transnet local public procurement feedback: portfolio ... · diesel locomotives • graph 2...
TRANSCRIPT
Transnet Local Public Procurement Feedback:
Portfolio Committee on Trade and Industry
September 2017
Transnet is the custodian of South Africa’s rail, ports and pipelines
• 16 Cargo Terminals
operating across 7
SA ports
• Volumes: 4 396
(000’ TEUs)
• Revenue R11,1
billion
• CAPEX: R1,2 billion
• Assets R18,3 billion
• 8 891 employees
• 8 Commercial ports
along 2 798 km of
coastline
• Volumes: 4 466
(000’ TEUs)
• Revenue R10,3
billion
• CAPEX: R2 billion
• Assets R89,2 billion
• 4 188 employees
• 30 400 km of railway
track. General
freight & 2 heavy
haul export lines
• Volumes: 219,1 mt
• Revenue: R39,1
billion
• CAPEX: R15 billion
• Assets R175,8
billion
• 30 305 employees
• Support TFR for
rolling stock and
TPT for lifting-
equipment
maintenance
• Revenue R9,3
billion
• CAPEX: R945
million
• Assets R17 billion
• 12 164 employees
• 3 800 km of
pipelines, mainly
• Volumes: 16 978
(Mℓ)
• Revenue R4,3
billion
• CAPEX: R1,7 billion
• Assets R41,6 billion
• 686 employees
Transnet Group Capital
Transnet Foundation
Transnet Property
Transnet Pipelines
(TPL) Transnet
Engineering(TE)
Transnet Freight Rail
(TFR)
Transnet Port
Terminals
(TPT)
Transnet National
Ports Authority
(TNPA)
Supporting Pipelines Rail Ports
• Invested R145
billion on MDS
initiatives over past
five years and will
invest further
R229,2 billion.
• CSI: R234 million
• Property
Management
3
Background and context
Local Content verification and the funding thereof Various sectors in the South African Economy have been designated to drive the creation of capacity in the economy by
setting various levels of local content.
In the Rail sector the following key items have been designated: Diesel Locomotives Electric Locomotives Components:
Locomotive assembly Wheels Couplers Bearings Bogies Braking systems Axles
Transnet has implemented contract management controls and processes which are being used regarding the OEM
reporting of local content delivery. Transnet has appointed appropriate resources for the execution and oversight of these contract management controls and processes.
According to Transnet’s’ understanding SABS has been appointed as the official Independent Local Content Verification
Agency and as such it is understood that SABS would be suitably funded by the fiscus to be able to perform their function.
The legislation and National Treasury Instruction notes are silent as to whom should carry the costs. To ensure that SABS as the Independent Verification Agency is “seen and is” independent they should funded by the fiscus and not by parties directly or indirectly affected by the verification.
4
Local Content engagement with DTI prior to the RFP for 1064 closing
During the RFP preparation stages Transnet engaged with DTI on a continuous basis to ensure that the RFP was compliant with the local content requirements.
The designations were fairly new and Transnet wanted to ensure that the RFP complied in all aspects regarding local content.
DTI provided Transnet with the local content documents (PDF versions) that were required to be included in the final RFP. These documents, as received from the DTI and were included in the final RFP.
Once the tender was complete these local content documents which the bidders had to include in their responses were provided to DTI as agreed.
The general understanding was that DTI would manage and monitor the local content reporting by
the supplier, including the verification thereof and thus also the consequence management of non-compliance by the supplier to the legislation.
5
1064 Locomotive acquisition
Post Award and Reporting • In August 2016 Transnet, DTI, DPE, SABS and the OEM’s came to present to the Portfolio Committee on the localization progress.
• At this meeting Transnet reported that local content documents for 1064 locomotive build program have been submitted to DTI as required for monitoring and auditing by SABS;
• It was also reported that SABS were engaging OEMs regarding the monitoring and verification process. However, there was a challenge with regards to who should pay for the verification cost.
• Transnet continues to receive local content updates from OEMs whilst they await the local content audit.
Transnet Freight Rail
6
Transnet Freight Rail
Freight Rail transports ~15% of the nations freight tonnage annually
Owns and maintains a network of ~22 000 route km and ~30 000 TrackKm
Moved 219.1 million tons in the 2016/17 financial year Record 226.5 million tons in 2014/15
Operates ~1 200 trains per day
Serves ~450 key accounts
Transports ~4.7mt per week
Employs ~27 679 people
The largest Railway in Africa and the Middle East
7
Supplier Development and Local Content
Supplier Development (SD): Aims to increase the competitiveness, capacity and capability of the South African supply base where there are comparative advantages and potential for local or regional supply. This can be achieved through the following: • Industrialisation • Capability and Capability Building
(Localisation) • Sustainability/ Technology and IP Transfer ) • Skills Development • Job Creation and Preservation • Small Business Promotion • Down Stream Supplier Development (Rural
Development) SD is reported monthly and verified on a quarterly basis. OEMs provide a comprehensive verification schedule that should balance to the monthly reports as submitted to TFR.
Local Content (LC): The portion of the bid price which is not included in the imported content, provided that local manufacture does take place. The Locomotives Build Programme fall under the Rail Rolling Stock Designation. Electric Locomotives 60% Diesel Locomotives 55% The locomotives specifications were drafted in accordance with Transnet operational requirements also taking into account the adherence to designated sector.
8
OEM Geographic Allocation and Production Volume
Koedoespoort
Bayhead
OEM Locomotive production no.
Locomotive type
233 Diesel
359 Electric OEM Locomotive
production no.
