Richards Bay B2B Engagement MDS Journey 15 September 2014

Transcription

1 1 Richards Bay B2B Engagement MDS Journey 15 September 2014

2 Contents MDS Strategy Executing the Ports Act Tariff Methodology and Pricing Strategy Procurement Spend and CSI Initiatives Transformation TNPA Memberships 2

3 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

4 MDS TNPA s Priority MDS Initiatives Initiative name Description Status 1 Implement Asset Management Lifecycle strategy Timely replacement/refurbishment of asset Implemented 2 Compliance to asset maintenance procedures Optimal maintenance of port assets Maintenance executed 3 Capital portfolio management model Timely delivery of capital projects within budget Resource constraints 4 Reduce procurement cycle times Resolve procurement delays impacting capital delivery Resource constraints 5 Implement CRM blueprint Integrated approach to manage customer relations Implementation commenced 6 Review/implement NBD programme of projects Business development initiatives to support volume growth Projects identified and implementation commenced 7 Implement s56 process projects (e.g.. NCT, Manganese) Initiate s56 projects to create new terminals Projects identified and implementation commenced 8 Establish efficiency targets and oversight teams Monitor port performance against efficiency targets TOPS implemented, Marine, Road and Rail to follow 9 Finalise Tariff methodology and Pricing strategy Refine/improve pricing methodology & pricing strategy Tariff Methodology agreed, Pricing strategy in consultation 10 Implement OHSAS at all ports Roll out occupational health and safety standards Implemented across all ports 11 SHE oversight audits (legal) terminals/tenants Compliance check of SHE legal requirements Audits have been completed Execute marine, engineering, port planning, real estate & supply chain training programmes Increase capacity & capability to deliver capital Create a skilled workforce Optimal resourcing to execute capital programme Training programmes in place and training commenced Structure finalised and resourcing commenced 14 Talent management and succession pipelines Talent management for strategic and critical positions Implemented and rolled out to all management levels 15 Issue terminal operator licenses (deemed licences) Conversion of deemed licences All deemed licences issued

5 Capital Programme 2015/ / Total Investment of R 53Bn : 2015/ / / / / / / / /22 TNPA Capital Investment Programme : 2013/ /19 Total Capital Sustaining Capital Expansion Capital 5

6 Capital Programme 2015/ /21 TNPA Capital Investment per Port : 2015/ / Rm Richards Bay Durban East London Ngqura Port Elizabeth Mossel Bay Cape Town Saldanha Bay Head Office 6

7 Some of the key capacity creation projects Port Project Estimated Capacity 1. Durban Container Terminal Berth Deepening 2. Durban Salisbury Island Infill 3. Port of Ngqura Manganese Terminal 4. Port of Saldanha Iron Ore Expansion 0.3m TEU s 2019; 1.8m TEU s 2024; 16mpta capacity 2019; 15mpta 2019; 7 5. Port of Saldanha LPG Import Terminal 6. Port of Saldanha Oil and Gas supply base 5 500t capacity 2016; 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);

8 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; 8

9 Contents MDS Strategy Executing the Ports Act Tariff Methodology and Pricing Strategy Procurement Spend and CSI Initiatives Transformation TNPA Memberships 9

10 Optimally serve the economy Core functions (National Ports Act Section 11) Landlord 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 Master planner Plan, improve, develop and maintain port infrastructure Regulator and Controller Controller of ports services & facilities 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 port services and facilities are provided, and may enter into agreements or licence other parties to provide these Marketer & administrator Ensure that adequate, affordable, equitable and efficient port services and facilities are provided for port users Change agent 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 10 Coordinator with other state agencies Advise on all matters relating to the port sector, and liaise with all stakeholders

11 Optimally serve the economy Ports Act : Key Achievements Landlord Master planner 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; Controller of ports navigation Controller of ports services & facilities Issued Port Rules and Regulations, Harbour Master Instructions; ISPS certified ports; OHSAS and ISO compliant ports; Deemed licences issued; Port Services licenced; Port Service and Terminal Operator oversight audits being conducted; Marketer & administrator Change agent 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; 11 Coordinator with other state agencies Established PCC and NPCC; Established Port-City, Port-Community and Port-Government Agency platforms; Established TNPA-DPE/DOT Bilateral; Memberships PMAESA/IAPH;

12 Contents MDS Strategy Executing the Ports Act Tariff Methodology and Pricing Strategy Procurement Spend and CSI Initiatives Transformation TNPA Memberships 12

