plan, improve, develop and maintain port infrastructure. Make and apply rules to control navigation within port limits and Controller of ports approaches, ensure protection of the environment and ensure safety and navigation security within port limits. Controller of ports Ensure that port services and facilities are provided, and may enter into agreements or licence other parties to provide these. services & facilities Marketer & Ensure that adequate, affordable, equitable and efficient port services and facilities are provided for port users. administrator Ensure non-discriminatory, fair, transparent access to port services and facilities; advancement of previously disadvantaged people; promotion of Change agent representivity and participation in terminal operations; enhanced transparency in port management. Coordinator with Advise on all matters relating to the port sector, and liaise with all other state agencies stakeholders. 14
Services within the Ports Services within the Ports 15
Services Provided within the Ports • Infrastructure/ Services provided within the Ports are illustrated below: • Ancillary Services includes security, bus services, baggage handlers, fire fighting, fire protection, power & water supply, labour provision, pollution control and clearing/forwarding. 16
Regulation of Port Services & Facilities Regulation of Port Services & Facilities 17
Regulation of Port Services and Facilities • The Authority exercises control in accordance with the provisions of the Act, by means of agreements, licences and permits. 18
Port Investment Planning Port Investment Planning 19
Port Investment Planning • The main function of the Authority is to own, manage, control and administer ports to ensure their efficient and economic functioning, and in doing so the Authority must ― National Ports Act: Section 11 20
Port Investment Planning (continued) • The Authority’s capital plan: R42.9bn (exclusive of land associated with DIA) 4 144 6 090 3 055 7 377 7 445 7 765 7 015 Expansion vs. 5 779 5 779 Replacement 5 119 4 845 3 167 2 922 2 417 2 533 2 133 1 987 1 896 1 666 1 727 922 15/16 16/17 17/18 18/19 19/20 20/21 21/22 Total Expansion: R 27.1bn Total Replacement: R15.8bn Total 7 Years: R42.9bn 21
Port Investment Planning (continued) • The Authority’s capex spending over the seven year period amounting to R 42.9bn: Beit Bridge Other R580m Maputo Richards Bay R3 516m Sishen Port Nolloth Durban R21 529m R60m Dredging R686m Saldanha Bay R4 643m East London R1 481m Cape Town Ngqura R2 346m Port Elizabeth R5 423m Lighthouses South Corridor R1 976m R449m Mossel Bay R8 880m R202m
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