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Our mandate
The mandate of Transnet SOC Ltd (Transnet or the Company) is to assist in lowering the
cost of doing business in South Africa, enabling economic growth and ensuring security
of supply through providing appropriate port, rail and pipeline infrastructure in a cost-
effective and efficient manner, within acceptable benchmarks.
Transnet’s mandate and strategic objectives are aligned with Government’s New
Growth Path (NGP) and the Statement of Strategic Intent (SSI) issued by the Minister
of Public Enterprises.
Our vision
Transnet is a focused freight transport company, delivering integrated, efficient, safe,
reliable and cost-effective services to promote economic growth in South Africa.
This is achieved by increasing the Company’s market share, improving productivity and
profitability and by providing appropriate capacity to customers ahead of demand, within
affordability limits.
Our mission
The Company is reliable, trustworthy, responsive and safe; its employees are committed,
safety-conscious, ethical, disciplined and results orientated.
Mandate, vision and mission
1
Transnet SOC Ltd Integrated Annual Report 20112
About this Integrated Annual Report
As a requirement of the King Code of Governance for
South Africa (King III), ‘integration’ has been on the
agenda for many South African companies in the past
year. In putting together this report, the Company was
informed by various guidelines, benchmarks and
engagements, including the draft Discussion Paper
issued by the South African Integrated Annual
Reporting Committee. Based on discussions, the
underlying purpose of integration is to optimise the
positive contribution the Company makes to society in
the short, medium and longer term. Integrated
reporting serves to share this information with
stakeholders.
The value of integrated reporting became apparent to
the Company in that it required a focus on key material
impacts, to engage with stakeholders, to clarify the
linkages between sustainability and the core business
and to ensure performance is communicated clearly to
the relevant target groups.
While the Company explored this to some extent
previously, the sustainability programme has gained
additional impetus based on this revised approach.
This is Transnet’s first Integrated Annual Report, and
while the Company has made some progress, ongoing
improvement in processes and output will continue to
be a priority in future years. Together with Transnet’s
commitment to the NGP, this approach will yield
increasing benefit, both internally and in respect of
Transnet ‘s social contribution.
These requirements reflect a step-change in reporting
for Transnet, South Africa and globally, and as a state-
owned company (SOC) Transnet should play a role in
contributing to that shift.
The report includes comparative information on
Transnet’s performance in prior years, with
information disclosed in past Annual Reports being
restated where appropriate.
The report not only reflects performance information
for the 2011 year, but also contains future targets
based on the Company’s strategy, commercial
prospects, policies and procedures.
It must be noted that there are possible variations
between previously stated objectives and present
targets given that a range of variables could impact
future business activities and may have altered targets.
Where possible, reasons for variations are provided.
The consolidated performance information in the
report covers all Transnet’s Operating divisions and
Specialist Units. In addition, detailed Operational
reviews are presented for Transnet Freight Rail
(Freight Rail), Transnet Rail Engineering (Rail
Engineering), Transnet National Ports Authority
(National Ports Authority), Transnet Port Terminals
(Port Terminals) and Transnet Pipelines (Pipelines).
A standalone Sustainable Development Report (SDR)
is written overtly from the perspective of the
sustainability “lens” and is available on the Transnet
website at www.transnet.net. It is intended to be a
more broadly accessible document, rather than
targeting primarily financial stakeholders. The SDR
includes a detailed index in which Transnet responds
to each of the “G3” criteria of the Global Reporting
Initiative (GRI).
Other than the audited annual financial statements,
the Company has not commissioned additional
external assurance of the non-financial information
provided in this report.
Transnet’s first Integrated Annual Report (the report) covers governance, financial, social,
environmental, broader economic performance and provides a high-level overview, clarifying the
linkages between sustainability and the core business, including the sustainability performance
of the Operating divisions for the year ended 31 March 2011. It provides an account of the
Company’s progress to date and offers a forward-looking perspective in terms of future plans
and value-generating strategies.
Structure
1PRODUCTIVITY
AND EFFICIENCY
4FINANCIAL
SUSTAINABILITY
3CAPITAL
INVESTMENT
2VOLUME GROWTH
5HUMAN CAPITAL
8REGULATORY
6STRATEGIC ENABLERS
7SAFETY, HEALTH,
ENVIRONMENT AND QUALITY (SHEQ)
The following icons are used in the report to depict the Quantum Leap focus areas:
Achievement against the Shareholder’s expectations
The Transnet mandate and strategic objectives of the Company over the medium term are set
out in the Shareholder’s Compact between Transnet and the Department of Public Enterprises
(Shareholder Representative).
To ensure alignment of Shareholder expectations and the strategic intent of the Company, key performance indicators
(KPIs) have been identified for the Company and for each Operating division. These KPIs have helped ensure focus on
the priority value drivers in the key areas of the business is maintained. The Board and Group Executive Committee
monitors the performance against these KPIs to ensure that the strategic objectives of the Company is achieved.
Despite the challenging economic environment, Transnet has exceeded most of its Group targets as set out in the
2011 Shareholder’s Compact, which continues to establish a strong platform for future growth. Details regarding the
Operating division KPIs are contained in the Operational reviews and the Report of the Directors.
Operating expenditure
as a percentage of
revenue (%) ≤60 58,5 ≤60
Return on average
total assets (excluding
CWIP) (%) (a) ≥8,0 6,6 ≥8,0
Cash interest
cover (times) ≥3,2 3,9 ≥3,2
Gearing (%) ≤46 41,1 ≤46
Group key performance indicators (KPIs)
2011 TARGET
2011 ACTUAL
2012TARGET
Financial value creation
Infrastructure and maintenance
Human capital
Safety
Capital
investments (%) (b) ≥90 94 ≥90*
Maintenance
costs (%) ≥90 98 ≥90*
Disabling injury
frequency rate
(rate) 0,85 0,98 ≤0,80
Training spend as
a % of personnel
costs (%) 3 – 4 3 ≤3,5
(a) Total average assets (excluding capital work in progress) comprise a combination of revalued assets and depreciated assets as per Transnet’s accounting policies and have been computed as an average for the two years ending 31 March 2010 and 31 March 2011.
(b) Capital investments exclude borrowing costs, includes capitalised finance leases and capitalised decommissioning liabilities.
Note:i) The industrial strike action during May 2010 had a detrimental impact on Transnet’s operations and consequently on certain agreed
KPIs included in the 2011 Shareholder’s Compact. Accordingly, revised targets for 2011 have been agreed with the Shareholder Representative as presented above.
ii) A number of new Shareholder’s Compact KPIs have been added for 2012 that were not reported on in 2011. These include the number of engineering trainees, technicians, artisans and sector specific trainees. In addition, specific KPIs for employment creation and employee fatalities have been added for 2012.
* Not a Shareholder’s Compact KPI in 2012. Internal targets are reflected.
3
Introduction
The Quantum Leap strategy has been aligned to incorporate the requirements of the
NGP and the SSI .
The Quantum Leap strategy is informed by the policy context of the developmental state
and the NGP, and acknowledges the critical role of state-owned companies (SOCs) as
drivers of the developmental state. Accordingly, SOCs need a culture shift from one based
on compliance and process to one focused on delivery and outcomes as well as a closer
and more collaborative relationship with Government departments and other State
institutions. The underlying urgency on volume growth, increased productivity and
efficiency, capital investment, financial sustainability and safety, are the core elements of
the Quantum Leap strategy and continue to inform efforts to improve customer service.
The generic strategic objectives of SOCs can be summarised as contributing to
economic growth through:
The provision of world-class infrastructure and technologies;
The expansion of economic infrastructure;
Job creation and skills development; and
Industrial capacity building through a more strategic approach to
procurement and operations.
Increase productivity and efficiency
1
Volume growth
2
3
Capital investment
4 Financial sustainability
IMPROVINGCUSTOMER
SERVICE
Regulatory
Humancapital
Strategic enablers6
SHEQ
Quantu
m Leap strategy
New Growth Path
Quantum Leap strategy
Transnet SOC Ltd Integrated Annual Report 20114
The rollout of the capital expenditure programme continues to
create capacity ahead of demand, despite the impact of the
economic recession. However, rail operations in Freight Rail
have underperformed on key elements of the Quantum Leap
strategy. Interventions to address these areas have been
developed and the Company is on track to support the drive
for greater operating efficiencies, service levels and customer
responsiveness.
As a SOC, Transnet has formalised a high level commitment to
the NGP. With a focus covering skills, jobs, the ‘green economy’,
localisation through competitive supplier development,
innovation and rural development, these discussions have
enabled Transnet to reflect on how it creates and sustains value
for a range of stakeholders in the short, medium and longer term.
As such, the NGP commitments effectively frame the
sustainability-related contributions for Transnet and together
with the Quantum Leap strategy, will guide and direct the
sustainability performance going forward. The ability of the
Company to contribute value to society is directly aligned with the
operational goals, as contained in the Quantum Leap focus areas.
Transnet’s fundamental approach to job creation is that greater
efficiency and effectiveness of the freight system will encourage
economic growth and thus lead to the creation of jobs.
To support the growth of the Company and the commitments to
the NGP, Transnet plans to increase direct jobs by 4,5% in 2012
and to maximise opportunities for job creation going forward.
The combined effects of Transnet’s operations and capital
investments will contribute to an average increase of
approximately 200 000 direct and indirect jobs over the next
five years.
Transnet is entirely self-funding and does not receive subsidies
from the Government. Consequently, the Company will focus on
volume growth, capital investment, financial sustainability and
continue to generate strong and stable cash flows and access the
debt capital markets for any shortfall in terms of its funding
requirements. It is, therefore, imperative that the Company earns
an appropriate return on invested capital to maintain a strong
financial position and to maintain its investment grade credit
rating. This, in turn, will provide the capacity for Transnet to
maintain and expand its port, rail and pipeline infrastructure and
support the Company’s efforts to improve customer service.
By enhancing efficiency, expanding rail market share, developing
the New Multi-Product Pipeline (NMPP) and increasing port
connectivity and productivity, Transnet contributes significantly
to reduced fuel use per ton of freight, enhanced energy security
and socio-economic development. These are the primary
material impacts and they are positive.
At the same time, in line with the environmental, social and
governance commitments, the Company is striving to achieve
these contributions with zero fatalities, significantly reduced
environmental impacts, exemplary levels of governance and
accountability and with due consideration to the risks and
opportunities emerging in a resource-constrained world.
To achieve the growth and efficiency objectives, the Company
has developed a demanding five-year capital investment plan of
R110,6 billion (excluding capitalised borrowing costs), focusing
on areas where existing infrastructure is inefficient and
contributing to bottlenecks in the freight logistics
transportation system. Transnet’s capital investment plan is
designed to provide maximum support for the NGP objectives to
achieve a responsive economic infrastructure. Transnet will also
work with the Department of Public Enterprises (DPE) to develop
a joint investment planning process to ensure that the Company’s
investment plan is aligned with those of other stakeholders.
