Transnet Capital Expansion Programme

Transcription

1 Transnet Capital Expansion Programme ONE PROGRAMME TWO HUGE CHALLENGES ANN WILSON CPO TRANSNET CAPITAL PROJECTS Transnet s Vision And Mission Transnet Limited is a focused freight transport company delivering: Integrated, efficient, safe, reliable and cost effective services which help promote economic growth in South Africa INCREASED Market share IMPROVED Productivity and profitability PROVIDING Capacity for customers ahead of demand 1

2 Structure to support strategy TRANSNET COMPANY Transnet Freight Rail RAIL Transnet Rail Engineering Operating divisions (continued businesses) National Ports Authority PORTS Transnet Port Terminals Supporting businesses: Property, Capital Projects PIPELINE Transnet Pipelines SA Express Discontinued businesses Transtel Telecoms Viamax Discontinued Businesses Autopax freightdynamics Housing Loan Book Shosholoza Meyl Arivia.kom Market Challenges: Commodity Current requirement Containers 3.3 million TEU 4.8 million TEU 13.5 million TEU ~ 4 x Coal 68 million tons 84 million tons 92 million tons ~1.35 x Iron ore 30 million tons 60 million tons 92 million tons ~ 3 x Manganese 2.1 million tons 6.3 million tons 8.8 million tons ~ 4 x Liquid bulk 5.2 million tons 15 million tons 42 million tons ~ 8 x Vehicles units units units ~ 4 x 2

3 All Operating Divisions have high growth expectations over the next 5 years NPA/Ports Terminals Freight rail GFB Mv % 108 Containers TEUs 3, % 4,800 Coal export Mt % 84 Major volume growth for Coal (domestic): 7 Manganese : 3 Iron and Steel : 3 Automobiles Units +67% 925, , / /12 Ore export Mt +100% Pipelines / /12 Refined products b.lit +40% / /12 Capex Spending (Continuing Businesses) Five-year Plan: R78 Billion RAIL Transnet Freight Rail R34,8 bn Coal Line R4,9 bn Ore Line R3,8 bn General Freight R15,3 bn Maintenance Capitalisation R10,8 bn Freight Rail 45% Pipelines 13% 24% 12% Port Terminals PIPELINE Transnet Pipelines R11 bn Multi-product pipeline R10,9 bn* Gas line upgrading R0,2 bn * Latest estimate R11.2bn PORTS Transnet Port Terminals R9,5 bn Durban R0,9 bn Richards Bay R0,7 bn Ngqura R1,5 bn Cape Town R0,4 bn Saldanha R2,9 bn RAIL Transnet Rail Engineering R4,1 bn Equipment - R2 bn Upgrade of facilities R1,1 bn 5% Rail Engineering National Ports Authority PORTS Transnet NPA R18,5 bn Richards Bay R0,8 bn Ngqura R4,7 bn Cape Town R3,8 bn Durban R7,6 bn Floating craft R0,7 bn Infrastructure investment driven by National Infrastructure Plan 5 year rolling plan, 30 year framework based on market predictions and customer requirements 3

4 THE INFRASTRUCTURE CHALLENGE CAPE TOWN CONTAINER TERMINAL Upgrade to a modern deep water 4-berth container terminal to handle 1.4 million TEU p.a. throughput at the Port Container Handling Equipment Quay Refurbishment Basin Deepening Reconfiguration 4

5 PORT OF NGQURA Port of Durban 5

6 Durban Harbour Entrance Widening Execution Phase Widen the Entrance Channel 121m to 220m Deepen the Entrance Channel 12.8m to 19m/17m/16m Sand by Pass System Durban Point Car Terminal Ph 1 Feasibility / Execution Phase 6

7 Re-engineering of DCT Execution Phase Project Schedule Reconfiguration of the existing DCT stacking areas Efficiency improvements (truck stop) Provision of additional stack space at Y-Site and relocation of facilities Repairs, maintenance and upgrade of DCT infrastructure Completion Date Complete End April 08 End Nov 09 End July 10 Pier 1 Status 15 December 2007 General Photograph 7

8 Marine Programme Maydon Wharf Feasibility Phase All Marine works requirements Infrastructure requirements and supporting services Verification of the rail capacity requirements Environmental specialist studies Quay wall refurbishment 8