Locomotive type
240 Electric
232 Diesel
9
Locomotives Accepted
OEM Locomotive Total Locos
Accepted FY 15/16 FY 16/17 FY 17/18
No. of locos
assembled in SA
CRRC E-Locomotive Supply
(CSR)
359
116 0 80 34 76
Bombardier Transportation
South Africa (BT)
240 0 0 0 0 0
General Electric South Africa
Technologies (GE)
233 153 14 85 51 147
CRRC Dalian Locomotive &
Rolling Stock (Pty) Ltd (CNR)
232 0 0 0 0 0
• Breakdown of financial year within which locomotives were manufactured and accepted.
10
Local Content expenditure percentages for Electric
and Diesel Locomotives
Electric locomotives (%) 1 Diesel locomotives (%) 2
Total Local Content Target
Total Local Spend to Date (Designated
components)
Total Local Spend to Date (Designated
components)
Total Local Content Target
Number of locomotives
116
359 153
233
Notes: Electric Locomotives • Graph 1 illustrates the current
status in terms of reporting figure 116 accepted locomotives of the 359 electric locomotives.
Diesel Locomotives • Graph 2 illustrates the current
status in terms of reporting figure 153 accepted locomotives of the 233 diesel locomotives.
• OEMs report monthly on their
local procurement which is inclusive of designated and non-designated components.
• The performance on designated components by the OEMs can only be confirmed once SABS has audited. Local Content
Relative to # of Locos
Accepted
Local Content Relative to #
of Locos Accepted
Sub-Systems and Other Components
Assembly of Locomotives
Assembly of Locomotives
2 Car Body:
- Car body shell
- Door system
- Windows
- Seats (For coach interior)
- Lighting
- Grab pillars and rails
- Interior cladding
- Cable and wire
- Safety equipment
- Pipe works and ducts
3 Bogie:
- Bogie frame
- Motor suspension unit
- Wheel sets and wheel components
- Axle and axle boxes
- Bearings
- Bolster
4 Coupling Equipment :
- Coupler body
- Coupler hook
- Yoke
- Pin
- Draft-gear
1 Suspension :
- Shock absorbers and dampers
- Springs
6 Heat, Ventilation and Air Conditioning
- Fabrication
- Power Coating
- Heat Exchangers
- Fans
- Compressors
- Refrigeration components
- Electrical components
- Fasteners
- Insulation and liners
7 Braking System :
Braking System
8 Alternators :
Alternators
Traction Motors :
Traction Motors
Electric Systems :
Electric Systems
9
10
5
DESIGNATED COMPONENTS
11
Local Suppliers
12
No SA Supplier Name BBBEE Status
Black
Ownership
Black Women
Ownership EME QSE Large
1 Aero Service (Pty) Ltd 2 0.00% 0.00% x x
2 Alstom Ubunye 3 68.33% 68.33% x x
3 Ansys Limited 2 43.84% 19.33% x x
4 Benkling CC 2 51.00% 51.00% x x
5 Booyco Engineering (Pty) Ltd 4 26.00% 26.00% x x
6 DCD Rolling Stock (Pty) Ltd 4 47.81% 5.35% x x
7 EMS Industries (Pty) Ltd 2 0.00% 0.00% x x
8 Eqstra (Pty) Ltd 7 19.38% 9.57% x x
9 IEC Holden (Pty) Ltd 2 51.00% 25.87% x x
10 Janse Van Rensburg (Pty) Ltd 4 0.00% 0.00% x x
11 Kare Sheet Metal Products (Pty) Ltd 4 0.00% 0.00% x x
12 Knorr Bremse SA (Pty) Ltd 2 25.01% 15.01% x x
13 Laser Junction 4 26.00% 26.00% x x
14 Marble Gold (Pty) Ltd t/a Proseat 4 42.55% 0.00% x x
15 Microelettrica Power (Pty) Ltd 2 100.00% 15.00% x x
16 Minus 40 (Pty) Ltd. 4 0.00% 0.00% x x
17 MTU South Africa (Pty) Ltd. 4 0.00% 0.00% x x
18 Delberg Engineering (Pty) Ltd 2 51.00% 0.00% x x
19 Pacific Beach Trading CC 2 51.00% 0.00% x x
20 Pamodzi Unique Engineering 3 98.56% 29.86% x x
21 Penbro Kelnick (Pty) Ltd 4 26.00% 8.00% x x
22 Profibre 4 0.00% 0.00% x x
23 Radel (Pty) Ltd 2 0.00% 0.00% x x
24 RCK Rail Supplies (Pty) Ltd 1 52.00% 52.00% x x
25 Scaw South Africa (Pty) Ltd 2 73.20% 21.49% x x
26 SIGMA Logistic Solutions (Pty) Ltd 2 25.10% 0.00% x x
27 Siyahamba Engineering (Pty) Ltd 2 90.00% 10.41% x x
28 Swasap (Pty) Ltd 2 25.10% 15.01% x x
29 Tagtronics CC 4 0.00% 0.00% x x
30 Timken SA (Pty) Ltd 5 0.00% 0.00% x x
31 Trans Fire 4 0.00% 0.00% x x
32 Transnet Engineering 2 n/a n/a x x
33 Techtronic Technology Solutions 2 51.00% 0.00% x x
34 VescoPlastics Rail (Pty) Ltd 2 0.00% 0.00% x x
35 Vortex Airflow Systems (Pty) Ltd 4 0.00% 0.00% x x
Challenges with the Delivery Schedules
• Setting of production lines
• Training on new systems and processes
• Language barriers
• Change of Traction Motor Blower Motors due to inadequate cooling.