Transnet is unable to fund a globally competitive freight
transport system single handed. It is therefore critical for the
Company to leverage private sector participation (PSP) in both
operations and investments. Significant opportunities for PSPs
exist in the container and intermodal space and in the iron ore
and coal segments. Transnet has started engagements with
customers and other logistics operators regarding private sector
investment in rolling stock and terminals and interest from the
private sector has been positive.
Transnet will continue to leverage procurement for the benefit of
the South African economy. Procurement will be effectively
utilised as a tool for industrial capability building and economic
transformation. Local sourcing will comprise approximately 88%
of the total planned capital spend over the next five years. The
focus on local suppliers will benefit Transnet’s supply chain cost
through efficiency improvements, such as reduced turnaround
time and support services. Key focus areas for industrialisation
and supplier development include rolling stock, port equipment
and other infrastructure.
Strategy overview
Since 2009, Transnet has been implementing its Quantum Leap strategy. The Quantum Leap strategy is aimed at
rapidly improving the pace of volume and revenue as well as, significant safety, productivity and efficiency
improvements. By adopting the Quantum Leap strategy, Transnet has sought to refocus the business on what
matters the most; the provision of improved services to its customers.
During the year, the Quantum Leap initiatives delivered meaningful improvements in the port and pipeline
operations, including volume growth and productivity improvements that, together with cost-reduction
initiatives, contributed to improved profitability.
Transnet SOC Ltd Integrated Annual Report 20116
49
Integrating sustainability into the Quantum Leap strategy
This process was initiated during the year through internal dialogues involving various functions including
risk, compliance, finance, environment, safety, human resources, the Transnet Foundation, and the Operating
divisions. This process identified the impacts the Company has on social and natural systems, as well as the
risks and opportunities arising from sustainability-related trends. It is clear that the sustainability drivers
indicated below will combine to create an increasingly volatile marketplace and consequently uncertainty will
impact the Company and will provide the context within which the Quantum Leap strategy and NGP
commitments are implemented.
A materiality process led to the development of a framework of key sustainability concerns. The linkages between these,
the Quantum Leap strategy and NGP commitments are indicated below. These five key areas also form the structure of the
standalone Sustainable Development Report.
KEY AREAS OF INTEGRATION
CREATING SHARED VALUE
LINK TO QUANTUM LEAP AND STRATEGIC INITIATIVES LINK TO NGP
Governance systems that drive accountability.
Builds social capital by promoting trust and accountability.
Safety, skills and a culture of delivery.
Builds human and social capital through personal and career development.
Efficiency, security and reliability.
Builds financial, manufactured and social capital by lowering costs of doing business, enabling economic growth and ensuring security of supply.
efficiency.
Environmental compliance and climate change.
Reduces environmental degradation; supports the protection and restoration of natural capital.
Aligning with priorities of the developmental state.
Builds social capital by addressing disparities and developmental challenges.
challenges.
SUSTAINABILITY DRIVERS RISKS OPPORTUNITIES
Resource constraints.
Climate change and associated response. pressures (including food distribution).
Green economy and increasing awareness of sustainability issues.
requirements.
and compliance.
contribution.
energy.
Continued social disparities.
properties.
skills development, social projects.
localisation and enterprise development.
Geo-political shifts. developmental challenges.
Transnet SOC Ltd Integrated Annual Report 201150
1PRODUCTIVITY AND EFFICIENCY
2VOLUME GROWTH
5HUMAN CAPITAL
6STRATEGIC ENABLERS
7SAFETY, HEALTH, ENVIRONMENT AND QUALITY (SHEQ)
8REGULATORY
4FINANCIAL SUSTAINABILITY
3CAPITAL INVESTMENT
Quantum Leap focus areas*
* Refer to pages 10 to 25 for key highlights and targets for each Quantum Leap focus area.
7
51
Managing sustainability at Transnet
KEY SUSTAINABILITY ACTIONS FOR 2012
Sustainability issues are cross-cutting and pervasive in the business. For this reason, the Company has not
established a separate sustainability division. The approach adopted has been one of co-ordination, seeking
constantly to highlight aspects of stakeholder value creation within the Quantum Leap strategy and NGP
commitments. The Company is currently assessing whether the Quantum Leap strategy, together with NGP
commitments, provide an adequate sustainability framework to work within or whether a separate framework
for sustainability would be preferable.
Either way, Transnet is committed to consolidating its plan of action around sustainability. Accordingly, the
Company will undertake further sustainability processes in the year ahead, both internally and with a range
of external stakeholders. Finalisation of the sustainability strategy is the responsibility of Transnet’s newly
established Board Social and Ethics Committee, which has executive oversight of the Company’s sustainability
performance.
Water quality testing, Durban.
Transnet SOC Ltd Integrated Annual Report 20118
99
Stakeholder engagement activities
At Transnet, relations with a broad range of stakeholders are a key aspect of understanding and managing
the social and environmental business risks. Transnet’s reputation is a vital intangible asset upon which
social trust is built, and the Company’s long-term ability to operate is ensured. While internal sustainability
dialogues are continuing, these have not yet been taken overtly to external stakeholders. Ongoing
engagements with customers, Government, suppliers and others relate to numerous sustainability-related
issues. Accordingly Transnet will continue to engage and respond to concerns and issues raised as illustrated
below. At present, the stakeholder engagement is managed as part of the Reputation Management strategy,
in which structured and systematic plans are outlined to manage Transnet’s reputation, guide stakeholder
engagement processes, and mitigate reputational risks should they arise. The 2011 Integrated Annual Report
and the Sustainability Development Report, are initial steps in exploring an overtly sustainability-based
dialogue with a broader range of stakeholders.
STAKEHOLDER GROUP ENGAGEMENT APPROACH
MAIN AREA OF STAKEHOLDER CONCERN TRANSNET’S RESPONSE
Shareholder and other SOCs
Shareholder’s Compact engagements.Quarterly report, Annual reports and Corporate Plans.SOCs CEO’s, Chairman and Chief Financial Officer forums.
nnual General Meetings.Board engagement with the Shareholder Minister, Deputy Minister and the Director General of DPE.
Shareholder’s Compact.
delivery.
commitments.
Compliance with sound principles of corporate governance.Implementing vigilant risk management and controls. Compliance with the following regulations: Public Finance Management Act, Treasury Regulations, Companies Act. Execution of the Quantum Leap strategy and fulfiling the Company’s mandate. NGP commitments.
Regulators and other Government agencies
Meetings with policy departments and Ministers.Periodic reports and returns to regulatory authorities. Periodic submissions to the relevant Parliamentary Portfolio Committees.
Compliance with all applicable laws, rules and standards.
Customers GCE roadshows.Customer satisfaction feedback and reports.Fact sheets, pamphlets and newsletters.
Improved customer service.
ahead of demand. SHEQ.
Suppliers Transnet Acquisition Council.BEE forums.Publications and site visits.Stakeholder engagement meetings.
Long-term growth opportunities created by:
Supplier development programmes.Governance and ethical conduct, reputation and contract management.Appointment of a procurement ombudsman.
Employees and labour unions
Strategic leadership forum.Internet/Intranet.Memoranda from the GCE.Culture Charter champions.
Assurance of: Sound governance, reputation, ethical transformation and management.Culture Charter scoring process and related initiatives.Transnet wellness programmes.Safety programmes.
The public, financiers and media
Press conferences.One-on-one interviews.Roadshows, media breakfasts.Corporate identity manual.
deliver on its commitments as set out in its Quantum Leap strategy.
investment plans.
investment plans on Transnet’s financial position and credit rating.
Launch of public advertising campaign.Private sector engagement.Investor updates and presentations.Market feedback.
Communities Partnerships, awareness campaigns.Corporate Social Investment Initiatives.
Demonstrating principles of accountability and care.Caring for pensioners through ex gratia (voluntary) payments and potential enhanced benefits.Aim to be an exemplar Company in terms of environmental compliance.
Transnet SOC Ltd Integrated Annual Report 201110
1PRODUCTIVITY AND EFFICIENCY
Highlights
Transnet has relentlessly focused on improving
service levels and customer responsiveness over the
past five years. Significant investments were made
in infrastructure and equipment to improve the
condition of assets in order to support the drive for
greater operating efficiencies, service levels and
customer responsiveness. Transnet has not met
certain targets, particularly in respect of rail
operations and safety which was exacerbated by the
three week industrial strike action in May 2010 as
well as derailments.
Transnet’s Quantum Leap strategy is designed
specifically to address these challenges and places
emphasis on achieving quantum leap improvements
in operating efficiency, productivity, reliability,
safety and environmental compliance, including
the restructuring of Freight Rail into business
segments. The successful implementation of the
strategy will result in increased volumes
transported, improved service delivery and better
utilisation of existing assets.
The capital investment programme will continue as
planned, thereby creating the required capacity
ahead of demand and to achieve the anticipated
volume growth.
Key productivity improvements during the year are
outlined alongside.
Refer to Operational reviews for challenges experienced during the year and plans to achieve all the targeted quantum leap improvements.
RAIL
Export coal tons per train increased from
7 400 to 7 900. Reliability remains a concern due to
an ageing fleet.
Record number of containers on rail handled on
Durban/Gauteng Corridor (Natcor) through City Deep.
Delivery of coal to Eskom and jet fuel to OR Tambo
International Airport – critical 2010 Fifa Soccer
World Cup flows.
>94% – Overall wagon availability.
0,38 faults/per million km-Wagon reliability.
PORTS
44% reduction in marine services delays.
Implementation of dual loading at the Port of
Saldanha – 6 959 tons/hour for export iron ore
loading rates.
Achieved a 23,8% improvement in moves per gross
crane hour (GCH) at DCT Pier 1 and has sustained an
average GCH of 29,5 since December 2010.
Despite DCT Pier 2 average GCH for the year being
only 23, the premium berths have improved
significantly due to productivity improvement
initiatives.
PIPELINES
Continued fulfilment of strategic role in the economy
by ensuring security of fuel supply to the inland
market.
Pipelines continued to perform at significantly
improved performance levels (regarding production
interruptions).
11
Looking ahead
6 133
2016
5 975
2015
5 809
2014
5 595
2013
5 400
2012
GTK/loco/month (’000)
ProjectionsTarget
8,58,59,010,0
11,0
Wagon turnaround (days)
20162015201420132012
ProjectionsTarget
General Freight
Four-year CAGR 3,2% Four-year
CAGR 6,2%
The 2012 target for shipping delays for tugs and pilots at all ports is less than 1,8 hours.
