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Linking Ports to Railway InfrastructureAfrican Ports and Maritime Conference
10 December 2009Alex Masianoga
Acting General Manager (Office of the C.E)Transnet Freight Rail
2
Presentation Outline
1 Global & Regional Perspective
2 State of Port and Rail Infrastructure
4 Integration Challenges and Intermodalism
5 Transnet’s Approach
6 Conclusions
3
The Competitive Challenge for the Region
Global trade routes
The Relevance factorIntensity of global shipping
PoliticalInstability
Reliance onminerals
Poverty CurrencyInstability
Monopolies
Logistics Infrastructure not
developed and integrated
Tradeinhibitors
Sustained Economic Growth
PoliticalInstability
Reliance onminerals
Poverty CurrencyInstability
Monopolies
Tradeinhibitors
Sustained Economic Growth
4
Trade Agreements: Stimulate Regional Economic Growth and Create a Borderless Region
The region requires integrated transport infrastructure to move the products created by trade agreements
6
Key Drivers of Regional Growth
Commodities
Malaw
i
Zambia
BotswanaNamibia
South Africa
Moca
mbi
que
TanzaniaDemocratic Republic of Congo
Zimbabwe
Angola
Swaziland
Malaw
i
Zambia
BotswanaNamibia
South Africa
Moca
mbi
que
TanzaniaDemocratic Republic of Congo
Zimbabwe
Angola
Swaziland
National Policies (Economic)
‘Chindiafication Factor’ De- / Re-Regulation & Policy
7
Key Drivers of Rail Growth in the Region
Mining sector contributes largest volumes to GDP in Africa/ Region
• Immediate access to road/rail systems• Standard for freight handling (rail and
ports)• Support small and large scale
developments across all economic sectors, incl. mining/ bulk
• Rail preferential access• Higher turnaround • Better asset utilisation
• Condition• Legislative pressure• Costs: 200% more than rest of the world
IntermodalismEconomic Growth Recovery
Port Capacity Road Network
8
Southern Africa Context
Southern AfricaRailway network
Source: Transnet Group Planning
Adequacy of Transport Infrastructure in the Region
The Rail network provides: A vast footprint Strategic lines to landlocked
countries Uni-gauge (1067mm) Links to existing and developing
ports Region benefiting from donor
funding and private investment for infrastructure development
10
Regional Logistics Challenges
Transport infrastructure development and investment
Road; Rail; Ports Integrated transport operations
across borders Leadership & expertise Logistics costs Share of world trade Modal imbalance between road
and rail Poor sharing of resources Political and economic
instability directly influence foreign direct investment
Africa lags behind the rest of the world in all aspects of infrastructure development -- quantity, quality, cost and access - a very fragile system
Freight cost as a % of total import value:
8.8% for developing countries, 5.2% for industrial countries (UNCTAD 2002)
At a sub-regional level West Africa: 14% East & Southern Africa: 15.2% North Africa: 11%
In Africa- Rail is a strategic resource
11
State of Transport Infrastructure in the Region
Capacity of the transport system and regional corridors is as good as the weakest link
12
Rail and Port Issues in the Region
1. Road & Rail infrastructure that connects hinterland to the ports
2. Traffic Congestion3. Infrastructure development4. Conversion to
containerisation not complete nor integrated
5. Investment and funding constraints
Main Challenges
13
Status of Intermodalism in the Region
