Richards Bay B2B Engagement MDS Journey 15 September 2014 1 - - PowerPoint PPT Presentation

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Richards Bay B2B Engagement MDS Journey 15 September 2014

• MDS Strategy
• Executing the Ports Act
• Tariff Methodology and Pricing Strategy
• Procurement Spend and CSI Initiatives
• Transformation
• TNPA Memberships

Contents

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Transnet’s Market Demand Strategy (MDS) MDS was launched in 2012 :

Create/expanding port infrastructure to create capacity ahead of demand Grow volume through capacity created and new business opportunities Increase port efficiency Self-sustainable port system Economic growth and job creation

Description Status 1 Initiative name 2 3 4

Implement CRM blueprint

5 6 7 Implement s56 process projects (e.g.. NCT, Manganese) 8 9 10 11 12 13 14 15

Implement Asset Management Lifecycle strategy Compliance to asset maintenance procedures Capital portfolio management model Reduce procurement cycle times Review/implement NBD programme of projects Establish efficiency targets and oversight teams Finalise Tariff methodology and Pricing strategy Implement OHSAS 18001 at all ports SHE oversight audits (legal) – terminals/tenants Execute marine, engineering, port planning, real estate & supply chain training programmes Issue terminal operator licenses (deemed licences) Talent management and succession pipelines Optimal maintenance of port assets Timely delivery of capital projects within budget Resolve procurement delays impacting capital delivery Integrated approach to manage customer relations Business development initiatives to support volume growth Initiate s56 projects to create new terminals Talent management for strategic and critical positions Monitor port performance against efficiency targets Refine/improve pricing methodology & pricing strategy Roll out occupational health and safety standards Compliance check of SHE legal requirements Create a skilled workforce Optimal resourcing to execute capital programme Conversion of deemed licences Increase capacity & capability to deliver capital Timely replacement/refurbishment of asset Maintenance executed Resource constraints Training programmes in place and training commenced Structure finalised and resourcing commenced TOPS implemented, Marine, Road and Rail to follow Tariff Methodology agreed, Pricing strategy in consultation Resource constraints Implementation commenced Projects identified and implementation commenced Projects identified and implementation commenced Implemented across all ports Audits have been completed Implemented and rolled out to all management levels All deemed licences issued

MDS – TNPA’s Priority MDS Initiatives

Implemented

5 2000 4000 6000 8000 10000 12000 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 TNPA Capital Investment Programme : 2013/14 - 2018/19

Total Investment of R 53Bn : 2015/16 - 2021/22

Total Capital Sustaining Capital Expansion Capital

Capital Programme 2015/16 – 2021/21

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Capital Programme 2015/16 – 2021/21

• 2 000

4 000 6 000 8 000 10 000 12 000 14 000 16 000 Richards Bay Durban East London Ngqura Port Elizabeth Mossel Bay Cape Town Saldanha Bay Head Office 3 743 15 325 2 297 14 706 1 532 171 1 579 8 382 5 272 Rm

TNPA Capital Investment per Port : 2015/16 - 2021/22

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Some of the key capacity creation projects

Port Project Estimated Capacity

• 1. Durban Container

Terminal Berth Deepening

• 0.3m TEU’s 2019;
• 2. Durban Salisbury

Island Infill

• 1.8m TEU’s 2024;
• 3. Port of Ngqura

Manganese Terminal

• 16mpta capacity 2019;
• 4. Port of Saldanha

Iron Ore Expansion

• 15mpta 2019;
• 5. Port of Saldanha

LPG Import Terminal

• 5 500t capacity 2016;
• 6. Port of Saldanha Oil

and Gas supply base

• Oil & Gas supply base, Berth 205 for rig repair, Extension at Mossgass

Quay for oil and gas fabrication;

• 7. Marine Fleet
• Grab Hopper Dredger delivered in August 2014 (capacity of 750 cubic

meters);

• 9 Tug Boats : First Tug delivery Feb ’16, then one every 3 months;
• New TSHD will be delivered in 2016 (capacity of 5500 cubic meters);

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The Next 10 Years : New Port Terminals (Section 56)

• Passenger Terminals : Durban, Cape Town;
• Liquid Bulk : Richards Bay, East London, Durban (Lot 100);
• LNG : Richards Bay;
• Coal : Richards Bay;
• Manganese : Ngqura;
• General Cargo : Ngqura;
• Containers : DDOP, Salisbury Island;
• Oil & Gas : Saldanha Supply Base, Rig Repair Facility;

• MDS Strategy
• Executing the Ports Act
• Tariff Methodology and Pricing Strategy
• Procurement Spend and CSI Initiatives
• Transformation
• TNPA Memberships

Contents

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Core functions (National Ports Act Section 11)