National Ports Authority
48
2016
46
2015
44
2014
42
2013
40
2012
TEUs per ship turnaround time (Ngqura) (average hours)
ProjectionsTarget
4443414040
TEUs per ship turnaround time (Durban) (average hours)
20162015201420132012
ProjectionsTarget
Four-year CAGR 4,7% Four-year
CAGR 2,4%
30
2016
30
2015
30
2014
28
2013
26
2012
Moves/GCH – DCT Pier 2(b)
ProjectionsTarget
30
2013
30
2012
30
2016
30
2015
30
2014
Moves/GCH – DCT Pier 1
ProjectionsTarget
Four-year CAGR 3,6%Performance level maintained
45 600
2012
63 394
2013
64 458
2014
64 458
2015
64 458
2016
GTK/loco/month (’000)
ProjectionsTarget
68
2016
68
2015
68
2014
68
2013
76
2012
Wagon cycle time (hours)
ProjectionsTarget
Export iron ore
The 2012 target for on time departures is 89(a).The 2012 target for on time arrivals is 152(a).
Four-year CAGR 9,0% Four-year
CAGR 2,7%
1 050
2016
1 040
2015
1 030
2014
1 020
2013
1 010
2012
Meantime between failures (days)
ProjectionsTarget
210
2016
255
2015
290
2014
300
2013
250
2012
Production interruptions – internal (cumulative hours per annum)
ProjectionsTarget
Pipelines
due to the commissioning of the NMPP.
Four-year CAGR 1,0% Four-year
CAGR 4,3%
Port Terminals
The 2012 target for tons loaded per hour at Saldanha Iron Ore
Terminal is 6 896.
(a) Minutes deviation from scheduled time.(b) Premium berths only.
25 023
2016
26 875
2015
24 266
2014
25 942
2013
24 700
2012
GTK/loco/month (’000)
ProjectionsTarget
Export coal
The 2012 target for on-time departures is 142(a).The 2012 target for on-time arrivals is 282(a).
5858585858
Wagon cycle time (hours)
20162015201420132012
ProjectionsTarget
Four-year CAGR 0,3% Performance level maintained
rget for on-time departures is 175(a).The 2012 target for on-time arrivals is 227(a).
Transnet SOC Ltd Integrated Annual Report 201112
Petroleum volumes grew by 1,5% compared to 2010 and was marginally above target.This was achieved despite the use of a constrained pipeline system.
increased by 2,2% compared to 2010, but were 3% below target.
strike action during May 2010 as well as operational issues such as cable theft and rolling stock related faults.
improvement in manganese volumes, a 12,0% improvement in domestic coal volumes and a 13,2% increase in containers on rail compared to 2010.
2011 @
VS2010
@ 2,2%2011 VS
2011 target 3,0%
General Freight (mt)
72,178,4 76,0 73,7
2009 2010 2011 2011
by 0,6% to 62,2mt, although 4,3% below target.
the impact of derailments, tippler constraints at Richards Bay Coal Terminal and adverse weather conditions during the third quarter of the year.
line was shut down for an extended period due to delayed maintenance, as a result of the industrial strike action, resulting in a loss of 3,1mt.2011 @
VS2010
@ 0,6%2011 VS
2011 target 4,3%
Export coal (mt)
62,2
2011
65,0
20112010
61,9 61,8
2009
2011 @
VS2010
@ 1,5%2011 VS
2011 target 0,5%
2009
17 216
2010
17 751
2011
17 928
2011
18 025
Petroleum (ml)
Highlights
increased by 3,4% to 46,2mt compared to the prior year.
derailments during the year, as well as capacity constraints at the mines negatively impacted volume growth, resulting in a 3,8% below target performance.
2011 @
VS2010
@ 3,4%2011 VS
2011 target 3,8%
Export iron ore (mt)
48,0
2011
46,2
20112010
36,8
44,7
2009
and the 2010 FIFA Soccer World Cup positively impacted container volumes, which increased by 12,5% compared to the prior year and by 5,8% when compared to target.
volumes were positively impacted by an increase in transshipments.
2011 @
VS2010
@ 12,5%2011 VS
2011 target 5,8%
3 8593 6293 800
Containers (’000 TEUs)
4 081
2011201120102009
2VOLUME GROWTH
13
With the NMPP being commissioned during the 2012 year, certain operational efficiencies are expected to be negatively impacted during the commissioning phase (as with any large project of this nature).
However security of supply is not a risk as Freight Rail will assist in ensuring security of supply with a planned allocation of 10ml/week for petroleum by rail.
General comments:Improving operational efficiency, productivity and service delivery, remains a key focus area, including the immediate restructuring of Freight Rail into business segments to achieve the required service delivery improvements.
thereby creating the required capacity ahead of demand and to achieve the anticipated volume growth. Refer to Operational reviews for plans to achieve the targeted volume growth.
increase by 14,5% to 84,4mt in 2012. Growth in Eskom coal from 7,1mt in 2011 to 14,5mt in 2016 have been planned for, but is dependent on the timing of the Eskom ramp-up.
2012
84,4
2013
91,1
2015
104,4
2016
110,7
2014
99,7
General Freight (mt)
ProjectionsTarget
Four-year CAGR 7,0%
increase by 12,5% to 70mt in 2012. Allocation of capacity to emerging miners.Capacity beyond 81mt will be created through alternative funding models (eg PSPs).
73,0
2013
Export coal (mt)
81,0
2016
81,0
2015
77,0
2014
70,0
2012ProjectionsTarget
Four-year CAGR 3,7%
20 006
2015
19 663
2014
19 147
2013
20 653
2016
Petroleum (ml)
18 002
2012
ProjectionsTarget
Four-year CAGR 3,5%
Looking ahead
increase by 11,7% to 51,6mt in 2012. Allocation of capacity to emerging miners.Capacity beyond 61mt will be created through alternative funding models (eg PSPs).
2012
51,6
2013
59,9
2015
60,7
2014
60,7
2016
60,7
Export iron ore (mt)
ProjectionsTarget
Four-year CAGR 4,1%
increase by 5,8% to 4,3 million TEUs in 2012. Current capacity expansion programmes are in progress at Durban, Ngqura and Cape Town container terminals which will create capacity of 6,1 million TEUs by 2016.
Containers (’000 TEUs)
2012
4 319
2013
4 527
2015
5 069
2014
4 790
2016
5 364
ProjectionsTarget
Four-year CAGR 5,6%
Transnet SOC Ltd Integrated Annual Report 201114
R21,5 billion2011 capital investment (excluding capitalised borrowing costs)
Spend on major projects for the year# R billion
(NMPP) 5,6
maintenance 2,4
maintenance 2,3
Rail and Ports 3,01,4
the coal line 0,9
the iron ore line 0,3
expansion 0,7
Total investment of
R86,8 billion over the past five
years, funded on the strength
of Transnet’s financial
position.
2011 Capital investment byOperating division# (R21,5 billion)
# Excludes capitalised borrowing costs.* Includes inter-company eliminations and other adjustments.
Freight Rail andRail Engineering R12 ,5 billion*
National Ports Authority R2,0 billion
Port Terminals R0,9 billion
Pipelines R6,1 billion
Historical capital investment# (R billion)
21,5
2011
18,4
2010
19,4
2009
15,8
2008
11,7
2007
Highlights
As a SOC, Transnet will continue to play its role to provide responsive
infrastructure that creates appropriate capacity ahead of demand in
the context of affordability, a fair return on invested capital and
supporting economic growth by partnering with the private sector.
The investment plans are aligned to the strategic objectives of the
Company and support the NGP. The capital spending in 2011 was
R21,5 billion. The rolling five-year investment plan of R110,6 billion
for the period 2012 to 2016 is considered to be appropriate to support
the planned volume growth. Other major projects have been
identified to increase capacity in excess of the existing capacity
plans, and the funding thereof will be done in conjunction with the
private sector.
3CAPITAL INVESTMENT
For further details refer to the Capital investment report.
Transnet SOC Ltd Integrated Annual Report 201116
Five-year Capital Investment Plan: 2012 – 2016#
Sishen
East L
Port Elizabeth Mossel Bay
Ngqura
Saldanha
Cape Town
2
1
3
3 3
WESTERN CAPE
NORTHERN CAPE
EASTERN CAPE
FREE STATE
NORTH WEST
GAUTENG
Capital investment in the strategic corridors
CorridorPrimary commodities transported
Five-year capital investment
R billion
Sishen to Saldanha
Capecor
Southcor
Natcor
R Baycor
Maputo Corridor
National*
* National – Unallocated corridor-wide investments.# Excludes capitalised borrowing costs.
2
6
8
5
3
4
7
1
Rail
Ports and Terminals Pipelines
Richards Bay
London
Durban
Maputo
Beitbridge
6
47
5
MPUMALANGA
LIMPOPO
KWAZULU-NATAL
Capital investment by Province
Province
Five-year capital investment
R billion
KwaZulu-Natal
Western Cape
Eastern Cape
Gauteng
Mpumalanga
Northern Cape
North West
Free State
Country wide-executed
centrally
17
13,8
12,1
7,8
14,6 14,9
9,7
12,8
5,9
13,1
5,9
20162015201420132012Target
Replacement (63%)
Expansion (37%)
Projections
Capital investment by Operating division* (R110,6 billion)
Freight Rail R63,7 billion
Rail Engineering R1,6 billion
National Ports Authority R23,2 billion
Port Terminals R5,0 billion
Pipelines R15,1 billion
Specialist Units R2,0 billion
Capital investment plan by commodity* (R110,6 billion)
General Freight R39,0 billion
Export coal R14,6 billion
Export iron ore R10,5 billion
Containers R14,7 billion
Piped products R14,3 billion
Other** R13,3 billion
Bulk R2,5 billion
Break-bulk R1,7 billion
R110,6 billionFive-year capital investment plan (excluding capitalised borrowing costs)
Key projects
PSPs – Potential future opportunities
Looking ahead
Five-year capital investment plan* (R billion)
* Excludes capitalised borrowing costs.** Other includes investments that support commodities
that may span across sectors including the above eg tugs and dredgers support all commodities transported
Transnet SOC Ltd Integrated Annual Report 201118
EBITDA (R billion)
14,4
2010
13,2
2009
12,8
2008
10,7
2007
15,8
2011Actual
15,1
2011Target
Revenue (R billion)
2007
26,9
2008
30,1
2009
33,6
2010
35,6
39,5
2011Target
2011
38,0
Actual
EBITDA margin (%)
2007
39,7
2008
42,6
2009
39,3
2010
40,538,3
2011Target
2011
41,5
Actual
2010
4,1
2007
5,5
2008
6,5
2009
3,7
2011
3,9
3,0Minimum
Cash interest cover* (times)
Actual
Highlights
2011 @
VS2010
@ 4,9%
41,1
2011
39,8
2010
37,7
2009
30,9
20082007
40,850,0
MaximumGearing* (%)
Actual
2011 @
VS2010
@ 1,3%
* Restated.