• Implementation of incorrect welding method on the under frame of the locomotives. Necessitated
recall of 20 already built locomotives for stress relief as well as introduction of pre-heating
methodology on locomotive manufacturing going forward.
• Longer than anticipated design period due to excessive vibration levels of the Engine/Main Alternator
combination. Resolved and tested in March
• Move to Bayhead, Durban from Koedoespoort Pretoria
• Extraordinary requirement for foundation depth where jigs and fixtures are to be situated due to
seabed geological formation.
• Inadequate provision for modifications based on the outcome of Acceptance Type Testing.
13
Rail Performance – Growth path hampered by economic and market conditions
219214227
210208201182179
0
50
100
150
200
250
2010/11 2009/10
5%
2013/14 2012/13 2011/12
+2.3%
2016/17 2015/16 2014/15
Million Tons
Global recession – rolling stock parked
Commodity market slump; Drought; Low economic
GDP growth
MDS Year 1
14
15
Reasons for Not Suspending CRRC E-Locomotives (CSR) Contract
The Locomotive Supply Agreement makes provision of a standard process that needs to be followed should the OEMs not perform according to their contractual obligations. Should Transnet wish to suspend the contract, Transnet must prove based on a tracked series of events that the contractor has failed to deliver according to the contract. To date, CSR has been delivering locomotives according to the delivery schedule and Transnet has issued delay penalties where the OEMs have failed to deliver in accordance with planned delivery. Similarly for SD, non-compliance penalties are issued to the OEMs should they delay on their SD obligations. A view of OEM performance in terms of Local Content will only be determined once SABS conducts an audit, as the appointed DTI Local Content Auditor.
Local Suppliers
CRRC E-Locomotive Supply (Pty) Ltd
16
Local Suppliers
CRRC Dalian Locomotive & Rolling Stock (Pty) Ltd
17
Local Suppliers
Bombardier Transportation South Africa (Pty) Ltd
18
Local Suppliers
General Electric South Africa Technologies (Pty) Ltd
19
Contents
1 2 Transnet Engineering History, Capacity & Capabilities
TE’s Centre of Excellence 3 Locomotive Build Program (TE Scope) 4 TAL – Trans-Africa Locomotive 5
TE’s Response to Parliamentary questions
LC Challenges and Engagements with DTI 6
NALEDI INHLANGANISO AND STATUS OF FORGED
21
Ports
• Naledi was awarded a 5year contract in 2014
(with an option to extend to a further 2 years)
• The award was for forged wheels which were not designated at the time and Naledi was importing them from Valdunes in France
• The wheel supplied was subject various tests
which includes a lab test, and 2 years in-service testing
• Approval process was concluded in March
2017
• Wheels ordered in line with anticipated demand from TFR and for stock replenishment
Sample ordered
Lab tests are conducted
Wheel is delivered with
data sheets
Orders are place in line
with requirements
More tests are done on safety
critical components
Approval granted on meeting all
the required standards
Approval Process
STATUS OF FORGED IN SA • Currently TE is not aware of any wheel forging plant in South Africa • TE is only aware of one plant that machines imported black forged wheels
TE’s mandate to enable the South African Industry
Manufacturing
• Components are procured from Industry • Industry is supporting TE’s customer
requirements • Industry is supporting TE’s operation in
terms of development • All R&D innovations are done with
industry’s engagement
Commodities
• Steel • Bearings • Wheels • Valves • Braking
System…etc
Types of Contracts
• Long and short term contracts • Orders are based on required
volumes aligned to delivery dates / customer requests
• All tenders and contracts are in line with PPPFA / PFMA requirements
Growth of TE is Growth to the RSA Industry
Competitiveness is Growth
TE Over the years has worked with Industry to further its manufacturing and remanufacturing objectives
Industry Sessions • Annual
Engagements Stakeholders • DPE • DTI • DST • Funding Institutions • Customers
TE enablement means
Industry Feedback on Local Content
• FY14/15 • FY15/16 TE has held
engagements with its suppliers to communicate its plans.
MDS was launched with the industry capabilities in mind
Supplier Development Initiatives were communicated to the SMME’s
Prior to the CSD website TE advertised all its tenders on newspapers
All of TE’s tenders are advertised on the National Treasury Website
All designated components TE ensures that they are evaluated as per the NT Instruction Note
Expensive to localize Lack of technical support
from DST / DTI leaving only TE to support
Funding takes too long and not readily available
The volumes do not justify investment to localize.
TE manufactures on customer requirements
Interpretation challenges on the ramp-up period based on the instruction Note
The drive to include stakeholders in the engagements was motivated by the fact that TE is strategic to the NDP
30 August 2016 TE hosted the Trade and International Relations& Economic & Business Development to KDS for a tour on the line
Transnet Challenges on Local Content
Difficult to localize on the legacy fleet parts as these are locomotives to be phased off in the next 3 years.
Unscheduled maintenance have unpredictable volumes which makes it impossible to forecast
Contents
1 2 Transnet Engineering History, Capacity & Capabilities
TE’s Centre of Excellence 3 Locomotive Build program (TE Scope) 4 TAL – Trans-Africa Locomotive 5
TE’s Response to questions directly impacting its existence
LC Challenges and Engagements with DTI 6
25
Continuous technology advancements and improvements
Running Maintenance
Remanufacturing & Conversions Locomotives,
Wagons, Coaches, Components
Heavy Maintenance
Upgrades
Locomotives, Wagons, Coaches,
Components
New Builds
Locomotives, Wagons
Leasing
1859 – Landing of the first railway locomotive in South Africa at Cape Town Running maintenance was first established
TE brings over 150 years of experience to the Transnet Engineering sector and has built substantial expertise...