Optimally serve the economy Master planner Landlord Marketer & administrator Regulator and Controller Coordinator with other state agencies Change agent

Promote the use, improvement and development of ports, and control land use within the ports, having the power to lease port land under conditions it determines Plan, improve, develop and maintain port infrastructure Make and apply rules to control navigation within port limits and approaches, loading, unloading and storage of cargo, development of ports and off-shore cargo handling facilities, ensure protection of the environment within port limits, enhancement of safety and security within port limits Ensure that adequate, affordable, equitable and efficient port services and facilities are provided for port users Ensure non-discriminatory, fair, transparent access to port services and facilities; advancement of previously disadvantaged people; promotion of representivity and participation in terminal operations; enhanced transparency in port management Advise on all matters relating to the port sector, and liaise with all stakeholders

Controller of ports services & facilities

Ensure that port services and facilities are provided, and may enter into agreements or licence other parties to provide these

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Ports Act : Key Achievements

Optimally serve the economy Master planner Landlord Marketer & administrator Controller of ports navigation Coordinator with other state agencies Change agent

Lease Manual approved; Guidelines for Agreements, Permits and Licences approved; Annual Port Development Framework Plans for all ports; Infrastructure and Fleet Maintenance Programmes in place; Project Management Protocol developed for capital projects; PMO and EPMO in place to monitor and execute capital projects; Issued Port Rules and Regulations, Harbour Master Instructions; ISPS certified ports; OHSAS and ISO compliant ports; Agreed Tariff Methodology with Ports Regulator; Performance norms set and included in Terminal Agreements; Marketing Strategy developed; Open tender processes for vacant and and new Terminals (s56); Lease transformation policy approved; Established PCC and NPCC; Established Port-City, Port-Community and Port-Government Agency platforms; Established TNPA-DPE/DOT Bilateral; Memberships – PMAESA/IAPH;

Controller of ports services & facilities

Deemed licences issued; Port Services licenced; Port Service and Terminal Operator oversight audits being conducted;

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• MDS Strategy
• Executing the Ports Act
• Tariff Methodology and Pricing Strategy
• Procurement Spend and CSI Initiatives
• Transformation
• TNPA Memberships

Contents

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Regulatory Framework and Tariff Methodology (1)

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• The regulatory framework does not set a Tariff Methodology;
• An approved Tariff Methodology assists in the application of the

regulatory framework to determine the Authority’s overall revenue requirement;

• In September 2012, the Authority submitted its proposed Tariff

Methodology for approval by the Ports Regulator;

• The proposed methodology addressed the financial sustainability of

the Authority and Transnet with due cognisance of the critical years

• f Transnet’s MDS;
• Furthermore, the Authority proposed a multi-year tariff approach

from FY’s 2014/15 to 2018/19 as it executes the MDS;

Regulatory Framework and Tariff Methodology (2)

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• The multi-year approach was considered optimal as it would provide

certainty to all stakeholders :

• reduced regulatory effort by all affected parties;
• providing certainty to funders of the Authority; and
• allowing customers to plan their business accordingly during

the control period.

• The aforementioned methodology was consulted with stakeholders

in March 2013;

• The Regulator, whilst considering the Authority’s proposal issued an

interim Regulatory Manual, applicable to the 2014/15 tariff year;

• The tariff application for FY 2014/15 was prepared on the basis of the

guidelines contained in the Interim Regulatory Manual;

Final Tariff Methodology (1)

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• On 31 July 2014, the Regulator approved a final Tariff Methodology

for the governance of TNPA’s tariff setting process and matters relating to compliance;

• The Tariff Methodology considers a multi-year approach, fixed for a

three year period (FY 2015/16 to FY 2017/18);

• The methodology further allows for an annual review and an annual

adjustment of tariffs within the three year period as opposed to fixing the prices for the period.;

• This means that the Tariff Application to be submitted to the

Regulator will be a fixed Tariff Application for FY 2015/16 and indicative tariff adjustments for FY 2016/17 and FY 2017/18;

Final Tariff Methodology (2)

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• As per the tariff methodology, the approach used to determine the required

revenues in the tariff application will be based on the Revenue Required methodology.

• The formula for the Revenue Required methodology is as follows:

Revenue Requirement = Regulatory Asset Base (RAB) x Weighted Average Cost of Capital (WACC) + Operating Costs + Depreciation + Taxation Expense ± Claw-back ± Excessive Tariff Increase Margin Credit (ETIMC)

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• During 2014 discussions have been held with Regulator ito further refinement
• f the Pricing Strategy;
• The refinements are premised on cost reflectivity and the user pay principle;
• The main areas of discussion include:
• Asset Allocation;
• Inter/Intra tariff subsidisation; and
• Increasing the contribution of Real Estate income.
• As per the Tariff Methodology (July 2014):
• For FY 2015/16 TNPA may propose changes to the existing tariff book

that may reflect differentiated prices; and

• Future tariffs from FY 2016/17 onwards may be adjusted in accordance

with the outcome of the consulted and adopted pricing strategy.