2011 @
VS2010
@ 6,6%2011 VS
2011 target 3,8%
2011 @
VS2010
@ 1,0%2011 VS
2011 target 3,2%
2011 @
VS2010
@ 9,4%2011 VS
2011 target 4,3%
2011 @
VS2010
@ 1,1%2011 VS
2011 target 1,4%
Return on average total assets (ROTA) (%)
2007
11,1
2008
11,6
2009
9,0
2010
7,7 8,0
2011Target
2011
6,6
Actual
4FINANCIAL SUSTAINABILITY
19
36,3
2016
32,1
2015
27,3
2014
23,6
2013
18,1
2012
EBITDA (R billion)
Projections
4,8
2016
3,9
2015
3,4
2014
3,3
2013
3,2
2012
3,0Minimum
Cash interest cover (times)
Projections
Revenue (R billion)
73,7
2016
67,0
2015
60,0
2014
53,3
2013
45,9
2012Projections
Looking ahead
increase in revenue is mainly due to growth in GFB volumes as well as growth in export commodities and maritime container volumes.
The 19,0% four-year CAGR is due to continued cost saving initiatives resulting in future operating expenses being kept lower than revenue increases as well as increased volumes.
the increased volumes will be achieved by executing the capital investment programme as well as operational efficiencies.
coal sectors will continue to generate significant value.
General Freight business are expected to yield positive results.
Four-year CAGR 12,6% Four-year
CAGR 19,0%
37,7
2016
42,8
2015
46,4
2014
46,8
2013
46,8
2012
MaximumGearing (%)
50,0
Projections
The gearing ratio is not expected to exceed the target ratio of 50% over the medium term.
49,3
2016
47,9
2015
45,6
2014
44,2
2013
39,6
2012
EBITDA margin (%)
Projections
Four-year CAGR 5,6%
EBITDA margin is expected to remain >40% over the medium-term.
The cash interest cover ratio remains above the target of 3,0 times and is not likely to fall below the target in the medium term.
11,3
2016
10,6
2015
9,4
2014
8,6
2013
6,5
2012
Return on average total assets(ROTA) (%)
Projections
Four-year CAGR 14,8%
Although depreciation, amortisation and derecognition is expected to increase, in line with the capital investment programme, the return on average total assets, four-year CAGR is positive due to improved asset utilisation.
Transnet SOC Ltd Integrated Annual Report 201120
Funding
The objective of the funding plan is to ensure that Transnet has adequate liquidity to meet all its operational
and capital investment funding requirements. The choice of the funding instrument to fund any capital
investment project will be subject to a thorough cost and risk assessment, including smoothing the maturity
profile to avoid undue market risk, refinancing risk and other risks.
Funding strategy
Highlights
Managing and protecting Transnet’s financial position.
Smoothing Transnet’s maturity profile to mitigate refinancing risk.
Exploring innovative and alternative forms of funding (including PSP, PPP, leasing and
project finance).
Using the Domestic Medium-Term Note (DMTN) programme for local funding.
Utilising the various diverse funding sources already established and exploring new
sources. These include Development finance institutions (DFI), export credit agency
(ECA), domestic bank loans and foreign loans.
Issuing bonds internationally under the Global Medium-Term Note (GMTN) Programme.
Inaugural drawdown of US$750 million (R5,1 billion) from the GMTN programme.
Continued tapping of the DMTN programme of R7,7 billion.
Commercial paper issue of R2,0 billion.
Bank loans and asset-backed funding of R1,9 billion.
DFIs and ECA funding of R1,7 billion.
Cost-effective funding resulting in a reduction in the weighted average cost of debt
of <10%.
4FINANCIAL SUSTAINABILITY(continued)
21
Looking ahead
Funding requirements
27,1
2016
22,5
2015
19,8
2014
17,0
2013
16,0
2012
Cash flow from operating activities including security of supply fuel levy (R billion)
Projections
6,5
2016
(3,7)
2015
(8,3)
2014
(7,2)
2013
(20,8)^
2012
Funding requirements (R billion)
Projections
(0,8)
2016
(6,8)
2015
(2,0)
2014
(1,0)
2013
(8,7)
2012
Loan redemptions (R billion)
Projections
(19,8)
2016
(19,4)
2015
(26,1)
2014
(23,2)
2013
(28,1)
2012
Cash flows from investing activities* (R billion)
Projections
*Includes capitalised borrowing costs.
To fund capital investments and loan redemptions.
Next three years R36,3 billion.
Five years R33,5 billion.
R million
Commercial paper 2 600
Domestic bonds 2 650
DFIs, ECAs, domestic and foreign loans 7 650
Total^ 12 900
PROBABLE SOURCES OF FUNDING 2012
^ The funding requirements for 2012 have decreased due to cash on hand at 31 March 2011 of R10,9 billion and increased by the pre-funding buffer of R3 billion, resulting in a net funding requirement of R12,9 billion.
Transnet SOC Ltd Integrated Annual Report 201122
Highlights
HUMAN CAPITAL
1 412 apprentices and 427 engineers in the Company.
Granting of 52 engineering bursaries for 2011.
356 engineering technicians in the internship
programme.
Representation of black (African, Coloured and
Indian) employees improved to 76% of the total
workforce.
Female and people with disabilities still remains a
significant challenge representing 20% and 0,8 %
of Transnet’s workforce, respectively.
Since 2001, Transnet more than doubled its female
employee base from 8,4% to the current 20%.
The availability of appropriate skills across the
Company remains a significant challenge.
STRATEGIC ENABLERS
The Company has embedded the internal CSDP
policies and procedures into the standard business
practices.
Transnet is recognised as the leader in CSDP
execution in South Africa.
Achieved significant CSDP contractual commitments
of up to 50% in localisation as well as significant
skills development and technology transfer.
Created and preserved over 900 jobs and aims to
increase this number significantly in the year ahead.
Some of the key CSDP benefits realised were on the
100 GE locomotives, the GE and EMD locomotive
parts agreements as well as the 32 Class 15E
locomotives.
Transnet has ramped up its BBBEE spend over the past
three years from R6,9 billion to R19,4 billion, which is
75% of total measured procurement spend compared
to a 50% target set by the Department of Trade and
Industry (DTI).
The spend for the year, which is in excess of the
targets set by the DTI, for exempted micro-
enterprises amounted to R1,9 billion, R2,8 billion for
qualifying small enterprises, R3,1 billion for black-
owned businesses and R1,4 billion for black women-
owned businesses.
Key ICT initiatives include the implementation of the
NAVIS system at Port Terminals; implementing the
Asset Stabilisation Programme across the Company,
enabling the optimisation and standardisation of
Human Capital and Payroll via the SAP HCM system.
HUMAN CAPITAL AND STRATEGIC ENABLERS
5 -6
23
Looking ahead
HUMAN CAPITAL
The growth and efficiency required over the next
five years is supported by an intensive and
accelerated skills development plan.
The key focus will be on the development of
managerial, supervisory and technical skills.
Plan to increase the number of trained artisans by
an additional 500 in 2012.
Sector-specific skills development is focused on
marine, rail and cargo with an annual internship
target of 1 500 learners.
To support the growth of the Company and the NGP
commitments, Transnet plans to increase direct jobs
by 2 562 and to create 333 331 indirect jobs in the
supplier industries in the year ahead.
Aim to improve the female employee base to 25% and
align representivity of people with disabilities to the
national averages for the economically active
population (EAP).
Continue with the implementation of appropriate
HR strategies.
Continue integrating EE strategies and interventions
with the Culture Charter.
STRATEGIC ENABLERS
Improve industrial capability building and economic
transformation in South Africa to achieve the NGP
targets.
Transnet’s Supplier Development strategy strives to
leverage off the planned infrastructure spend of
R110,6 billion over the next five years to develop new
manufacturing and service capabilities and capacity
through local content and skills development.
Transnet aims to localise its supply of imported
manufactured goods and/or services to a reasonable
level via CSDP in three key focus areas: rolling stock,
port equipment and infrastructure.
Reduce import leakage by 1% per annum.
BBBEE target to remain greater than 70%.
Implementation of a common ICT Enterprise
Architecture model that facilitates the integration
of operational processes and systems across
the Company.
Integrate planning, scheduling and forecasting
processes across the Operating divisions thereby
increasing visibility across the value chain (ports,
rail, pipeline, customers and suppliers).
Transnet SOC Ltd Integrated Annual Report 201124
Highlights
SHEQ
The total number of employee fatalities was 12 for
the year, compared to eight in the prior year.
Employee fatalities have decreased by more than
50% over the past five years.
Transnet’s DIFR deteriorated to 0,98 in the current
year compared to 0,88 in the prior year.
There has been an increase in reported noise-
induced hearing loss (NIHL) cases during the year,
which had an adverse impact on the DIFR, and is
receiving continued attention.
Continued to improve and implement measures to
prevent, minimise, rectify and manage
environmental impacts associated with Operations.
Positive response of the Department of
Environmental Affairs to the progress achieved at
the Port Elizabeth Manganese Terminal.
Following extensive analysis, the asbestos clean-up
programme began in 2010.
Developed short and medium-term plans to address
waste, air quality and water quality management.
Development of a Company-wide climate change
strategy was initiated during the year.
REGULATORY
Closer alignment with NERSA resulting in certainty
in terms of the applicable regulatory framework.
Difference with the Ports Regulator on tariff
determination for National Ports Authority due to the
lack of an approved tariff methodology.
Establishment of an interim Rail Regulator.
Statutory compliance including King III compliance
and PFMA compliance.
SHEQ AND REGULATORY7 -8
25
Looking ahead
REGULATORY
Continue to engage relevant stakeholders and the
Ports Regulator on an appropriate tariff methodology.
Continue to interact with NERSA to maintain the
professional association and to address any
regulatory challenges.
Continue role as an active participant in processes
affecting regulatory frameworks, and implement a
regulatory reporting system to establish policy
certainty and to facilitate future reforms and tariff
application processes.
SHEQ
Continued focus on safety and strive for zero
fatalities.
Target Group DIFR of <0,80 for 2012.
Minimal environmental incidents for 2012 through
audits and implementing environmental management
systems.
Implementation of safety plans and standards to
improve overall strategy.
Reduced cost of losses and reduction in number of
safety incidents.
Compliance and safety audits.
Noise surveys will continue to take place, equipment
will be reengineered where possible, and medical
check-ups and best hearing protective equipment will
be issued to those exposed.
The Board will continue its support and commitment
to the ERM framework and process by maintaining a
strong and visible oversight.