TE’s evolution and transformation of the SA transport industry1
1950s – Koedoespoort plant established to remanufacture steam locomotives 1970s – Started refurbishing electric locomotives
1999 – Expanded capability to upgrade locomotives starting with 6E1 to 17E 2007 – Upgrading of diesel locomotives
2008 – Entered the new build market
SOURCE: Team analysis
1: Evolution of locomotive capability illustrated
26
We have a wide range of services across the manufacturing value chain per product offering
TE product and service offering within the manufacturing value chain
SOURCE: Team analysis
TE is strongly positioned along the manufacturing value chain, partnering with leading OEM’s and component manufacturers to provide a broad set of quality products
Research & Design Manu-facture
Assembly / Kits
Re-build / Re-man.
Refurbish & Upgrade
Maintain & Repair
Locomotive
Wagon
Coach
Port
Wheel
Rolling Stock
Equipment
Rotating
Machine
Foundry
Pro
du
ct
Bu
sin
ess
Ce
ntr
es o
f E
xce
lle
nce
TE boasts 6 modern manufacturing facilities, equipped with the latest technology, worth over R8bn
27
TE manufacturing infrastructure
SOURCE: Team analysis
Technological highlights
▪ Precision Laser Cutting Equipment
▪ Precision CNC Machining and Bending Equipment
▪ Robotic Welders
▪ 3D Measuring Machines
▪ AC Testing Equipment and Facilities
Efficiency Processes & Tools
▪ Lean Manufacturing Tools
▪ Lean Transactional Protocols
▪ Six Sigma Certified Employees
Koedoespoort Germiston Bloemfontein Durban Uitenhage Salt River
Locomotive
Wagon
Coach
Wheel
Rolling Stock
Rotating Machine
Ports
Foundry
TE has 6 manufacturing centres across the country, with specific product support...
...and each plant utilizes modern plant technology and employs efficiency practices
Businesses
Transnet Engineering Consolidated Capacity
28
Products/Business Capacity
Wagon Business:
• Has capacity to manufacture more than 4500 new wagons a year from three plants i.e. Uitenhage, Bloemfontein and Germiston
Plants
• Has capacity to refurbish more than 5000 wagons per year
• In South Africa TE has capacity to provide maintenance services for a fleet of more than 80 000 wagons.
Types of Wagons:
• Gondola Type Wagons; Tank Wagons (Fuel, Chemicals, Gas & Cement) ; Flat Wagons (Container, Rail Carrier & Sleeper Wagons)
; Closed Top Wagons (Car Carriers, Food & Packed Grain); Bottom Discharge Wagons (Hopper, Ballast & Grain Wagons) and
General Purpose Wagons (Drop Side & High Sided) amongst others.
Locomotive Business
Locomotive Business:
• Has capacity to remanufacture more than 300 locomotives a year ranging from Diesel Locomotives to Electric locomotive.
• TE is currently building capacity to assembly more than 500 new locomotives per year in partnership with other OEMs in two
factories, Durban & Pretoria
• In South Africa TE has capacity to provide maintenance services for a fleet of more than 2200 locomotives
• TE has launched its first African Locomotive Manufactured and assembled at Koedoespoort Pretoria
Coach Business
• Coach Business:
• Capacity to Overhaul & remanufacture more than 350 coaches per year from three factories i.e. Durban, Cape Town & Pretoria
plants
• Capacity can be built to manufacture more than 200 new coaches a year
• Types of Coaches:
• Main line coaches sitters, sleeper coaches, restaurant/catering cars & power cars
• Metro motor & trailer coaches
• Health services trains & Government Services Trains
Transnet Engineering Capacity/Assembly/Manufacturing & Remanufacturing
30
Provide maintenance support services through our extensive geographic network of depots and sound maintenance strategies TE’s Locomotive Business maintenance support capability
TE Manufacturing Facilities
TE Manufacturing Facilities
Transnet Engineering’s Offering
Contents
1 2 Transnet Engineering History, Capacity & Capabilities
TE’s Centre’s of Excellence 3 Locomotive Build Program (TE Scope) 4 TAL – Trans-Africa Locomotive 5
TE’s Response to questions directly impacting its existence
LC Challenges and Engagements with DTI 6
Locomotives Business
36
Locomotive Business – Leading supplier of locomotive manufacturing and maintenance services in Southern Africa
SOURCE: Team analysis
General Information
The business has an annual capacity of: ~1681 new builds ~2601 upgrades /
remanufacturing ~3921 overhauls ~42001 maintenance
The Locomotive Business refurbishes, converts, upgrades and remanufactures in accordance with globally-accepted railway codes of practice, technical specifications and all factories have ISO 9001:2008 certification
Overview
Key Products and Service
The Locomotive Business is the leading supplier of maintenance, repair, upgrade and manufacturing services in Southern Africa for AC, DC and diesel-electric units. The Locomotive Business consists of 5 factories for new builds and remanufacturing, 1 heavy maintenance facility, a power electronics workshop and other support functions
New builds: 39200, 43 class, 44 Class, 20E, 21E,22E , 45 Class & TAL 2001
Upgrades: 7E1, 9E, 11E, 18E, 34/37 GM, 34 GE diesel electric locos
Minor Overhaul Programs (MOPs) DC type: 6E1, 8E, 10E, 10E1,
18E AC type: 7E, 7E1, 7E2, 7E3,
7E4, 11E Rebuilds: Diesel electric locos;
Electric DC locos; Electric AC locosv
By designing and Manufacturing Trans-
Africa Locomotive (TAL) which was launched in April
2017, TE has become the only African
Locomotive OEM in Africa
37
Locomotive Business – Leading supplier of locomotive manufacturing and maintenance services in Southern Africa
SOURCE: Team analysis
TE’s Locomotive Business capability across the value chain
Technology and Infrastructure
Testing & Commissioning
Maintenance & Upgrade
Assembly & Fitment
Mechanical Fabrication & Manufacture
Design & Manufactured
Electrical Fabrication & Manufacture
TE’s current capability
TE has capability to: • Heavy metal
engineering fabrication and manufacture
• Casting of various steel components
• Rebuild of all high voltage and electronic/electrical cubicles and equipment for locomotives
TE has designed: • 18E Locomotive • Trans Africa
