Transnet National Ports Authority Tariff Application FY 2015/16 - PowerPoint PPT Presentation

Transnet National Ports Authority Tariff Application FY 2015/16 Ports Regulator Roadshows 1 15 – 22 September 2014

Contents  NPA Strategic Focus – Aligned to Transnet MDS  Functions of the Authority  Services within the Ports  Regulation of Port Services and Facilities  Port Investment Planning  Tariff Application Approach  Tariff Application FY 2015/16  Pricing Strategy  Operation Phakisa  Port Efficiency  Conclusion 2

NPA Strategic Focus – Aligned to Transnet MDS NPA Strategic Focus – Aligned to Transnet MDS 3

NPA 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 = Increased NPA 3-tier strategy NPA Strategic Objectives Improve Port Volumes, efficiencies Revenue and contain Costs Enhance the 6. Organizational capacity / readiness 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 4 Strategy embodies the landlord functions set out in the Ports Act

Transnet MDS Aligned with Government • Transnet R300bn capex programme is essential to SA’s economic growth and development strategy – Honourable President Jacob Zuma • As a SOC, Transnet is required to align its strategic orientation and technical capacity with the requirements of the developmental state 5

Functions of the Authority Functions of the Authority 6

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 services & facilities agreements or licence other parties to provide these. 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 other Advise on all matters relating to the port sector, and liaise with all state agencies stakeholders. 7

Services within the Ports Services within the Ports 8

Services Provided within the Ports Aids to navigation along the coast Other services to ships Other services to the cargo:  Ship Building and repairs  Warehousing/ cargo storage Vessel traffic system, safety of  Ship surveyors  Cargo repairs S environment, port control  Bunkers  Equipment rental  Ship chandlers  Cartage (road/rail) Provision of basic port infrastructure  Hull cleaning  Cargo inspection, storage and and Aids to navigation within Ports  Prop shining E Grouping  Pest control and fumigation  Fire fighting Dredging  Security C  Waste disposal Pilotage  Floating crane U  Radio/radar  Vessel searchers Tug Services  Ship agents R Berthing/unberting services I Stevedoring (cargo handling on board) Other services in the port: Cargo handling on quay T  Bus services  Baggage handlers Other cargo handling services The Authority’s Services  Fire fighting Y  Fire protection Transport to/from storage Other Service Providers  Security  Power and water supply Storage Cargo Flow  Labour provision  Pollution control Delivery/receiving via road/rail  Clearing/ forwarding EXPORT CARGO IMPORT CARGO Adapted from United Nations Conference on Trade & Development 9

Services Provided within the Ports (continued) Port Infrastructure Revenue Stream Port land and Lease port land to terminal operators and other port service Lease income (rentals) Terminals and port facility providers in the port(s). Wet infrastructure Lighthouse services infrastructure (lighthouses, buoys, Light dues, port dues, vessel beacons and electronic / radio navigation equipment) , port traffic services fees control and safety, entrance channels, breakwaters, turning basins, aids to navigation within port limits, vessel traffic services, maintenance dredging within ports. Dry infrastructure Quay walls, roads, rail lines, buildings, fencing, port security, Cargo dues, berth dues lighting (outside terminals), bulk services and in certain cases terminal infrastructure Ship repair Provide and maintain ship repair facilities as well as the cranes Preparation fee, docking and services utilised in such facilities. undocking fees (vessels at repair facilities), Berth dues (vessels at repair quays) Marine services Pilotage, tug assistance, berthing, running of lines, floating Pilotage dues, tug assistance cranes fees, berthing fees, running of line fees, floating crane hire fees 10

Regulation of Port Services and Facilities Regulation of Port Services and Facilities 11

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. 12

Port Investment Planning Port Investment Planning 13

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 ― Ports Act Section 11 14

Port Investment Planning (continued) • Capital spending at Ports: Pre & Post Port reform (in real terms) 15

Port Investment Planning (continued) • Transnet MDS : R312.2bn capex programme • The Authority’s capital plan: R42.7bn (exclusive of land associated with DIA) 2 730 3 584 4 638 9 094 8 114 6 996 7 580 6 984 Expansion vs. 6 651 Replacement 5 579 5 246 Expansion 2 689 Replacement 2 110 1 962 1 949 2 001 1 750 1 579 1 622 1 463 1 151 14/15 15/16 16/17 17/18 18/19 19/20 20/21 Province (Rbn) 1 481 396 2 100 1 010 Durban 328 R Bay 3 637 3 244 Western Cape 1 793 711 Eastern Cape 454 604 309 498 787 6 119 Other (LNS, DRS & HQ) 600 568 2 114 2 548 322 3 782 670 343 2 614 610 1 061 1 032 730 887 467 360 111 165 194 88 14/15 15/16 16/17 17/18 18/19 19/20 20/21 16

Port Investment Planning (continued) Projections MDS Strategy Strategic objective Target Fixed Tariff Year Indicative Tariff Years Ports 2014/15 2015/16 2016/17 2017/18 Strategy Details Rm Rm Rm Rm Visible presence Rail To maximise return on investments by obtaining additional volumes 969 918 2 389 6 787 Regional Re-engineering, Integration, Integration Pipelines To maximise return on investments by improving Productivity and Efficiency operating efficiencies 611 943 543 553 To preserve current revenue streams without obtaining additional volumes (ie. revenue Target Projections protection) 806 974 1 081 1 015 Asset Type 2014/15 2015/16 2016/17 2017/18 Rm Ensure Safety Optimisation 252 447 285 518 Buildings and structures 352 597 599 766 Aircraft - - - 70 Land 6 1 91 18 Safety, Risk and Effective Governance Optimise Business Enterprise Offerings 51 150 148 47 Machinery, equipment and furniture 242 602 1 608 4 314 Optimally Satisfy Social Investments (non Permanent way and works -2 15 83 169 economic value creating projects) - 6 90 86 Vehicles, Rolling stock & containers - 5 6 57 Environmental 10 75 32 19 Port Facilities 2 130 2 330 2 248 3 695 Pipelines networks (etc) 1 35 3 5 Human Capital Total (excl. borrowing cost) 2 730 3 584 4 638 9 094 Optimise Human Resources 31 72 71 70 Total (excl. borrowing cost) 2 730 3 584 4 638 9 094 17

Port Investment Planning (continued) • Major Capital Projects FY 2014/15 to FY 2020/21 Deepening of Pier 2 berths -16m CD Durban Container Pier 1 Phase 2 Infill Salisbury Island Terminal Port of Ngqura Operationalisation of the Port Increase SLD Iron Ore capacity from 60mtpa to 82mtpa 16mtpa Manganese Terminal at the Port of Ngqura Coal handling facility at EL Bulk Tank Farm Berth A100, roads, port entrance and services at Ngqura LNG Terminal and additional Bulk Liquid at RCB Reconstruct sheetpile quay walls at DBN Maydonwharf Break Bulk Extension of Mossgas quay including dredging works at SLD Fleet Replacement ito Tug Boats, Pilot Boats, launches and Dredgers (All Fleet Replacement Ports) 18

Tariff Application Approach Tariff Application Approach 19

Tariff Application Approach 20

Regulatory Framework 21

Regulatory Framework (continued) 22