SADC largest contributor to GDP is Mining, suited to rail
Economic growth for SADC requires development of export driven manufacturing sectors
Manufacturers require intermodal connectivity into global markets
Intermodal infrastructure is limited
Containerisation is the preferred mode of transport in international trade
It integrates SADC into global trade It is the foundation of logistics infrastructure
that will support the growth of the manufacturing sector
It creates seamless logistics corridors It provides for productive use of modes and
funds It provides ease of operational
integration with ports It will contribute to reducing the cost of doing
business
Status Response
It is the bridge between 3rd and 1st world competitiveness
14
Connection
InterchangeComposition Decomposition
Local DistributionNational/ Regional ‘Superhighways’Intermodal Terminals
Trans-Kalahari Logistics Corridor
Maputo Logistics Corridor
Freight
Modal Co-operation to create ‘Superhighways’ in the Region
Rail provides access to multi-country long haul routes
Road must create efficient local/ in-country networks
Ports are the global gateways
15
Weste
rn
Saha
ra
Mali NigerChad
BurkinaFaso
Central African Republic
Sierra LeoneLiberia
Democratic Republic of Congo
Tanzania
RwandaBurundi
Angola
Zambia
Malawi
Moza
mbiqu
e
Mada
gasc
ar
ZimbabweNamibia
Botswana
South AfricaSwaziland
Lesotho
Tunisia
Algeria
Morocco
BeninGhana
TogoIvoryCoast
CongoGabon
Equatorial Guinea
Nigeria
Cameroon
Libya Egypt
Mauritania
Sudan EritreaSenegal
Ethiopia
DjiboutiGuinea
Somalia
KenyaUganda
Weste
rn
Saha
ra
Mali NigerChad
BurkinaFaso
Central African Republic
Sierra LeoneLiberia
Democratic Republi
Algeria
BeninGhana
TogoIvoryCoast
CongoGabon
Equatorial Guinea
Nigeria
Cameroon
Libya
Mauritania
Senegal
Guinea
Central African Republic
Democratic Republic of Congo
Tanzania
RwandaBurundi
Angola
Zambia
Malawi
Moza
mbiqu
e
ZimbabweNamibia
Botswana
South AfricaSwaziland
Lesotho
ogo
CongoGabon
Equatorial Guinea
Nigeria
Cameroon
Ethiopia
So
KenyaUganda
Maputo
WalvisBay
SA TFR strategy to develop and optimise rail corridors with SADC partners
NamibiaTranshipment hub & Feeder for West AfricaTranshipment hub & Feeder Port for SADCEmerging contender for Feeder services
Competitive Port Strategies
Dar es Salaam
• Transhipment hub & Feeder Port for East Africa
• Transhipment hub & Feeder Port for SADC
Illustrative Competitor StrategiesStrategic position of LogisticsCompanies via (Commodity Trading, Shipping, Terminals, Rail, Road & Logistics Services)
Competitive Challenges: Conflicting Interests
Country Competitive Strategies
focus on lock-out through port and rail links into key
markets
International Consortiums
focus on lock-in strategies through
concession and funding
mechanisms
Angola
16
Strategic Approach to Regional Integration
Corridor Approach to Economic Growth Economic Development Nodes Transport Corridors Policy and Regulatory Implementation and Enforcement
Infrastructure Planning System wide Supply chain focus in support of Transport Corridors Holistic Approach, sum is greater than the individual parts
1
2
3 Funding
Corridor logic (address weakest link first) Optimal mix of private and public sector funding Shared benefits
18
Metamorphosis of Ports and Rail
Public Agencies
Independent Competing Businesses
Elements in a Logistics
System
Trade Enablers
•Central control•Publicly owned•Harbour Boards/ Authorities
•Autonomous ports
•Privatised/ quasi-privatised• Internal KPI’s