9 BAYHEAD EXPANSION Current Layout BAYHEAD EXPANSION Artist s Impression of Proposed Layout Phase 1 (6 berths, 3.7 mil TEU s) Cost R37.7B (R 10,189/TEU) Phase 2 (5 berths, cum. 3.1 mil TEU s) Cost R20.1B (R 6,484/TEU) Total 6.8M TEU, R57.8B 9

10 Port of Richards Bay Layout Richards Bay Container Terminal & MPT Expansion Feasibility Phase Estimated Contract Value Summary Interim Works Paving > R250m > Mar 08 Jul 09 10

11 Oreline Expansion Programme Phase 1A / 1B & 1C Expansion Update 29 Mtpa 39 Mtpa (1A) 45 Mtpa (1B) 58 Mtpa (1C) 65 Mtpa (2A) 90Mtpa (2B) : Export Loop 17 Loop 18 Loop 15 Loop 16 Loop 19 Postmasburg Link Loop 3 Salkor North Contents 1 Contents 1 Contents 1 Contents 1 Loop 1 Loop 5 Loop 2 Salkor Yard Loop 4 Loop 7A Loop 6 Loop 9 Loop 11 Loop 12 Loop 8 Loop 13 Loop 14 Loop 10 Rail Scope Loop Extensions Salkor Yard Upgrade New North Loop New Loco Workshop Formation Repairs Feeder Line Upgrade Eskom Supply Upgrade New Rail Link Sishen South Train and Formation Maintenance Equipment Port Link Oreline Expansion Programme Port Scope Reclamation Roads & Underground Services New By-pass Conveyor New Stacker Reclaimers RO Plant Power and System Upgrade Reclaimed area S/R 4 Dredging & Staggered Shiploading 11

12 SPECIAL PROJECTS Current Assignments Refurbishment of the Dry Bulk Terminal Port of Richards Bay Manganese Export Terminal Refurbishment Port Elizabeth New Manganese Export Terminal Feasibility Study Port of Ngqura Orex Terminal Ship Loader Trippers Redesign and Build Port of Saldhana SPECIAL PROJECTS Richards Bay Dry Bulk Terminal Upgrades to 40 km of Conveyors Refurbishment of two (2) wagon Tippers Extension of Conveyor P1 / P2 Gantry Refurbishment of Ship Loaders and unloaders (x 11) Infrastructural Upgrades and Refurbishments Operational and Maintenance Improvements 12

13 SPECIAL PROJECTS Port Elizabeth 4.2 Mtpa Manganese Terminal Refurbishment Ngqura Port PE Port Stockyard Stacker & Reclaimer 13

14 Tippler Shiploader 14

15 NEW MULTI PURPOSE PIPELINE (NMPP) NORTH - WEST GAUTENG PRETORIA WEST RUSTENBURG AIRPORT TARLTON LANGLAAGTE MEYERTON POTCHEFSTROOM WALTLOO WITBANK KENDAL ALRODE ø406,4 ( 16" ) ø457,2 JAMESON PARK (18") 10 SECUNDA MPUMALANGA KLERKSDORP SASOLBURG COALBROOK STANDERTON 16 Kendal to Waltloo 16 JP to Alrode (ALR) & 16 ALR to Langlaagte WILGE MAGDALA KROONSTAD FREE STATE VOLKSRUST VREDE T QUAGGA INGOGO NEWCASTLE VRYHEID SCHEEPERSNEK FORT MISTAKE Inland Terminal & Pump Station BETHLEHEM BHT VAN REENEN 6 KWAZULU / NATAL LADYSMITH MAHLABATINI N EMPANGENI LESOTHO Pump Stations #2 and #6 ø323,8 MOOIRIVER ( 12" ) ø406,4 ( 16" ) ø457,2 HOWICK ( 18" ) DUZI HILLCREST 2 MNGENI 1 DURBAN RICHARDS BAY INDIAN OCEAN Coastal Terminal / Pump Station # 1 Transnet Pipelines NMPP Project Terminals Coastal Terminal 2 X m 3 tanks contained in concrete bunds 4 X m 3 tanks contained in concrete bunds Inland Terminal 2 X m 3 tanks contained in concrete bunds 4 X m 3 tanks contained in concrete bunds Pipeline 535km of 24 pipeline 170km of 16 pipeline 4 pump stations 2 along the route One at each of the terminals 15

16 THE SOCIO ECONOMIC CHALLENGE SOCIAL ECONOMIC CHALLENGE Expanded Public Works Programme & ASSGISA Poverty alleviation & local labour Significant Skills Shortage Industry Representative of Countries Demographics Development of Emerging Contractors Sustainable & Competitive Industry NEC3 contract administration skills Safety Culture LTI frequency rate target 16