Pricing Strategy Update

R1bn Export Discount Programme (1)

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• During FY 2012/13 the Regulator allowed a tariff discount of R1Bn to
• Address tariff imbalances; and
• Port inefficiencies with specific focus on local manufacturing;
• The industries targeted were exporters of vehicles and containers as

follows:

• New vehicle manufactured in SA : R 200 per unit;
• 6m/20’ full container : R 740 each; and
• 12m/40’ / 13.7m/45’ full container : R 1 820 each.
• The export cargo dues discounts was automated through TNPA’s

invoicing system;

• At end of FY 2012/13 R 121.3 million remained unallocated;

R1bn Export Discount Programme (2)

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• The Regulator has decided that this excess (R 121.3m indexed to R

136.71m) be distributed as follows:

• New vehicle manufactured in SA : R 31.12 per unit (Total rebate

R 231.12);

• 6m/20’ full container : R 115.14 each (Total Rebate R 855.14);
• 12m/40’ / 13.7m/45’ full container : R 283.17 each (Total

Rebate R 2 103.17);

• To date the unallocated discount has been distributed in full except for

R 1.4m;

• MDS Strategy
• Executing the Ports Act
• Tariff Methodology and Pricing Strategy
• Procurement Spend and CSI Initiatives
• Transformation
• TNPA Memberships

Contents

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Procurement Spend (TBA)

Preferential Procurement Indicators : 2013/2014

BBBEE

During 2013/14 TNPA’s Measurable Procurement Spend was R1 966 830 673 with a BBBEE contribution of R1 258 474 664.45 as a result of procurement from BBBEE Suppliers

Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Total Actual BBBEE % 86.53 74.82 60.43 71.38 66.97 55.99 66.47 47.71 65.95 68.21 40.57 63.22 64.02 Target % 70 70 70 70 70 70 70 70 70 70 70 70 70

0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 100.00 Actual BBBEE % Target %

Apr May Jun Jul Aug Actual BBBEE % 130 88 107 97 95 Target % 90 90 90 90 90

20 40 60 80 100 120 140

Actual BBBEE % Target %

Preferential Procurement Indicators : 2014/2015

BBBEE

Preferential Procurement Indicators 2014/15

> 50% Black Owned QSE > 30% Black Women Owned EME

TMPS R496 643 470.53 and R144 753 441.49 spent with > 50% BO Businesses. TMPS R496 643 470.53 and R60 857 317.98 spent with QSE Businesses. TMPS R496 643 470.53 and R85 401 404.27 spent with >30% BWO Businesses. TMPS R496 643 470.53 and R65 639 638.98 spent with EME Businesses. Apr May Jun Jul Aug Actual QSE % 12.99 8.22 7.27 11.46 16.74 Target % 20 20 20 20 20 0.00 5.00 10.00 15.00 20.00 25.00 Actual QSE % Target % Apr May Jun Jul Aug Actual BWO % 3.56 20.86 38.88 16.41 18.94 Target % 15 15 15 15 15 0.00 10.00 20.00 30.00 40.00 50.00 Actual BWO % Target % Apr May Jun Jul Aug Actual BO % 9.77 33.13 50.82 34.74 30.70 Target % 20 20 20 20 20 0.00 10.00 20.00 30.00 40.00 50.00 60.00 Actual BO % Target % Apr Ma y Jun Jul Aug Actual EME's % 13.8811.30 6.09 13.4717.03 Target % 15 15 15 15 15 0.00 5.00 10.00 15.00 20.00 Actual EME's % Target %

Corporate Social Investment (1)

REGION PROJECTS

Gauteng and National Projects Dr Vilakazi and Forest High Schools are the adopted high schools in the Gauteng region Refurbished Maths Classroom in Dr Vilakazi HS and renovated the science laboratory at Forest Hill High; An ongoing Saturday classes on pure Mathematics, Physical Science and English for grades 10, 11 and 12; National Sea Rescue Institute (NSRI) Partnered with National Sea Rescue Institute (NSRI) for the Water wise campaign which has empowered over 100 000 young people nationally; Techno girl job shadowing and Take a girl child to work campaign A total of 196 girls have been exposed to TNPA careers; National Career Week Expo Information on maritime careers was shared with 9 883 learners from rural schools in Venda, Cape Town, Richards Bay and East London; East London Rode Senior Secondary School in Mount Ayliff is one TNPA’s adopted school in East London Rehabilitated the school infrastructure, improved learning facilities and installed smart boards; Buffalo City FET and ITEC Facilitating the provision of Saturday classes in pure Mathematics, Physical Science and Technology to learners from schools around East London – project is ongoing; 25