Locomotive 2001 • Diesel upgrades • Locomotive
modifications to counter obsolescence
• Upgrades/redesigns to inherent design defects on the locomotive fleet
• Total cab design and manufacture
• Power electronic cubicle and rebuilds
TE has capability to: • Assemble and fit all
locomotive types completely: 3kVDC, 25kVAC, 50kVAC, 3kV/25kV and Diesel-Electric locomotives
TE has capability to: • Perform type testing,
commissioning testing and in-service testing of all locomotive types: 3kVDC, 25kVAC, 50kVAC, 3kV/25kV and Diesel-Electric locomotives
TE has capability to: • Perform all levels of
maintenance (scheduled, unscheduled, wreck repairs - light and heavy) on all locomotive types: 3kVDC, 25kVAC, 50kVAC, 3kV/25kV & Diesel-Electric
• Maintenance also includes general & minor overhauls
• Upgrades currently include GE34, GM34, GM37, 18E, 7E1 and will be expanding to include 10E, 10E1, 10E2, 7E2, 38Class
The Locomotive Business manufactures, converts, upgrades and remanufactures in accordance with
globally-accepted railway codes of practice, technical specifications and all factories have ISO 9001:2008
certification
Strategic Centres of Excellence that function as independent business units ensuring high product quality
38
TE’s specialised Centres of Excellence within the Locomotive Business
SOURCE: Team analysis
Centres of Excellence
… Fully fledged business units, which may have satellite businesses throughout the country … Supported by Product Development and Engineering departments … Continuously building skills and expertise to ensure high quality products are produced … Certified by the applicable OEMs. Power Electronics process is the only facility in SADC certified by Siemens … Capable across a number of functions across the value chain from new build, repair, refurbish and testing
Centres of Excellence are…
Power Electronics
High Voltage Cubicles
Low Voltage Cubicles
Recovery & breakdown
Locomotive Bogies
Locomotive Brake
Systems
Electronic Cards
Wagon Business
Wagons Business – Original Equipment Manufacturer (OEM) and Wagons maintenance services in Africa
40
General Information
The business has an annual capacity of: ~4500 new builds ~4000 re-manufacturing/
remanufactures ~16000 maintenance
The Wagons Business builds new, refurbishes, converts, upgrades and remanufactures in accordance with globally-accepted railway codes of practice, technical specifications and all factories have ISO 9001:2008 certification. All four manufacturing factories are AAR certified and approved
Overview
Key Products and Service
The Wagons Business is the leading supplier of New Build, Upgrade and Remanufacturing services for Wagons Africa. The Business consists of 4 Major factories for new builds and re-manufacturing, and maintenance depots across South Africa
The Wagons Business offers:
Manufacturing of all types of freight wagons cars
Maintenance & Remanufacturing of all types of freight and infrastructures wagons cars cars
Manufacturing and remanufacture of all types of intermodal solutions
TE Wagons Offerings
Ports Business
Port Business – Offers engineering and manufacturing services to various Ports
Overview
Key Products and Service
General Information
The Port Business offers engineering services to South African Ports and Harbours which includes maintenance, new build, remanufacture and repairs of ports and marine related equipment. The Port Business operates primarily from the Durban main centre and in various client premises to ensure on-site availability and support services
The Port Business offers:
Manufacturing of Bath tub trailers, Skips and Containers
Remanufacture of Dolley Trailers, Ship-to-Shore Carriers and Hoppers
Repair of Grabs, Skips and Electrical Motors
Maintenance of Haulers and Straddle Carriers
The business has capacity to manufacture 176 bath tub trailers and refurbish 88 straddle carriers per annum
The business has 47 employees and is in a process of filling 81 additional positions
Operational efficiency is measured through adherence to production delivery plan, number non-conformances reports, degree of operational waste in the process and customer satisfaction levels
TRANSNET ENGINEERING: MANUFACTURING –Coach Business
Coach Business
Coach Business product offerings
Overview
Key Products and Service
The Coach Business is responsible for the Maintenance, Remanufacture and Upgrades of both motor and trailer coach wagons. The business operates out of three of TE’s manufacturing centres (Durban, Salt River and Koedoespoort) while conducting maintenance on coaches out of three depots country wide
The Coach Business offers: Upgrading and overhauls of the
10M5 and 10M3 motor and trailer coach wagons
Upgrading and overhauling of specialised coach wagons (health services and luxury transport)
Heavy and Light maintenance of specialised motor and trailer coaches
Manufacturing of several components for coach wagons ranging from bogies to car bodies, amongst others
1 Based on current single shift, capacity increases significantly through inclusion of additional working shifts
General Information
The Coach Business has the capacity to upgrade and overhaul 751 motor coaches and 2251 trailer coaches annually
All facilities are ISO 9001:2008 certified
Responsible for the Phelophepa Health Train, the most advanced basic health train in the world
TE’s Coach Business facilities are strategically located to service the needs of the local and international coach market (in terms of maintenance, repairs and overhauls)
46
COACH BUSINESS
Manufacture, Repairs, Upgrade and
Maintains Railway Cars
Versatile & Cost Effective Solutions:
Design, build, customise
OEM
World class manufacturing
COE: Subcomponents manufacturing
internally centralized (in progress) (Kds)
Astonishingly versatile, this business has built everything from PRASA’s suburban commuter coaches to kitchen, sleeper, sitter, conference, baggage, dining cars, road knowledge (driver
training)and Business Express coaches catering for the business class/tourist.