Re-certification of all ports in terms of ISO 14001.
Develop green energy suppliers through leveraging
Transnet’s procurement programme.
Reduce Transnet’s carbon footprint and electricity
consumption by 5% in 2012.
Finalise outstanding environmental assessments and
implement environmental rehabilitation plans.
Following the completion of the Transnet carbon
footprint assessment the following will be completed
in 2012:
innovation.
Transnet SOC Ltd Integrated Annual Report 201126
Number of employees 2011
49 078
Group external revenue (R billion)
30,1
2008
26,9
2007
35,6
2010
33,6
2009 2011
39,5
Target
38,0
2011Actual
Transnet is a public Company, wholly owned by the Government of the Republic of South
Africa. As the owner and operator of South Africa’s major transport infrastructure,
Transnet is responsible for ensuring that the country’s freight transportation system
operates according to benchmark standards and supports economic growth in the country.
Return on average total assets (ROTA) (%)
7,7
2010
9,0
2009
10,2
2008
11,1
2007
8,0
2011Target
2011
6,6
Actual
Group EBITDA (R billion)
13,2
2009
12,8
2008
10,7
2007
14,4
2010 2011
15,1
Target
15,8
2011Actual
Depreciation and amortisation (R billion)
4,8
2009
3,8
2008
3,0
2007
6,1
2010 2011
7,4
Target
7,2
2011Actual
Group capital investment* (R billion)
18,4
2010
19,4
2009
15,8
2008
11,7
2007
22,8
2011Target
2011
21,5
Actual
Group Disabling injury frequency rate (DIFR) (weighted)
0,88
2010
1,09
2009
1,25
2008
1,30
2007
0,85
2011Target
2011
0,98
Actual
2011 @
VS2010
@ 6,6%2011 VS
2011 target 3,8%
2011 @
VS2010
@ 18,0%2011 VS
2011 target 3,4%
2011 @
VS2010
@ 6,6%2011 VS
2011 target 1,4%
2011 @
VS2010
@ 9,4%2011 VS
2011 target 4,3%
2011 @
VS2010
@ 16,6%2011 VS
2011 target 5,8%
GROUP STRUCTURE AND PERFORMANCE HIGHLIGHTS
* Excludes capitalised borrowing costs.
27
Transnet Freight Rail (Freight Rail) is focused on
transporting bulk and containerised freight along its
approximately 20 500 kilometre rail network, of which
1 500 kilometres comprises heavy haul export lines.
During 2011, Freight Rail transported 182,1 mt of freight
for export and domestic customers. Its main business lines
are the export coal line, the export iron ore line and the
General Freight business. Refer to Operational reviews for
further details.
Transnet Rail Engineering (Rail Engineering) consists
of eight product focused business units which provide
services ranging from refurbishment, conversion and
upgrades, to the manufacturing of rail-related rolling
stock. Whilst this Operating division is largely focused
on supporting Freight Rail, it is also focusing on growing
its external customer base. Refer to Operational reviews
for further details.
Transnet National Ports Authority (National Ports
Authority) is responsible for the safe, efficient and
effective functioning of the national ports system,
which it manages in a landlord capacity.
The National Ports Authority is also a provider of port
infrastructure and marine services at all commercial
ports in South Africa. Refer to Operational reviews for
further details.
Transnet Port Terminals (Port Terminals) owns and
operates 16 cargo terminal operations situated across
seven South African ports. It provides cargo handling
services for the container, bulk, automotive and break-
bulk sectors. Refer to Operational reviews for further
details.
Transnet Pipelines (Pipelines) transports a range
of petroleum products and gas through 3 000 kilometres
of underground pipelines traversing five provinces,
thereby ensuring the security of supply of petroleum
products to the inland market, especially Gauteng.
Pipelines is gearing itself for the full commissioning
of the New Multi-Product Pipeline (24-inch trunk line)
by December 2013. Refer to Operational reviews for
further details.
Overview 2011 Operating division highlights^*
RAIL ENGINEERING
NATIONAL PORTS AUTHORITY
PORT TERMINALS
PIPELINES
FREIGHT RAIL
58,8% external
revenue
51,7% EBITDA
58,3% capital
investment
1,7% external
revenue
7,3% EBITDA
2,5% capital
investment
19,3% external
revenue
37,2% EBITDA
9,4% capital
investment
16,7% external
revenue
13,9% EBITDA
4,0% capital
investment
3,0% external
revenue
4,4% EBITDA
28,2% capital
investment
In order to achieve Transnet’s mission and vision, the Company is structured as follows#:
^ Operating division highlights as a % of Transnet.* Excludes intercompany.# Supported by Specialist Units.
Transnet SOC Ltd Integrated Annual Report 201128
PRODUCTIVITY AND EFFICIENCY
lengths to harness haulage capability. By year-end, Freight Rail was operating several larger trains on a weekly basis, including anaconda container trains, manganese trains and heavier coal trains.
increased from 7 400 to 7 900.
locomotives and the implementation of the Concept 39 train plan continue to contribute to improvements in locomotive efficiencies and wagon turnaround time on the export iron ore line.
VOLUME GROWTH
its highest ever annual volumes of 627 825 TEUs during the year.
increased by 13,2% compared to 2010.
iron ore of: 1,024mt for the week ending 5 September 2010; 1,060mt for the week ending 26 September 2010; 1,070mt for the week ending 24 October 2010 and 1,094mt for the week ending
volumes compared to 2010.
CAPITAL INVESTMENT
R12,5 billion.
Model C30ACi locomotives from General Electric.
locomotives of the 100 new Class 43 diesel locomotives at its plants in the USA. The remaining 90 locomotives will be assembled by Rail Engineering at its manufacturing facility in Koedoespoort.
FINANCIAL SUSTAINABILITY
to R22,3 billion, while operating expenses were up 7,7% to R14,5 billion, driven mainly by 16,0% increase in maintenance and materials costs and a 25% increase in electricity tariffs.
of 1,6mt as well as a change in the commodity mix to higher revenue per unit commodities resulted in a 12,3% increase in General Freight revenue.
HUMAN CAPITAL
in Training’ programme contracted for an 18 – 24 month period, 36 were successfully placed in permanent positions.
programme was successfully launched and implemented.
personnel costs was 2,2% in 2011.
STRATEGIC ENABLERS AND SHEQ
12% due to various initiatives being implemented.
have reduced by 25% due to the
upgrades.
damage to key railway assets and injuries.
29,8% compared to the prior year.
REGULATORY
a transport economics analysis of South Africa’s freight rail challenges and will propose an optimal configuration of the freight rail system to facilitate rail reforms.
0,94
2010
1,3
2009
1,3
2008
0,94
2011Target
Disabling injury frequency rate (DIFR)
1,22
2011Actual
7,4
2010
5,7
2009
5,1
2008
8,1
2011Target
EBITDA (R billion)
8 ,1
2011Actual
23,6
Target20112010
20,620,8
2009
16,0
2008
External revenue (R billion)
22,3
2011Actual
9,7
2010
8,6
2009
9,2
2008
11,6
2011Target
Capital investment* (R billion)
12,5
2011Actual
Highlights
Number of employees 2011
23 665
2011 @
VS2010
@ 8,3%
2011 @
VS2010
@ 10,1%
2011 @
VS2010
@ 29,0%
FREIGHT RAIL
* Excludes capitalised borrowing costs.
29
0,73
2016
0,74
2015
0,77
2014
0,82
2013
0,88
2012ProjectionsTarget
Disabling injury frequency rate (DIFR)
20,4
2016
18,0
2015
15,6
2014
13,0
2013
10,8
2012ProjectionsTarget
EBITDA (R billion)
44,9
2016
40,6
2015
36,4
2014
31 ,8
2013
27,5
2012ProjectionsTarget
External revenue (R billion)
10,6
2016
11,6
2015
13,3
2014
13,5
2013
14,7
2012ProjectionsTarget
Capital investment* (R billion)
Looking ahead
PRODUCTIVITY AND EFFICIENCY
capital and maintenance programme implementation, operational processes and improved operational discipline in execution will all contribute to better asset utilisation and operational efficiencies.
implementation of customer-based resources, infrastructure and execution models to improve service reliability and efficiencies in asset utilisation.
on the export coal line is not yielding the expected benefits. A 10% improvement is required to achieve the expected 58-hour turnaround time.
departures and arrivals.
increased infrastructure reliability.
VOLUME GROWTH
approximately 206mt of export and domestic commodities in 2012, with anticipated volumes of 252mt by 2016.
increase, with a focus on exports through Maputo and other cross-border rail traffic.
CAPITAL INVESTMENT
Investment Programme to address operational constraints, improve allocation to specific growth market segments, and to create capacity for emerging miners.
for 2012 amounts to R14,7 billion and R63,7 billion over the next five years (excluding capitalised borrowing costs).
FINANCIAL SUSTAINABILITY
is R27,5 billion.
due to the expected volume growth and tariff increases in line with contractual agreements.
HUMAN CAPITAL
grow to approximately 25 900 in 2012 and 28 920 by 2016. This growth in employees is for train drivers, operational, technical and engineering positions, in line with NGP commitments.
spent per annum on training, development of employees and building leadership competence.
STRATEGIC ENABLERS AND SHEQ
country-wide asbestos and hydrocarbon pollution elimination programmes will reduce pollution and liability exposures.
REGULATORY
(DoT) on numerous initiatives to establish policy certainty and to facilitate rail reform.
Four-year CAGR 13,0%
Four-year CAGR 17,2%
Four-year CAGR 7,8%
Number of employees 2012
25 900
* Excludes capitalised borrowing costs.
Transnet SOC Ltd Integrated Annual Report 201130
0,7
2010
0,8
2009
1,2
2008
1,1
2011Target
EBITDA (R billion)
1,2
2011Actual
1,3
2010
1,4
2009
1,1
2008
1,3
2011Target
External revenue (R billion)
0,7
2011Actual
Highlights
PRODUCTIVITY AND EFFICIENCY
successfully upgraded by Rail Engineering.
award for the transformation of logistics, yielding an inventory reduction of R800 million in 18 months.
availability by 0,5%.
whilst locomotive reliability deteriorated by 15,4% as a result of an ageing fleet.
VOLUME GROWTH
delivering all in record time.
the 100 new Class 43 General Electric diesel locomotives for Freight Rail, resulting in the largest CSDP agreement being signed in South Africa to date.
coach customers slowed volume growth.
CAPITAL INVESTMENT
R532 million.
in the planned completion of key projects due to unforeseen circumstances such as theft and adverse weather conditions.
successfully launched during the year, with an investment of R27 million in equipment to facilitate prompt reaction for the clearing of derailments.