13 Regulatory Framework and Tariff Methodology (1) 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 of 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; 13

14 Regulatory Framework and Tariff Methodology (2) The multi-year approach was considered optimal as it would provide certainty to all stakeholders : o reduced regulatory effort by all affected parties; o providing certainty to funders of the Authority; and o 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; 14

15 Final Tariff Methodology (1) 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; 15

16 Final Tariff Methodology (2) 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) 16

17 Pricing Strategy Update During 2014 discussions have been held with Regulator ito further refinement of 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. 17

18 R1bn Export Discount Programme (1) 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 each. The export cargo dues discounts was automated through TNPA s invoicing system; At end of FY 2012/13 R million remained unallocated; 18

19 R1bn Export Discount Programme (2) The Regulator has decided that this excess (R 121.3m indexed to R m) be distributed as follows: New vehicle manufactured in SA : R per unit (Total rebate R ); 6m/20 full container : R each (Total Rebate R ); 12m/40 / 13.7m/45 full container : R each (Total Rebate R ); To date the unallocated discount has been distributed in full except for R 1.4m; 19

20 Contents MDS Strategy Executing the Ports Act Tariff Methodology and Pricing Strategy Procurement Spend and CSI Initiatives Transformation TNPA Memberships 20

21 Procurement Spend (TBA)

22 Preferential Procurement Indicators : 2013/ BBBEE Actual BBBEE % Target % Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Total Actual BBBEE % Target % During 2013/14 TNPA s Measurable Procurement Spend was R with a BBBEE contribution of R as a result of procurement from BBBEE Suppliers

23 Preferential Procurement Indicators : 2014/ BBBEE Actual BBBEE % Target % Apr May Jun Jul Aug Actual BBBEE % Target %

24 Preferential Procurement Indicators 2014/15 > 50% Black Owned > 30% Black Women Owned Apr May Jun Jul Aug Actual BO % Target % Actual BO % Target % Apr May Jun Jul Aug Actual BWO % Target % Actual BWO % Target % TMPS R and R spent with > 50% BO Businesses. TMPS R and R spent with >30% BWO Businesses. QSE EME Apr May Jun Jul Aug Actual QSE % Target % Actual QSE % Target % Apr Ma y Jun Jul Aug Actual EME's % Target % Actual EME's % Target % TMPS R and R spent with QSE Businesses. TMPS R and R spent with EME Businesses.

25 Corporate Social Investment (1) REGION Gauteng and National Projects 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 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 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

26 Corporate Social Investment (2) REGION Port Elizabeth Ngqura Durban PROJECTS 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; 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; 26

27 Corporate Social Investment (3) REGION Richards Bay Saldanha Bay Cape Town 27 PROJECTS 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; 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 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.

28 28

29 Techno girl campaign Take a girl child to work campaign Ablution facility at Mtshezi HS Learn to swim campaign with Swimming SA Handover of Science kits in Saldanha 29

30 Contents MDS Strategy Executing the Ports Act Tariff Methodology and Pricing Strategy Procurement Spend and CSI Initiatives Transformation TNPA Memberships 30

31 Transformation within TNPA : 2014 vs 2013 Equity Employees with disabilities % 55% 2.3% 18% 17% 19% 17% 2.1% 8% 7% African Coloured Indian White Gender Management % 68% 72% 71% 50% 47% 28% 29% 15% 14% 14% 13% 25% 22% 31% 32% 31 Male Female African Coloured Indian White Male Female

32 YTD : August 2014 Employment Equity - Black Employees - % Employment Equity Employees with Disabilities % 82% 83% 83% 2.3% 2.3% 2.5% 80% 2.2% June July Aug Target 14/15 June July Aug Target 14/15 Employment Equity - Women Extended Exco - % Employment Equity All Women - % 50% 50% 29% 29% 29% 35% 42% 42% June July Aug Target 14/15 June July Aug Target 14/15 32

33 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; Implement Young Professionals Development programme; Talent management programme; Leadership Development; Continuous Improvement; 22 Helicopter pilots graduated; 6 Helicopter Engineers in training; Continuous Professional Development Programme for CMEO s : 9 candidates to qualify June Marine Engineering Officers on Development programme : to qualify December 2014; Intake of 50 for 2014/15; 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; 33

34 Contents MDS Strategy Executing the Ports Act Tariff Methodology and Pricing Strategy Procurement Spend and CSI Initiatives Transformation TNPA Memberships 34

35 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; 35

36 Thank you