STATUS - COACHES
Results Announcement 2016
STATUS - COACHES
CURRENT STATUS: The Coaches business has the capacity repairs, remanufacture, upgrades and manufactures more than 250 to 300 mainline coaches and suburban electric coaches annually. Coach business has also the capability to maintain all the different type of coaches’ fleet it manufactures.
1990 1950 - 1990 1948 1890 1860
Upgrade of 5M2A Motor Coaches to Micro processor traction control
The 4M series Motor in South Aftrica
The 3M series Motor in South Aftrica with two Pantographs
The Motor Coach in South Aftrica
The First Passenger in South Africa
2016 2006 2007 2002 1997
Develop and build first Unibody Main line Coach
Design and Build the 10M5 Modular design 3CR12 Body Structure
Upgrade of Shosholoza Myle to Premier Class
Upgrade of 5M2A chopper control to 10M3 Modular body structure to accomadate the latest Chopper upgrade (water cooled)
Upgrade of standard 5M2A Motor Coaches & Plain Trailers to 10M standard
Contents
1 2 Transnet Engineering History, Capacity & Capabilities
TE’s Centre of Excellence 3 Locomotive Build Program (TE Scope) 4 TAL – Trans-Africa Locomotive 5
TE’s Response to questions directly impacting its existence
LC Challenges and Engagements with DTI 6
Locomotive Build Program
1064 TE Scope of Work
50
Note: TE overall Scope = 15% Material = 45% of which local suppliers are used Assembly and Labour Cost = 55%
Description Volume TE Subcontracting
Scope % Facility
Locomotives Build Projects 1064 15%
Class 22E Electric Locomotives 359 17% Koedoespoort
Class 23E Electric Locomotives 240 6% Durban
Class 44D Diesel Locomotives 233 17% Koedoespoort
Class 45D Diesel Locomotives 232 22% Durban
Locomotive New Build Sales (incl. 1,064) relative to total TE sales
10,177 8,535
3,641 526
3,115
2016/17 2015/16
10,734 557 9,380
846
2017/18 Actual Year to Date (5 months)
Locomotive New Builds
Other TE sales
Ran
d M
illio
ns
%
95% 91% 86%
14%100%
2017/18 Actual Year to Date (5 months)
2016/17
5%
2015/16
9%
TE Spend with Local Industry
Vendor Name 2014 Spend 2015 Spend 2016 Spend Black Ownership Black Woman Ownership Commodity
512123 SCAW SOUTH AFRICA R 580 024 891.11 R 558 096 383.41 R 194 726 905.41 73.2% 21.5% Wheels , Couplers and Bogies
525943 GE SOUTH AFRICA TECHNOLOGIES R 363 160 463.44 R 293 393 770.27 R 352 977 836.19 44.7% 21.9% Various Locomotive Parts
520277 DCD GROUP R 343 255 786.53 R 206 577 675.50 8 582 714.28R 49.2% 7.4% Brake Blocks, Gibson and rings and Tyres
527648 TIMKEN SOUTH AFRICA R 226 047 354.05 R 221 176 964.10 R 204 283 627.17 0.0% 0.0% Bearings
524940 GLOBAL RAILWAY AFRICA R 203 946 027.00 R 0.00 R 0.00 51.0% 0.0% Bogie Castings
513323 SWASAP R 189 467 748.23 R 157 692 759.95 R 23 849 900.08 26.8% 7.8% Axles
526482 SCHENKER SOUTH AFRICA R 172 919 495.47 R 85 532 057.87 R 29 722 187.43 25.0% 6.9% Shipping
513030 KNORR BREMSE SA R 152 531 400.20 R 130 004 661.94 R 101 021 584.24 25.0% 15.0% Braking systems
527525 REELIN INVESTMENTS R 108 620 240.42 R 128 937 744.06 R 69 857 405.05 100.0% 60.0% Bearings
514259 ACTOM TRANSPORT EQUIPMENT AND PROJE R 100 599 556.94 R 34 708 603.66 15 125 722.43R 36.3% 10.4% Various Electrical Locomotive parts
520381 CONBRAKO R 85 293 810.20 R 64 926 664.01 R 29 187 688.15 0.0% 0.0% Valves
512267 AVENG TRIDENT STEEL R 66 163 285.66 R 42 158 090.83 R 48 323 089.49 67.9% 19.4% Steel
524890 AFRI GUARD R 63 965 536.94 R 65 608 548.15 R 23 969 339.96 51.0% 0.0% Security Services
509529 AFRICAN OXYGEN R 63 288 906.92 R 64 944 403.09 R 37 669 832.93 65.0% 13.2% Gas and Welding Wire
521428 MICROELETTRICA POWER R 57 740 517.00 R 31 495 103.73 13 405 443.13R 26.0% 15.0% Various Electrical Locomotive parts
525315 AMERICAN EXPRESS CARD R 42 734 791.96 R 54 208 891.87 R 34 070 673.53 37.6% 17.4% Travel
524514 ACTON REPAIR SERVICES R 38 251 536.05 20 004 035.70R 11 109 820.08R 30.2% 9.8% Various Electrical Locomotive parts
518804 AJM SALES AND SERVICES R 37 489 334.37 R 21 201 324.68 14 170 175.62R 51.0% 0.0% Cranes
506559 KANSAI PLASCON R 37 172 471.36 R 27 497 706.97 R 32 780 659.89 32.2% 9.7% Paint
510093 REID AND MITCHELL R 35 966 524.64 R 41 449 136.73 14 111 310.64R 36.3% 10.4% Various Locomotive parts
521990 FUMANANG ENTREPRENEURIAL PROMOTIONS R 35 900 038.89 R 70 840 545.06 8 805 367.04R 51.0% 0.0% Machinery and Equipment