FINANCIAL SUSTAINABILITY
R9,3 billion.
mainly due to programmes in support of Freight Rail’s fleet expansion plans and volume growth.
R661 million mainly due to a lower number of PRASA coach upgrades performed.
HUMAN CAPITAL
personnel costs was 3,5% in 2011.
labour interventions during the year as part of the ‘Relationship By Objectives’ (RBO) joint initiative between management and labour.
being implemented throughout all the regions within Rail Engineering.
STRATEGIC ENABLERS, SHEQ AND REGULATORY
year, enabling the industry as a whole to improve skills levels and to develop new enterprises to manufacture components.
shortages of critical components challenged the sustained availability of rolling stock.
rolled out to eliminate waste and variation in all aspects of operations.
year without injuries.
14,8% compared to the prior year.
Disabling injury frequency rate (DIFR)
2008
1,31
2009
1,15
2010
0,81
Target2011
0,76
2011
0,93
Actual
0,4
2010
0,6
2009
0,8
2008
0,6
2011Target
Capital investment* (R billion)
0,5
2011Actual
Number of employees 2011
13 001
2011 @
VS2010
@ 48,4%
2011 @
VS2010
@ 71,8%
2011 @
VS2010
@ 41,5%
RAIL ENGINEERING
* Excludes capitalised borrowing costs.
31
0,67
2016
0,68
2015
0,71
2014
0,75
2013
0,80
2012Target
Disabling injury frequency rate (DIFR)
Projections
1,2
2016
1,3
2015
1,2
2014
1,1
2013
1,3
2012ProjectionsTarget
EBITDA (R billion)
1,5
2016
1,5
2015
1,5
2014
1,5
2013
1,0
2012ProjectionsTarget
External revenue (R billion)
0,4
2012
0,2
2016
0,3
2015
0,3
2014
0,4
2013ProjectionsTarget
Capital investment* (R billion)
Looking ahead
PRODUCTIVITY AND EFFICIENCY
improve fleet availability and reliability.
continue to reduce turnaround times and improve quality.
reliability to benchmark levels to support Freight Rail’s planned volume growth.
VOLUME GROWTH
growth.
CAPITAL INVESTMENT
R445 million and total capital expenditure over the five-year period amounts to R1,6 billion.
investment in machinery, equipment and furniture at R279 million and investment in buildings and structures at R166 million.
FINANCIAL SUSTAINABILITY
strengthen partnerships with OEMs with the aim of enhancing existing skills and knowledge and creating new market opportunities.
continent with the view to increase external revenue.
to increase by 12,3% from R9,3 billion in 2011 to R10,5 billion in 2012.
volume growth.
HUMAN CAPITAL
skills.
Six Sigma competencies.
creation to meet the NGP commitments.
STRATEGIC ENABLERS, SHEQ AND REGULATORY
supported by providing locomotive upgrade and maintenance services for the branch lines.
fatalities as well as no major environmental incidents.
lease activities.
Four-year CAGR 11,0%
Four-year CAGR 2,0%
Four-year CAGR 15,2%
Number of employees 2012
13 190
* Excludes capitalised borrowing costs.
Transnet SOC Ltd Integrated Annual Report 201132
2011
1,24
2010
1,22
2009
2,17
2008
1,0
2011Target
Disabling injury frequency rate (DIFR)
0,80
Actual
5,6
2010
5,3
2009
5,2
2008
5,6
2011Target
EBITDA (R billion)
5,9
2011Actual
6,8
2010
6,6
2009
6 ,4
2008
7,2
2011Target
External revenue (R billion)
7,3
2011Actual
3,2
2010
4,2
2009
2,7
2008
3,4
2011Target
Capital investment* (R billion)
2,0
2011Actual
Highlights
PRODUCTIVITY AND EFFICIENCY
and berthing services) were significantly reduced.
towage was implemented in Cape Town, Richards Bay and Durban.
initiatives were implemented, including a dual loading process at the Port of Cape Town.
VOLUME GROWTH
to 2010.
CAPITAL INVESTMENT 3 Trailing Suction Hopper
Dredger was brought into operations, enhancing depth management capabilities within the ports.
entrance channel at the Port of Durban was completed during the year.
Terminal ahead of demand has allowed the Port to attract new business.
FINANCIAL SUSTAINABILITY
R3,6 billion compared to 2010 mainly due to improved container volume growth.
42,6% annually to R472 million due to increased automotive imports and export volumes.
compared to the prior year due to increased global demand for iron ore.
HUMAN CAPITAL
appointed, addressing the skills shortage.
in 2010 to 5,4% in 2011.
STRATEGIC ENABLERS AND SHEQ
improvement from 1,24 in the prior year.
incidents at the ports during the year.
REGULATORY
from the Ports Regulator, and was awarded a 4,49% increase.
determination can be explained by the lack of an agreed tariff methodology.
Number of employees 2011
3 535
2011 @
VS2010
@ 7,4%
2011 @
VS2010
@ 5,3%
2011 @
VS2010
@ 37,1%
NATIONAL PORTS AUTHORITY
* Excludes capitalised borrowing costs.
33
0,74
2016
0,75
2015
0,76
2014
0,77
2013
0,80
2012ProjectionsTarget
Disabling injury frequency rate (DIFR)
10,1
2016
9,2
2015
8,3
2014
7,8
2013
7,0
2012ProjectionsTarget
EBITDA (R billion)
12,3
2016
11,3
2015
10,2
2014
9 ,3
2013
8 ,4
2012ProjectionsTarget
External revenue (R billion)
5,3
2016
5,2
2015
7,0
2014
3,3
2013
2,4
2012ProjectionsTarget
Capital investment* (R billion)
Looking ahead
PRODUCTIVITY AND EFFICIENCY
include achieving 2 000 coal tons per ship turnaround time (STAT hour) at Richards Bay; and 3 078 iron ore tons per STAT hour at Saldanha.
following TEUs per STAT hour: Durban (40), Port Elizabeth (36), Ngqura (40) and Cape Town (27).
ports and the current towage (tug) capacity continues to challenge the ability to meet demand.
on improving the overall operational efficiency of marine resources ie towage, pilotage, berthing and vessel traffic services.
VOLUME GROWTH
investment programme supports and drives volume growth.
expected to increase by 5,8%; dry bulk sector is expected to achieve growth of 4,7% and break-bulk is expected to increase by 18,4%.
CAPITAL INVESTMENT
R2,4 billion (excluding borrowing costs) and cumulatively R23,2 billion over the next five years.
management programme to ensure the timeous replacement of marine craft.
FINANCIAL SUSTAINABILITY
opportunities for volume growth.
an increase of 14,2% compared to 2011.
the tariff determination methodology results in significant cash flow risk for National Ports Authority.
HUMAN CAPITAL
Ports’, will continue to review its capacity and programmes to ensure quality delivery of skills.
infrastructure skills in the job market, as well as the legislative prescribed time requirements to qualify as trained marine related resources, continues to be a challenge.
STRATEGIC ENABLERS AND SHEQ
domestic market to attract volumes from BEE/SMME customers and new market entrants in key sectors through incentives and trade facilitation for terminal accessibility.
reduce safety incidents to less than 27.
by March 2012 and working towards all ports achieving compliance in terms of acceptable environmental standards.
REGULATORY
embark on the deemed licence conversion process and active engagement with the Ports Regulator and Port Consultative Committees.
and the Ports Regulator on an appropriate tariff methodology.
Four-year CAGR 10,1%
Four-year CAGR 9,8%
Four-year CAGR 21,5%
Number of employees 2012
3 748
* Excludes capitalised borrowing costs.
Transnet SOC Ltd Integrated Annual Report 201134
0,71
2010
0,85
2009
0,93
2008
0,69
2011Target
Disabling injury frequency rate (DIFR)
0,51
2011Actual
1,6
2010
1,7
2009
1,8
2008
1,8
2011Target
EBITDA (R billion)
2,2
2011Actual
5,2
2010
5,0
2009
4,8
2008
5,7
2011Target
External revenue (R billion)
6,4
2011Actual
2011
2,4
2010
3,1
2009
2,0
2008
1,3
2011Target
Capital investment* (R billion)
0,9
Actual
Highlights
PRODUCTIVITY AND EFFICIENCY
per gross crane hour (GCH) performance at the Durban Container Terminal (DCT) – Pier 1. The terminal has sustained a rolling average GCH of 29,5 since December 2010.
achieved an annual average GCH of 25 for 2011 against a target of 24, despite the terminal being under construction and operating a dual operation of both straddles and rubber tyred gantry cranes (RTGs) for most of the year.
year being only 23, the premium berths have improved significantly during the latter half of 2011 due to productivity improvement initiatives.
VOLUME GROWTH
from the prior year to 4 016 564 TEUs.
Richards Bay were lower than expected due to a lack of rail capacity and tippler constraints.
CAPITAL INVESTMENT
R866 million.
year included R131 million for the Durban Container Terminal reengineering project, R253 million for the Cape Town Container Terminal, and R79 million for the Port and Rail Phase 1 C expansion in Saldanha.
FINANCIAL SUSTAINABILITY
23,2% to R6,4 billion.
of 35,0% compared to the prior year of R1,6 billion.
HUMAN CAPITAL
11,3% due to efficiency improvements and the filling of only critical positions.
skills training (mainly mentorship programmes) in 2011, which translates to 3,7% of personnel costs.
personnel costs have increased from 15,1% to 15,9%.
STRATEGIC ENABLERS AND SHEQ
developed and implemented with planned maintenance reflecting 95% compliance.
meantime to repair (MTTR) have demonstrated corresponding improvements.
0,71 in 2010.
compared to 2010 and was higher than target.
employee fatality at the Durban RoRo and Agri Terminal.
REGULATORY
plan and minimum control framework for the National Ports Act.
Number of employees 2011
5 867
2011 @
VS2010
@ 23,2%
2011 @
VS2010
@ 35,0%
2011 @
VS2010
@ 63,4%
PORT TERMINALS
* Excludes capitalised borrowing costs.
35
0,51
2016
0,52
2015
0,54
2014
0,57
2013
0,62
2012ProjectionsTarget
Disabling injury frequency rate (DIFR)
4,6
2016
4,0
2015
3,3
2014
2,7
2013
2,2
2012ProjectionsTarget
EBITDA (R billion)
10,5
2016
9,5
2015
8,6
2014
7,6
2013
6,7
2012ProjectionsTarget
External revenue (R billion)
0,9
2016
0,7
2015
0,7
2014
1,0
2013
1,7
2012ProjectionsTarget
Capital investment* (R billion)
Looking ahead
PRODUCTIVITY AND EFFICIENCY
Maintenance Engineers will help to address challenges on equipment reliability.
forward due to interventions and will unlock both capacity and volumes, which will drive increased revenues.
currently contribute to a loss of between four and seven GCH per month and are now being managed on a daily basis to ensure that this loss is minimised.