•Planning focus•Vertical & horizontal integration
Focus on improving
internalefficiencies
Focus on achieving network
efficiencies
Shifts in the role of Ports : From Traditional to Knowledge / Global Economy
Mid 80’s
Focus on achieving
global performance
•Economic performance
•Global competition
Late 90’s Current
Shifts in the role of Rail :
Rail is integral to the total ‘supply chain promise’PortRail MaritimeCustomer/
Terminal
From Stand Alone ConnectorsFrom Agriculture & Mining IntermodalFrom Engineering Run Customer Service Focus
19
Rail and Port as Integrated Systems
Infrastructure
RailService
Assets & Resources• Rolling Stock• People
Assets & Resources:Terminal Equipment
People
Terminal Service
Infrastructure
Rail – Port Corridor
NorthcorCapecorSouthcorNatalcorR.BaycorN.WestcorEastcorN.EastcorSishen-SaldanhaSentracorSouth East CorWestcorFreestateNamibia
Springfontein
Klerksdorp
Estcourt
Bethlehem
Volksrust
MakwassieOrkney
Welverdiend
Theunisen
Richmond
Uitenhage
Thabazimbi
WitbankRayton
Port Shepstone
Oudtshoorn
Postmasburg
Bethal
Roossenekal
Polokwane
Cato Ridge
Touwsrivier
Naboomspruit
Sishen
Saldanha
Cape Town
East London
Port ElizabethMosselbaai
Bitterfontein
Kraaifontein
Knysna
Patensie
Klipplaat
Rosmead
New Brighton Port Alfred
Somerset East
Noupoort
De Aar
Prieska
Upington
Kakamas
Worcester
Hutchinson
Beaufort West
Belmont
Hotazel
Warrenton
Pudimoe
Mafikeng
Coligny
Bloemfontein
Aliwal North
Dreunberg
Koffiefontein
Stormberg
Barkly East
Blaney
Umtata
Fort Beaufort
Maseru
Sasolburg
Lichtenburg
Harrismith
Bergville
Harding
Durban
UnderbergStanger
Richards Bay
Vryheid
Ladysmith
Graskop
MachadodorpBelfast Komatipoort
Phalaborwa
Musina
MakhadotSoekmekaar
Nylstroom
Pretoria
Ellisras
Northam
EmpangeniKimberley
Copperton
Beit Bridge
Pietermaritzburg
Nakop
Erts
Rustenburg
Hoedspruit
Dundee
OgiesKrugersdorp
Golela
Queenstown
KroonstadNewcastle
Sentrarand
Bellville
Liebendal
Kalbaskraal
Boksputs
Calvinia
Vryburg
Ottosdal
VermaasErmelo
Atlantis
George
Avontuur
Sannaspos
Pyramid South
Marble HallPienaarsrivierSteelpoort
Vereeniging
Danskraal
Cedara
Kokstad
Piet Retief
DelmasKaydale
NelspruitKaapmuiden
Tzaneen
Pretoria-North
PendoringMacmullinsMagaliesburg
Marseilles
Gunhill
Burgersdorp
Sterkstroom
Stutterheim
Maclear
CradockCookhouse
AlicedaleDal Josafat
J’burg
Bredasdorp
Overborder corridors
Strategic corridors linking ports, the hinterland and SADC routes, benefiting from integration and intermodalism
21
Creating Integrated Rail/ Port Freight Corridors
Fit-for-purpose, efficient Transport Linkages Integrate Operations, Planning, and Resource utilisation
of Ports and Rail Macro and Micro Interface Port / Rail structures for
operations and infrastructure maintenance Integrated Port/ Rail Expansion and Investment
Programmes In-port Rail Enhancement Projects i.e. Kingsrest rail
stack in Durban Joint Industry and Customer Consultation Joint Benefits and Performance tracking No “Us and Them” – Teamwork is the key
22
Critical Success Factors for Rail/Port Integration
Services• Joint Customer/ Industry strategies• Preferential access for Rail into terminals• Information sharing and planningAssets and Resources• Quick turnaround of rolling stock• Joint efficiency targets • Joint investment planning
1
2
3Infrastructure• Modernised, well maintained rail infrastructure• Joint developmental objectives incl. spatial development • Integrated investment cases
23
Africa: Strategic Approach