517911 NUSTART HOLDINGS R 29 761 420.72 R 45 447 266.06 R 24 405 186.76 90.0% 11.4% Windows and Doors
517805 BENKLING R 29 101 678.41 R 31 550 545.24 13 117 195.25R 51.0% 51.0% Couplers
520214 VANRAIL SUPPLIES R 27 333 209.84 R 24 353 359.81 R 16 568 846.17 51.0% 0.0% Valves
23E BT Fabrication Line
53
TE SCOPE
Bogie material
Bogie Fabrication
Bogie Assembly material
Locomotive assembly
Locomotive test and commission
23E BT Assembly Line
54
22E CSR Cab Manufacturing
Cab Left Sidewall Cab Front Sidewall
Cab Rear Sidewall welding
Jig for Building the Main cab of the carbody, where they combine all sides , front and rear walls to make a cab
Dressing, Cleaning and final QC approval before fitting on the carbody frame.
send to Loco
Fitting and Complete Welding the Cab on the jig
Cab Rear Sidewall preparation
22E CSR Carbody Fabrication and Manufacturing
Aligning and welding of side frame, bolster and traction beam
Underframe components
manufacturing
Underframe floor fitting and
complete welding
Carbody straightening using gas flame heating torch
Carbody dressing after side
straightening and installation
Final weld and QC Approval
22E CSR Manufacturing and Assembly Line
57
TE SCOPE
Carbody material
Carbody fabrication
Bogie material
Bogie Fabrication
Bogie Assembly material
Locomotive assembly material
Locomotive assembly
Locomotive test and commission
22E CSR Car Body Fabrication
58
22E CSR Bogies Fabrication
Side rail alignment on jigs and after they go for welding in a rotator.
Weld H-Frame on the jig with side rails and all transoms
1.Measuring bogie and send to oven 2. measure bogie before sending to machining from oven.
3. measure bogie after machining delivery and send to Loco if approved by QC.
Traction transom welding on the jig
Machining of bogies after complete welding
Oven for bogie were heat treatment process is done
44D GE Scope
60
TE SCOPE
Platform material
Platform fabrication
Bogie material
Bogie Fabrication
Bogie Assembly material
Traction motor assembly
Wheel assembly
Combo assembly
Aux cab fabrication
Aux cab assemble and test
CA1 fabrication
CA1 assemble and test
Locomotive assembly material
Locomotive assembly
Locomotive test and commission
61
44D GE CA1 Fabrication and Assembly
44D GE Auxcab Fabrication
Roof Jig assembly, bulkheads, filter box and centre box
Floor assembling
Door frame assembly of the aux cab
final Assembly jig Aux cab is being assembled from all other parts assembled above.
cleaning, do manus and water test of the aux
cab
Final paint cleaning and send to loco after Quality
control approval
send to Loco
44D GE Platform Fabrication
I-Beam manufacturing (I-Beam manufacturing from
assembling to final weld)
Aligning of I-beams and fit traction pin, side bolsters, walkways, endplates and fuel tank
Final welding. fit sump sheets, Engine mounting, Top
plates, small parts and complete welding the platform.
GE Loco Assembly
45D CNR Scope
65
TE SCOPE
Platform material
Platform fabrication
Bogie material
Bogie Fabrication
Bogie Assembly material
All cab fabrication
Traction motor assembly
Combo assembly
Engine Alt combo assembly
Locomotive assembly material
Locomotive assembly
Locomotive test and commission
45D CNR- Line setup and Bogie Fabrication
66
45D CNR Line Set up
67
Contents
1 2 Transnet Engineering History, Capacity & Capabilities
TE’s Centre of Excellence 3 Locomotive Build Program (TE Scope) 4 TAL – Trans-Africa Locomotive 5
TE’s Response to questions directly impacting its existence
LC Challenges and Engagements with DTI 6
Trans-Africa Locomotive
AN UNIQUE AFRICAN SOLUTION BY TRANSNET ENGINEERING
• A diesel locomotive designed and build by Transnet Engineering
• Branch line / shunting locomotive which can also be used as a mainline locomotive in neighbouring countries
where rails can only accommodate low axle loads (16 ton / axle)
• Rail gauge compatible with that of African countries using cape gage lines (1067mm)
• Built to negotiate sharp curves
• Built to withstand dust African conditions
• Good visibility in both direction of travel without need to turn the locomotive around
• Can operate both air brakes as well as older vacuum brake system still in use in many parts of Africa
• Built for ease of maintenance: removable hoods, doors lift off hinges, etc.