VOLUME GROWTH
Ngqura Container Terminal (NCT) will increase capacity to 800 000 TEUs based on design assumptions.
continue to be affected by a lack of rail capacity and the poor reliability of current operational equipment at the port.
CAPITAL INVESTMENT
will be invested to sustain existing operations and the remaining R1 billion (19%) will be invested to increase capacity to achieve growth initiatives over the next five years.
Saldanha Iron Ore Terminal to increase the capacity of the plant to 60,7mt.
FINANCIAL SUSTAINABILITY
opportunities, strategic partnerships and pursuing corridor optimisation strategies.
capacity on the Richards Bay corridor.
by negotiating contractual agreements with potential new shipping lines.
HUMAN CAPITAL
and ‘operator’ mentorship programmes in 2012.
Operations in line with operational needs.
STRATEGIC ENABLERS AND SHEQ
Wharf MPT.
management partner to assist in the management and operation of the Cape Town Cold Storage Facility.
Improvement Plan’ and utilise the ‘Golden Safety League’ to improve overall safety controls.
continual improvement to minimise systemic non-conformances.
remain a challenge, especially in Richards Bay and Port Elizabeth, with specific reference to dust emissions, soil and groundwater contamination.
REGULATORY
current legislation of the National Commercial Ports Policy and the National Ports Act is that it does not adequately address the role of a SOC in a developmental state.
relevant stakeholders on the National Commercial Ports Policy to achieve alignment with Port Terminals’ strategy.
Four-year CAGR 11,8%
Four-year CAGR 20,4%
Four-year CAGR 13,8%
Number of employees 2012
6 292
* Excludes capitalised borrowing costs.
Transnet SOC Ltd Integrated Annual Report 201136
Highlights
PRODUCTIVITY AND EFFICIENCY
economy by ensuring security of fuel supply to the inland market.
volumes through optimally managing the capacity usage of the pipeline system.
interruptions.
extended to ensure that the inland market is supplied.
VOLUME GROWTH
and collaboration with Freight Rail ensured that all 2010 FIFA Soccer World Cup targets were met and that the OR Tambo International Airport always had jet fuel available.
transported in a capacity constrained pipeline network.
CAPITAL INVESTMENT
telemechanical upgrade projects.
of the NMPP into the network was successful. Park-Alrode and Alrode-Langlaagte sections of the pipeline were commissioned by 31 May 2011.
FINANCIAL SUSTAINABILITY
award for the best internal financial control environment in Transnet for the year.
increased by 5,5% from R1,3 billion to R1,4 billion.
mitigate the lower than expected tariff increase in 2011.
HUMAN CAPITAL
1,2% against a target of 1,5%.
4,0% compared to a target of 6,0%.
a challenge.
STRATEGIC ENABLERS
enhanced to ensure that Pipelines continues to meet its obligation in terms of security of supply.
SHEQ
the year, three of which resulted from unauthorised activities by third parties in the servitudes causing damage to the pipelines.
to the prior year.
REGULATORY
R4,5 billion over three years, commencing in 2011, for the ‘security of supply’ requirement of the NMPP.
tariff setting, which comprises an integrated (bundled) system application.
0,54
2010
1,44
2009
0,88
2008
0,95
2011Target
Disabling injury frequency rate (DIFR)
0,33
2011Actual
0,7
2010
1 ,0
2009
1,0
2008
0,9
2011Target
EBITDA (R billion)
0,7
2011Actual
1,2
2010
1,5
2009
1,3
2008
1,5
2011Target
External revenue (R billion)
1,1
2011Actual
3,1
2010
2,8
2009
0,9
2008
5,4
2011Target
Capital investment* (R billion)
6 ,1
2011Actual
Number of employees 2011
567
2011 @
VS2010
@ 3,6%
2011 @
VS2010
@ 0,9%
2011 @
VS2010
@ 98,1%
PIPELINES
* Excludes capitalised borrowing costs.
37
Looking ahead
PRODUCTIVITY AND EFFICIENCY
the reduction of “lost time”, thereby ensuring that the pipeline is operated with minimum lost time and improved volume throughput.
VOLUME GROWTH l/w
share from road in the 4th quarter of 2012.
NMPP into operation as and when planned.
CAPITAL INVESTMENT
line of the NMPP and ensure successful commissioning.
– The estimated cost of the NMPP has increased from R15,5 billion to R23,4 billion due to increases in the cost of the terminals, pumpstations and project management. The increase is related to additional scope, schedule changes and higher than initially budgeted for costs.
– The NMPP construction is progressing according to the revised plan with operationalisation of the
Completion of the entire project is still expected to be by December 2013.
maintenance plan to mitigate risks and address findings of the “special intelligent pigging” survey.
requirements.
FINANCIAL SUSTAINABILITY
application and the final regulatory decision for future tariffs.
cost-reduction initiatives.
HUMAN CAPITAL
personnel costs is expected at 7,0% in 2012.
and improved retention of key skills by March 2012.
STRATEGIC ENABLERS
requirements of the NMPP.
and guide operational skills requirements.
SHEQ
management system (EMS) for all sites.
associated with the handling of hazardous products and will ensure that operational practices are enhanced to reduce environmental impacts.
reduction in the number of safety incidents to less than 23 in 2012.
REGULATORY
maintain the professional association and to address any regulatory challenges.
processes affecting regulatory frameworks, and implement a regulatory reporting system to facilitate future tariff application processes.
0,78
2016
0,83
2015
0,95
2014
0,95
2013
0,80
2012ProjectionsTarget
Disabling injury frequency rate (DIFR)
3,2
2016
2,9
2015
2,1
2014
1,9
2013
1,1
2012ProjectionsTarget
EBITDA (R billion)
4,1
2016
3,8
2015
3,0
2014
2,7
2013
1,8
2012ProjectionsTarget
External revenue# (R billion)
1,6
2016
0,7
2015
2,9
2014
3,8
2013
6,1
2012ProjectionsTarget
Capital investment* (R billion)
Four-year CAGR 23,2%
Four-year CAGR 30,1%
Four-year CAGR 28,9%
Number of employees 2012
650
# Includes clawback and levy.
* Excludes capitalised borrowing costs.
Board of Directors
3
4
1Mr ME Mkwanazi Chairman
(Non-executive)
Date of appointment 2010
QualificationsBSc (Mathematics and Applied Mathematics) and BSc (Electrical Engineering).
Area of expertiseCorporate governance, engineering and strategy.
Other directorships and trusteeshipsBefore the Wind Investments 53; Marble Gold 237 (Pty) Ltd;
Mkwanazi Investment Holdings (Pty) Ltd; Saatchi and Saatchi (Pty) Ltd; Ukhamba Bricks and Quarry (Pty) Ltd; Born Free Investments 402; Hulamin Ltd; Stefanutti & Stocks Holdings; and Shamsko Projects.
2Mr B Molefe Group Chief Executive
Date of appointment 2011
QualificationsMaster of Business Leadership; Postgraduate Diploma in Economics; and BCom (Accounting and Economics).
Area of expertiseFinance, management and leadership.
Other directorships and trusteeships
Karibu Holdings (Pty) Ltd; Karibu Capital (Pty) Ltd; Karibu Real Estate Investments (Pty) Ltd; and Lion of Africa Fund Managers.
3Mr A SinghActing Chief Financial
Officer
Date of appointment 2009
QualificationsBAcc and CA(SA).
Area of expertiseFinancial and business.
Other directorships and trusteeshipsComazar (Pty) Ltd; Crosskeys Security Services (Pty) Ltd; Owner-Driver Management (Pty) Ltd; Protekon (Pty) Ltd; Freight Logistics International; Transhold Properties (Pty) Ltd; and Transnet Retirement Fund.
4Mr MA FanucchiNon-executive
Date of appointment 2010
QualificationsMSc Engineering Management; GDE; and BSc Engineering (Mech) Industrial.
Area of expertiseLogistics, supply chain management and business management.
5Mr HD GazendamNon-executive
Date of appointment 2010
QualificationsBA; BProc; Dip Labour Relations; AEDP; EDP; and UCLA.
Area of expertiseLabour relations, HR management, remuneration and corporate governance.
Other directorships and trusteeshipsToyota SA (retired from Board in 2009 after 15 years); and currently serving as Trustee on several pension/provident funds, trusts and foundations. Transnet Second Defined Benefit Fund.
6Ms NBP GcabaNon-executive
Date of appointment 2004
Qualifications
Area of expertiseLegal and corporate governance.
Other directorships and trusteeshipsTransnet Retirement Fund Property Trust; Transnet Second Defined Benefit Fund; and Partnership – Spoor & Fisher Attorneys.
Transnet SOC Ltd Integrated Annual Report 201138
1 2
5
6 78
9
7Mr MP MalunganiNon-executive
Date of appointment 2010
QualificationsBCom; Advanced Management Programme and Leadership Development Programme.
Area of expertiseEntrepreneurship, business strategy, corporate governance and investment banking.
Other directorships and trusteeshipsPeu Group (Pty) Ltd;Phumelela Gaming and Leisure Ltd;Asili Investments (Pty) Ltd;Coral Lagoon Investments 225 (Pty) Ltd;Ematini Game Lodges (Pty) Ltd;Dipcivils (Pty) Ltd;Dipcivils Properties (Pty) Ltd;Dip Plant (Pty) Ltd;Dip Developments (Pty) Ltd;Great North Building Supplies;Intsika Enablement Trust;Intsika Investment Trust;Investec Ltd;Investec Bank Ltd;Investec Asset Management Holdings (Pty) Ltd;Investec Plc;Investec Security Purchase Share Scheme 2003;
Investments (Pty) Ltd;
Investments Trust;Klaprops 80 (Pty) Ltd;Klaprops 81 (Pty) Ltd;Klaprops 82 (Pty) Ltd;
Klaprops 83 (Pty) Ltd;Klatrade 452 (Pty) Ltd;Klatrade 200022 (Pty) Ltd;Lazarus Car Hire (Pty) Ltd;Lazarus Motor Company (Pty) Ltd;Malazvis Property Holdings (Pty) Ltd;Malungani Building Supplies CC;Malungani Family TrustMalungani Sanitary & Hardware Supplies CCMangeke Estate (Pty) Ltd;Masana Networking (Pty) Ltd;Masana Technologies (Pty) Ltd;Masana Telecommunications (Pty) Ltd;Matini Game Lodge (Pty) Ltd;Mpindo (Pty) Ltd;Ndzhakeni Investments (Pty) Ltd;New Adventure Shelf 165 (Pty) Ltd;Nkanyi Game Lodge (Pty) Ltd;Nkanyi Private Game Reserve (Pty) Ltd;Northern Diamond News Group (Pty) Ltd;Nungu Game Lodge (Pty) Ltd;
Nungu Private Game Reserve (Pty) Ltd;Phumelela Gaming and Leisure Ltd;Plot 93 Roodekrans (Pty) Ltd;Portfolio Business Television Productions (Pty) Ltd;PPC SBP Consortium
Pretoria Portland Cement Company Ltd;Pytprops 180 (Pty) Ltd;Stabilid Holdings (Pty) Ltd;Southern Lights Investments 2709 (Pty) Ltd;Suddaby Investments (Pty) Ltd;Tiyani Property Consortium (Pty) Ltd;Umlimi Holdings (Pty) Ltd;
(Pty) Ltd;
Energy (Pty) Ltd;
Ltd; andW P Malungani and Sons Management Services (Pty) Ltd.