ProtectCorridors
GrowVolumes
Reduce the cost of logistics(20-25%) for SADC
countriesInfluenced by global trade flows and industry developments
•Uniformity of Service – Reliability & Predictability
•Corridor throughput optimisation and management
– Migrate to block trains– Load consolidation at Ndola and Lusaka– Manage wagon turnaround– Make services customer friendly
•Integrated planning and operations with Ports•Alliances
– Operator focus for joint planning and execution •Supply of Resources
• SADC– SARA alignment on marketing
strategy– Bilateral and Interface
Agreements with overborder railways
– Similar Operating model on all corridors
– Position SARA in the SADC trade protocol
– Joint alignment at CEO level• Beyond SADC– Selective involvement
augment to SA/ SADC business
Weste
rn
Saha
ra
Mali NigerChad
BurkinaFaso
CentralAfricanRepublic
SierraLeoneLiberia
DemocraticRepublicofCongo
Tanzania
RwandaBurundi
Angola
Zambia
Malawi
Moza
mbiqu
e
Mada
gasc
ar
ZimbabweNamibia
Botswana
SouthAfricaSwaziland
Lesotho
Tunisia
Algeria
Morocco
BeninGhana
TogoIvoryCoast
CongoGabon
EquatorialGuinea
Nigeria
Cameroon
Libya Egypt
Mauritania
Sudan EritreaSenegal
Ethiopia
DjiboutiGuinea
Somalia
KenyaUganda
Weste
rn
Saha
ra
Mali NigerChad
BurkinaFaso
CentralAfricanR e p u b l i c
SierraLeoneLiberia
D e m o c r a t i c R e p u b l i
Algeria
BeninGhana
TogoIvoryCoast
C o n g o
G a b o n
E q u a t o r i a l G u i n e a
Nigeria
C a m e r o o n
Libya
Mauritania
Senegal
Guinea
CentralAfricanR e p u b l i c
D e m o c r a t i c R e p u b l i c
o f C o n g o
T a n z a n i a
R w a n d a
B u r u n d i
A n g o l a
Z a m b i a
M
ala
w
i
Mo
za
m
biq
ue
Z i m b a b w e
N a m i b i a
B o t s w a n a
S o u t h A f r i c a
S w a z i l a n d
L e s o t h o
ogo
C o n g o
G a b o n
E q u a t o r i a l G u i n e a
Nigeria
C a m e r o o n
Ethiopia
S o
K e n y aU g a n d a
Weste
rn
Saha
ra
Mali NigerChad
BurkinaFaso
CentralAfricanRepublic
SierraLeoneLiberia
DemocraticRepublicofCongo
Tanzania
RwandaBurundi
Angola
Zambia
Malawi
Moza
mbiqu
e
Mada
gasc
ar
ZimbabweNamibia
Botswana
SouthAfricaSwaziland
Lesotho
Tunisia
Algeria
Morocco
BeninGhana
TogoIvoryCoast
CongoGabon
EquatorialGuinea
Nigeria
Cameroon
Libya Egypt
Mauritania
Sudan EritreaSenegal
Ethiopia
DjiboutiGuinea
Somalia
KenyaUganda
Weste
rn
Saha
raWe
stern
Weste
rn
Saha
ra
Saha
ra
Mali NigerChad
BurkinaFaso
CentralAfricanRepublic
SierraLeoneSierraLeoneLiberiaLiberia
DemocraticRepublicofCongo
Tanzania
RwandaBurundi
Angola
Zambia
Malawi
Malawi
Moza
mbiqu
e
Moza
mbiqu
e
Mada
gasc
arMa
daga
scar
ZimbabweNamibia
Botswana
SouthAfricaSwaziland
Lesotho
Tunisia
Algeria
Morocco
BeninGhana
TogoIvoryCoast
CongoGabon
EquatorialGuinea
Nigeria
Cameroon
Libya Egypt
Mauritania
Sudan EritreaSenegal
Ethiopia
DjiboutiGuinea
Somalia
KenyaUganda
Weste
rn
Saha
raWe
stern
Weste
rn
Saha
ra
Saha
ra
Mali NigerChad
BurkinaFaso
CentralAfricanR e p u b l i c
SierraLeoneSierraLeoneLiberiaLiberia
D e m o c r a t i c R e p u b l i
Algeria
BeninGhana
TogoIvoryCoast
C o n g o
G a b o n
E q u a t o r i a l G u i n e a
Nigeria
C a m e r o o n
Libya
Mauritania
Senegal
Guinea
CentralAfricanR e p u b l i c
D e m o c r a t i c R e p u b l i c
o f C o n g o
T a n z a n i a
R w a n d a
B u r u n d i
A n g o l a
Z a m b i a
M
ala
w
i
M
ala
w
i
Mo
za
m
biq
ue
Mo
za
m
biq
ue
Z i m b a b w e
N a m i b i a
B o t s w a n a
S o u t h A f r i c a
S w a z i l a n d
L e s o t h o
ogo
C o n g o
G a b o n
E q u a t o r i a l G u i n e a
Nigeria