• Ideal for passenger trains due to low noise and ability to provide power to the train from the locomotive
• Copper power cables not visible from outside (eliminating the theft problem)
TRANSNET ENGINEERING’S TAL DEVELOPMENT
• Designed and built using TE’S Research and Development capability:
o Design a locomotive “train control monitoring system” including:
Hardware
Software
o Testing the locomotive according to international standards
• TAL is not in competition with locomotives currently built by various OEM’S for the 1064 project
• 1064 locomotives are all “heavy haul” locomotives
• TAL’S focus is a light axle load, cape gauge, niche market largely ignored by international OEMS
• Over time TE wishes to expand the TAL into a family locomotives derivatives largely dictated by the South African
and African Market needs
BUILDING OF LOCOMOTIVE UNDERFRAME AND
COMPONENTS
MANUFACTURING OF UNDERFRAME
TRAIN CONTROL MONITORING SYSTEM DESIGNED AND BUILT IN HOUSE
CONTROL SYSTEM – HARDWARE & DRIVERS DISPLAY UNIT
STIMULATING THE INDUSTRY
BRAKE RESISTOR
RADIATOR, RESERVOIRS
& PIPING
ENGINE & MUFFLER TRACTION CONVERTER TRACTION MOTOR BOGIE GEAR
BRAKE SYSTEM
GEARBOX & WHEELSET
CONTROL SYSTEM AUXILIARY EQUIPMENT
VENTILATION BLOWERS
THE TRANS AFRICA LOCOMOTIVE
Contents
1 2 Transnet Engineering History, Capacity & Capabilities
TE’s Centre of Excellence 3 Locomotive Build Program (TE Scope) 4 TAL – Trans-Africa Locomotive 5
TE’s Response to Parliamentary questions
LC Challenges and Engagements with DTI 6
Local Content engagements and resolutions
• TE is in constant engagements with the dti to address local content related challenges
• Some of the local content challenges include the following
• Number of Request for Quotations issued to the market for designated items. • 3 quotes system an issue for suppliers especially if they are repetitive and the
parts are designated. • Turnaround times for exemptions applications too long resulting in tender closing
date extensions • Suppliers interpretation of Local procurement vs Localization vs Local Content • Difficult to localise on the legacy fleet parts as these are rolling stock fleets to be
phased off in the next few years • Difficulties to forecast, especially on unscheduled maintenance based on the
nature of this procurement activity. • Interpretation challenges on the ramp-up period from the Instruction Note.
• Based on the engagements that the resolutions below have been agreed with dti
• Consolidation of demand to avoid numerous RFQs on designated components
– which Transnet has done. We have a number of long term events in the pipeline which will be supplemented by short contracts as agreed
• Split of legacy vs new fleet – Transnet has done the split. • Unscheduled maintenance – Transnet has highlighted the challenge of
unscheduled maintenance which is unavoidable when operating rolling stock. That will require much quicker response to bring assets back into service, but difficult to predict compared to scheduled maintenance.
• Turnaround times – Agreed 15 working with dti is not working for TE, however it is difficult to measure as they are many variables affecting this (capacity to understand the market)
Legacy fleet vs new fleet
CHALLENGES
TE required a complete exemption regarding staged locomotives and b-fleet locomotive as the the red legacy fleet that will be non operation beyond 2021 and the green legacy fleet that will still remain active.
Fleet
Purchase Date/ Upgrade Date
Av AGE
20
17
/1
8
20
18
/1
9
20
19
/2
0
20
20
/2
1
20
21
/2
2
20
22
/2
3
20
23
/2
4
B-Fleet Declaration
GE34D 1975 42 180
150 104 50 25 0 0 Declare B-Fleet as at Apr 2019 - all major program stopped
GM34D 1975 42 81 50 25 0 0 0 0 Declare B-Fleet as at Apr 2018- all major program stopped
7E 1978 39 0 0 0 0 0 0 0 Declare B-Fleet as at Apr 2016- all major program stopped
7E1 1980 37 40 20 0 0 0 0 0 Declare B-Fleet as at Apr 2016- all major program stopped
9E 1980 37 0 0 0 0 0 0 0 Fleet Staged
GM37D 1982 35 50 30 0 0 0 0 0 Declare B-Fleet as at Apr 2017- all major program stopped
7E2 1982 35 20 0 0 0 0 0 0 Declare B-Fleet as at Apr 2016- all major program stopped
7E3 1984 33 30 20 0 0 0 0 0 Declare B-Fleet as at Apr 2016- all major program stopped
7E4 1984 33 10 10 0 0 0 0 0 Declare B-Fleet as at Apr 2016- all major program stopped
8E 1984 33 15 0 0 0 0 0 0 Declare B-Fleet as at Apr 2015- all major program stopped
11E 1986 31 20 0 0 0 0 0 0 Declare B-Fleet as at Apr 2016- all major program stopped
10E/10E2 1987 30 54 54 25 0 0 0 0
Declare B-Fleet as at Apr 2016- all major program stopped
10E1 1989 28 80 80 50 20 0 0 0
Declare B-Fleet as at Apr 2016- all major program stopped
38EDE 1993 24 10 6 0 0 0 0 0 Declare B-Fleet as at Apr 2017- all major program stopped
18E 2007 10 650 650 600 550 500 450 400 Declare portion as B-Fleet as at Apr 2020- all major program stopped
NB: though the 18E is on the green legacy fleet, it will be gradually phased out once the new BT locomotives are being bought in service
Thank You