17 INSANITY IS DOING THE SAME THING OVER AND OVER AND EXPECTING A DIFFERENT RESULT SOMETHING NEEDS TO CHANGE IN ORDER TO DELIVER BOTH OBJECTIVES SUCCESSFULLY DIFFERENT APPROACH TO DELIVERY The way employer and contractors engage needs to change. We need to work in collaborative partnerships towards a common goal in such a way that maximises the skills and knowledge available and incentivises both parties to achieve this; ultimately creating a win win win for the Employer, Contractor and South Africa. 17

18 SUMMARY OF CONTRACTING CONTRACT OPTIONS STRATEGY FOR THE NMPP PROJECT Arup/Warley Parsons Alliance Design, Part Procurement and Client Project Management Pipeline Contractor ECC Option C With Over Arching Agreement Project Construction Contracts based on NEC3 ECC Pump Station & Terminals Contractor Tanks Design & Construct Contractor ECC Option C or D With Over Arching Agreement ECC Option A or C System Wide Contracts Automation Communications SAP Integration ECC Option dependant on scope PIPELINE CONTRACT Why Option C Status Work scope not fully defined and requires detailed design and engineering; Need for further Site Investigation; Final materials quantification, identification and delivery to be worked out Opportunity to develop methodology to reduce cost Option C provides for risk sharing for the uncertainties to reduce the overall Contractor s risk in undertaking the Works; The final cost will be visible and verified; Financial incentive exists to reduce cost, deliver socio economic objectives and share in the savings 18

19 Contract Data Review KPI s & Share Range Introduced Key Performance Indicators (KPI s) These will be used to assess overall performance against wider objectives and the final score will adjust any Share generated under pain/gain share Clause i.e. Total share 500,000 ZAR KPI score 96% = share adjusted to 480,000 Option C, provides for a share range to assess the sharing of any cost under or over the Agreed Target i.e. if the cost is 150,000 less than the Agreed Target which may equate to 97% of the Target then the calculation is 150,000 x 45% = 67,500 paid to the Contractor in addition to the Actual Cost with the same principle applied to over spend PROPOSED CONTRACTING RELATIONSHIP OVERARCHING AGREEMENT EPCM Alliance Arup WorleyParsons (The Consultant) PSC with PSC with contractual roles contractual roles & responsibilities responsibilities remain Transnet (The Employer) ECC Option C ECC Option with contractual with contractual roles & roles responsibilities responsibilities remain Pipeline Contractor (The Contractor) The Project Manager & Supervisor 19

20 OVERARCHING AGREEMENT The purpose / basis of the Agreement is: Sets out working arrangement that ties the Employer, the Consultant and the Contractor together to jointly manage a project target cost Reduces interfaces between the parties and avoids shadow management Drives the Parties to all pull together as each party is responsible for the Total Project Budget and can share in the rewards of efficiency whilst ensuring inefficiently is also shared All existing contractual liabilities between the Employer & the Consultant and the Employer & the Contractor remain in place. Establish and define the roles and responsibilities of the Parties to enable them to work as members of a team focussed upon the successful delivery of the Project So far as is necessary amends the Works Contract and the EPCM Contract Establish the principle for the operation of a Supervisory Board (to collectively make decisions for the good of the Project) Establish the revised incentive arrangement OVERARCHING AGREEMENT Establishes a Project Target Cost that the parties are jointly responsible for and manage with all parties being focused on driving down cost, improving quality and ensuring timely delivery The Project Target Cost includes all elements of the project that the parties have an influence upon Includes a normal contingency allowance jointly agreed, built up by a series of Quantitive Risk Analysis Workshops involving recognised Risk Analysis software such as Risk & Monte Carlo simulation The Parties accept by the inclusion of the Risk Allowance into the Project Target Cost, the Project Target Cost is capped with no changes or Compensation Events allowed The Win / Win is to ensure the project comes in under the Project Target Cost, with all parties benefiting from a share of the savings, whilst delivering all the objectives of the project. 20

21 In Summary Expanding our toolkit, being flexible in our contracting approach and working collaboratively to fully utilise the skills and resources available to us, will ensure South Africa emerges from the Expanded Works Programmes with the infrastructure it requires to ensure continued economic success and with a skilled, sustainable and representative construction industry to deliver the next wave of development. 21