8Mr BD MkhwanaziNon-executive
Date of appointment 2010
QualificationsBachelor of Administration; Post-graduate Diploma in Marketing; Programme for Management Development; Graduate Diploma in Company Direction; Certificate in Managing Finance and Strategic Management and MBA.
Area of expertiseBusiness, finance, strategy, human resource development and corporate governance.
Other directorships and trusteeshipsSouthern African Shipyards (Pty) Ltd;Hlahlindlela Investments (Pty) Ltd;Directorship/TrusteeshipUnigas (Pty) Ltd; andOceanmasters (Pty) Ltd.
9Ms T MnyakaNon-executive
Date of appointment 2010
QualificationsBachelor of Social Science; Masters in Town and Regional Planning; Diploma in Project Management; Certificate in Project Management; and Project Leadership Certificate.
Area of expertiseEconomic planning and development, international trade and business consulting.
Other directorships and trusteeshipsBlack Management Forum National; Deputy President; Business Unity South Africa (BUSA) – Manco member (Board); Durban Chamber of Commerce
President and Board member; South African Chamber of Commerce and Industries – Council member; BMF – Investment – Board
Advisory Commission – member.
39
1011
1213
10Mr MP Moyo Non-executive
Date of appointment 2008
QualificationsBAcc (Hons); CA(SA); CA
Diploma in Tax Law; and Advanced Management Programme.
Area of expertiseFinancial/business.
Other directorships and trusteeships
Limited (Chairman); Transnet Second Defined Benefit Fund (Chairman); Amabubesi Financial Services Group (Pty) Ltd;
Amabubesi Financial Services Holdings (Pty) Ltd; Amabubesi Capital (Pty) Ltd; Amabubesi Capital Technologies (Pty) Ltd; Amabubesi Consulting Services (Pty) Ltd; Amabubesi Health Care (Pty) Ltd; Amabubesi Health Services (Pty) Ltd; Amabubesi Investments (Pty) Ltd; Amabubesi Property Holdings (Pty) Ltd; Bulawayo Electrical Supplies (Pty) Ltd; Clorpique 149 (Pty) Ltd; Corridor Infrastructure Development Holdings; Dartingo Trading 161 (Pty) Ltd; Lexshell 713 Investments (Pty) Ltd;
Liberty Group Limited, Liberty Holdings Limited; Mtha-We-Mpumelelo Investments; Pinnacle Technology Holdings; Plexus Fundamental
STS Trust; Utafutaji Trading 36 (Pty) Ltd; and Worldwide Capital Limited.
11Ms NR Ntshingila Non-executive
Date of appointment 2006
QualificationsBA; MBA; andDiploma in Advertising.
Area of expertiseMarketing.
Other directorships and trusteeshipsGolden Dividend 456 (Pty) Ltd; Kantar South Africa (Pty) Ltd; Ntinta Investment; Ogilvy South Africa (Chief Executive Officer); Old Mutual Life Assurance Company South Africa) Ltd; Old Mutual Life Holdings (South Africa) Ltd; and PWC CSI Board.
12Ms N Moola Non-executive
Date of appointment 2010
QualificationsBachelor of Business Science; CFA Charterholder.
Area of expertiseEconomics and strategy.
Other directorships and trusteeshipsMercedes-Benz South Africa.
40 Transnet SOC Ltd Integrated Annual Report 2011
Board of Directors (continued)
14
1516
17
13Mr IM Sharma Non-executive
Date of appointment 2010
QualificationsBSc (Hons).
Area of expertiseStrategy, business, international trade, management and global economy.
Other directorships and trusteeshipsGMT Concepts; Blackstone Resources and Nulance Investments.
14Mr IB Skosana Non-executive
Date of appointment 2010
QualificationsBCom, BCompt (Hons); CA(SA); Certificate in the Theory of Accountancy (CTA); and Advanced Management Programme.
Area of expertiseLeadership, strategy and finance.
Other directorships and trusteeshipsAbscido Investments (Pty) Ltd;Bond Choice (Pty) Ltd;Cloudberry Investments 8 (Pty) Ltd;CQS Performance Solutions (Pty) Ltd;CQS Technology Holdings (Pty) Ltd;FDB Eiendoms-beleggings cc; Kapela Bond Investments (Pty) Limited;Pradella Investments (Pty) Ltd;Tascali Investments 5 (Pty) Ltd;TNS Research South Africa (Pty) Ltd; andTNS Research Surveys (Pty) Ltd.
15Ms E TshabalalaNon-executive
Date of appointment 2010
QualificationsBCom; International Licentiate Diploma of Banking; and Postgraduate Diploma in Labour Relations.
Area of expertiseBusiness and strategy
Other directorships and trusteeshipsPresidential Advisory Council on BEE (Council Member); Port Shepstone Harbour Development Company (Chairperson of the Board); African Academy for CADD training (Trustee); and Moral Regeneration Movement (Trustee).
16Ms DLJ Tshepe Non-executive
Date of appointment 2010
QualificationsBProc; LLB; and LLM.
Area of expertiseLegal and corporate governance.
Other directorships and trusteeshipsCheadle Thompson & Haysom Inc; Cheadle Thompson & Haysom Legal Administration Trust; Boardroom Alliance (Pty) Ltd; Boardroom Alliance Black Equity Trust; and National Children’s Rights Committee.
17Ms ANC CebaGroup Company
Secretary
Date of appointment 2009
QualificationsBProc; and LLB
Other directorships and trusteeshipsPremier Soccer League (PSL) – Alternate Chairman of the Disciplinary Committee and member of the PSL Audit and Risk Committee.
41
12 3
4 5 67
1 Mr M Gregg-Macdonald
Group Executive:
Planning and Monitoring
Year joined Transnet 2001
QualificationsBCompt (Hons) and CA(SA).
Area of expertiseFinancial and general management.
2Ms V Dunjwa Chief Risk Officer
Year joined Transnet 1998
QualificationsMSc (Engineering); Graduate Diploma Civil Engineering; BA (Chemistry), and Certificate:Executive Women Development Programme.
Area of expertiseEnterprise risk management.
3Mr SI Gama Chief Executive:
Transnet Freight Rail
Year joined Transnet 1994
QualificationsBCom; Banking Diploma; Advanced Executive Programme; and Postgraduate Diploma in Company Direction.
Area of expertiseBusiness leadership, finance, ports, railways, transformational/turnaround strategy.
Other directorships and trusteeships
listed; Mafumbuka Investment Holdings (Pty) Ltd; and Centre for Logistics and Transport, University
(non-profit).
4Mr B Molefe Group Chief Executive
Year joined Transnet 2011
Qualifications Master of Business Leadership; Postgraduate Diploma in Economics; and BCom (Accounting and Economics).
Area of expertiseFinance, management and leadership.
Other directorships and trusteeships
(Trustee); Karibu Holdings (Pty) Ltd;Karibu Capital (Pty) Ltd; Karibu Real Estate Investments (Pty) Ltd; and Lion of Africa Fund Managers.
5Mr T Morwe Chief Executive:
Transnet National Ports
Authority
Year joined Transnet 1997
Qualifications BA Economics; Advanced Programme for Chief Executive Officers; and Executive Programme in Logistics: Transportation Management.
Area of expertise Transport and logistics.
Other directorships and trusteeships
and Investment; Commercial Cold Storage (Pty) Ltd; and Bulk Connections (previously Durban Coal Terminal).
6Mr CA Möller Chief Executive:
Transnet Pipelines
Year joined Transnet 1975
QualificationsCivil Engineering (BSc, BEng) and BCom (Hons).
Area of expertise Engineering and pipeline operations.
42 Transnet SOC Ltd Integrated Annual Report 2011
Group Executive Committee
8
9
10
11
12
13
7Ms M Moses Group Executive:
Transnet Capital
Projects
Year joined Transnet 2005
QualificationsBA and Management Advancement Programme.
Area of expertiseBusiness.
Other directorships and trusteeshipsPublic Investment Corporation; Government Employees’ Pension Fund; and Thusanang Trust.
8Mr KC PhihlelaGroup Executive:
Commercial
Year joined Transnet 2003
QualificationsEngineering, MBA and Executive development.
Area of expertiseEngineering and operations.
Other directorships and trusteeshipsMarine Data Systems (Pty) Ltd; B2B Africa (Pty) Ltd and Tru-South Group.
9Mr A Singh Acting Chief Financial
Officer
Year joined Transnet 2003
Qualifications BAcc and CA(SA).
Area of expertiseFinancial and business.
Other directorships and trusteeshipsComazar (Pty) Ltd; Crosskeys Security Services (Pty) Ltd; Owner-Driver Management (Pty) Ltd; Protekon (Pty) Ltd; Freight Logistics International; Transhold Properties (Pty) Ltd; andTransnet Retirement Fund.
10Mr KXT Socikwa Chief Executive:
Transnet Port Terminals
Year joined Transnet 1995
QualificationsBCom and LLB.
Area of expertiseLegal and commercial.
Other directorships and trusteeshipsInvestec Bank Ltd; RAM Hand-to-Hand Couriers; The Brand Union SA (Pty) Ltd; and Southern Palace Investments.
11Ms Z Stephen Group Executive:
Corporate Services
Year joined Transnet 1999
QualificationsBProc; LLB and Higher Diploma in Company Law.
Area of expertiseLegal, Corporate Governance and Risk Management.
Other directorships and trusteeshipsTransnet Retirement Fund.
12Mr R Vallihu Chief Executive:
Transnet Rail
Engineering
Year joined Transnet 1995
Qualifications BSc (Hons) and MBA.
Area of expertiseStrategy and engineering.
13Mr R Wolfenden Chief Audit Executive:
Transnet Internal Audit
Year joined Transnet 2010
QualificationsBCompt; MBA and CIMA.
Area of expertiseFinance, Corporate Governance, Internal Control and Strategy.
Other directorships and trusteeshipsErnst & Young Advisory Services.
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