REGION PROJECTS

Port Elizabeth Ngqura Newell High School is one of the adopted schools in Port Elizabeth 130 learners in grade 12 have been put on a Driving Simulator project (partnership with CDC). This will improve employability of leaners who will not proceed to tertiary; Motherwell Public Swimming Pool (Partnership with Swimming SA) Rehabilitation of pool which will benefit schools in Motherwell and some TNPA employees, through the ‘learn-to-swim’ campaign; Penguin Facility at St Francis Refurbishment of Facility and rehabilitation of penguins; Durban Ndukwenhle High School Refurbishment of Science lab and ablution facilities; Menzi High School Refurbishment of Grade 12 classroom; Science Kits to 9 schools in KZN Saivelle HS, Wentworth HS, Umbilo HS, Umlazi Combined HS, Menzi HS, Zwelibanzi HS, Ndukwenhle HS, Meyerbank HS, and Ispingo HS; Kastura Gandhi Primary School Donated desks; Umtshezi High School (Ladysmith)  refurbishment of ablution facilities;

Corporate Social Investment (2)

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REGION PROJECTS

Richards Bay Installation of GSM Voice Fax Gateway, a multifunctional device designed for facsimile and voice calls in 140 schools in rural parts of KwaZulu Natal; Khombindlela and Siphosethu High Schools are the adopted schools in Richards Bay region Delivered Mathematics and Physical Science dictionaries learners in grades 10 to 12 at the two schools; Saldanha Bay Louwsville High School – adopted school Provision of mobile science labs Mfesane NGO Environmental and biodiversity of coastal lines Siyabonga Huis van Danksegging Upgrade of the Pikanini Creche Upgrade of current boardroom Maintenance to building (paint interior) Replace portion of roof Westcoast HIV and Aids NGO Donation to support NGO initiatives Cape Town Simon’s Town Maritime School: a prestigious maritime high school A partnership with the school which ensures accommodation of 22 bursary students from the adopted schools to study maritime.

Corporate Social Investment (3)

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Ablution facility at Mtshezi HS Learn to swim campaign with Swimming SA Handover of Science kits in Saldanha Techno girl campaign Take a girl child to work campaign

• MDS Strategy
• Executing the Ports Act
• Tariff Methodology and Pricing Strategy
• Procurement Spend and CSI Initiatives
• Transformation
• TNPA Memberships

Contents

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Management Employees with disabilities

55% 18% 8% 19% 58% 17% 7% 17% African Coloured Indian White 201308 201408 2.1% 2.3% 201308 201408 201308 201408 72% 28% 71% 29% Male Female 201308 201408 47% 15% 14% 25% 69% 31% 50% 14% 13% 22% 68% 32% African Coloured Indian White Male Female 201308 201408

Transformation within TNPA : 2014 vs 2013

Gender Equity

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YTD : August 2014

Employment Equity - Black Employees - % Employment Equity - Women Extended Exco - % Employment Equity – Employees with Disabilities – % Employment Equity – All Women - %

82% 83% 83% 80% June July Aug Target 14/15 2.3% 2.2% 2.3% 2.5% June July Aug Target 14/15 29% 29% 29% 35% June July Aug Target 14/15 42% 42% 50% 50% June July Aug Target 14/15

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Skills Development Initiatives

Focus Area Initiatives Achievements

Skilled Workforce

• Helicopter aviation training

programme;

• Execute Pilots, Chief Marine

Engineering Officers (CMEO), Tug Masters, Dredge Masters training programmes;

• 22 Helicopter pilots graduated;
• 6 Helicopter Engineers in training;
• Continuous Professional Development

Programme for CMEO’s : 9 candidates to qualify June 2015

• 153 Marine Engineering Officers on

Development programme : to qualify December 2014;

• Implement Young

Professionals Development programme;

• Intake of 50 for 2014/15;
• Talent management

programme;

• Leadership Development;
• Continuous Improvement;
• 1 female senior manager completed

International Leadership Development Programme through TETA (Wits & Ireland);

• 2 female engineers nominated for the JICA 18

months Masters programme w.e.f Sept 2014;

• Continuous Improvement Training – Japan;

• MDS Strategy
• Executing the Ports Act
• Tariff Methodology and Pricing Strategy
• Procurement Spend and CSI Initiatives
• Transformation
• TNPA Memberships

Contents

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TNPA Memberships

• International Association of Ports and Harbours;
• PMAESA;
• International Harbour Masters Association;
• International Association of Lighthouses and Aids to Navigation;
• International Maritime Organisation;
• Intermodal Africa;
• Cruise Indian Ocean Association;
• International Maritime Pilot Organisation;

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Thank you