C a m e r o o n
Ethiopia
S o
K e n y aU g a n d a
Infrastructure
TFR Rail Service
Rolling Stock & Equipment
Infrastructure
Railway 1 Service
Rolling Stock & Equipment
Infrastructure
Railway 2 Rail
ServiceRolling Stock & Equipment
Infrastructure
TFR Rail Service
Rolling Stock & Equipment
Infrastructure
Railway 1 Service
Rolling Stock & Equipment
Infrastructure
Railway 2 Rail
ServiceRolling Stock & Equipment
Service Focus Geographic Focus
Objectives
24
Mala w
iZambia
BotswanaNamibia
South AfricaM
ocam
biqu
e
United Republic of Tanzania
Democratic Republic of Congo
Zimbabwe
Angola
Swaziland
•80% of rail freight in SADC is northbound
• 70% of these flows return empty
• Rail has SARA ‘corridor’ agreements
• TFR focuses on integration of strategic corridors through integrated rail operations with SARA and Concessionaires
Forecast Rail and Corridor Growth in SADC (mt)
Key opportunities:
• Intermodal• Fuel• Sulphuric Acid• Maize
ZIMBABWE 2009/ 2010 2010/ 2011 2014/ 2015Fwd 0.029 0.015 0.020Rec 0.227 0.119 0.203
SWAZILAND 2009/ 2010 2010/ 2011 2014/ 2015Fwd 0.095 0.093 0.113Rec 0.222 0.155 0.203
NAMIBIA 2009/ 2010 2010/ 2011 2014/ 2015Fwd 0.101 0.048 0.070Rec 0.411 0.174 0.221
BOTSWANA 2009/ 2010 2010/ 2011 2014/ 2015Fwd 0.490 0.272 0.384Rec 0.641 0.872 1.447
ZAMBIA 2009/ 2010 2010/ 2011 2014/ 2015Fwd 0.028 0.001 0.001Rec 0.208 0.096 0.141
DRC 2009/ 2010 2010/ 2011 2014/ 2015Fwd 0.028 0.001 0.001Rec 0.028 0.000 0.000
MOZAMBIQUE 2009/2010 2010/2011 2014/2015Fwd 0.083 0.114 0.078Rec 2.884 3.983 10.000
Africa TFR (Mt)
’09/10
’10/11
’11/12
Forwarded
1.03 0.6 0.8
Received 4.7 5.4 6.7
25
Transnet participation in mechanisms to promote Regional Integration between Rail and Ports
National Infrastructure PlanNational Infrastructure Plan
National Ports PlanNational Ports Plan National Rail PlanNational Rail Plan National Pipeline PlanNational Pipeline Plan
Methane-rich GasMethane-rich Gas
Crude OilCrude Oil
Aviation Turbine FuelAviation Turbine Fuel
Refined Productsincl. NMPP
Refined Productsincl. NMPP
Gauteng Freight RingGauteng Freight Ring
Central Freight RingCentral Freight Ring
Inland CorridorsInland Corridors
Port CorridorsPort Corridors
Hubs and TerminalsHubs and Terminals
Rolling StockRolling Stock
Saldanha BaySaldanha Bay
Cape TownCape Town
Port ElizabethPort Elizabeth
NgquraNgqura
East LondonEast London
DurbanDurban
Richards BayRichards Bay
Mossel BayMossel Bay
Inter-operabilityInitiatives30 year Infrastructure Plan SADC Initiatives
SARA
UAR
UIC
Operations & Information Technology
Human Resources
Infrastructure & Equipment
Marketing
Includes SADC
corridors
26Source : Transnet Corporate Plan
Rail and Ports: Integrated Capital Investments
11/ 12
3,892
13,331
12/ 131,762
9,480
13/ 14
12,841
21,912
09/ 10
11,321
19,442
10/ 11
9,156
16,336
Annual Capex (Rbn)
Sustaining vs Expansion (3yrs)
58%42%
SustainingExpansion
9,0718,121
7,180
9,4397,718
54%
TFRR43.5bn
3%
TRER2.1bn
20%
TNPAR16.3bn
8%TPTR6.3bn
14%
TPLR11.1bn
1%
OtherR1.2bn
Capex per Division
27
Conclusions
1. High potential growth in the Region2. Region has to promote Intermodalism 3. Rail and Port Infrastructure developed, and
developing to enable trade flows, however not in a co-ordinated manner
4. Rail and Ports not managed as strategic resources within a broader logistics system
5. Aligned Public and Private partnerships 6. Regional development requires:
Joint Planning, Investment and Funding Integrated Operating Systems The “Will to make it Work”