MCLI/TRANSPORT FORUM SIG

04 FEBRUARY 2016

UPDATE ON TRANSPORT

CORRIDORS

1

Slide 2

PROBLEM STATEMENT

“Transport is the heartbeat of the South African economy” and the fabric ofour social-economic development.

Transportation, in general, in RSA is characterized and riddled with both intra andinter modal inherited and/or acquired problems. For example, the uncontrolleddeterioration of rail services, road infrastructure maintenance (potholes) andinstitutional capacity deficiencies in the sector. Thus:

• Fragmented responsibility for multi-modal transport systems planning,operation and regulation;

• Escalating infrastructure capital and maintenance costs;

• Transport systems are not demand responsive;

• Poor land use/transport integrated planning in South Africa;

• Transport is inefficient in stimulating the economy optimally;

• Financing of transportation systems, is often inadequate; and

• Lack of up to date and accurate information.

PROBLEM STATEMENT 1

MINISTERIAL

DELIVERY AGREEMENT

• MTSF structured around following 14 outcomes: – Basic education– Long & healthy life style for all South Africans– All South African are & feel safe– Decent employment through inclusive growth– Skilled & capable workforce– Efficient, competitive & responsive economic infrastructure network – Vibrant, equitable, sustainable rural communities contributing towards food

security– Sustainable human settlements & improved quality of household life– Responsive, accountable, effective & efficient local government– Protect & enhance environmental assets & natural resources– Create a better S.A., Africa & World– Efficient, effective & developmental-orientated public service– Comprehensive, responsive & sustainable social protection system– Diverse, socially cohesive society with common national identity

PRIORITIES & ACTION PLANS FOR 5 YEARS

(2014-2019)

• Five sub-outcomes of MTSF:

– Regulation, funding & investment improved

– Reliable generation, transmission & distribution

– Maintenance, strategic expansion, operational efficiency, capacity & competitiveness of logistics & transport infrastructure

– Maintenance & supply of bulk water resources infrastructure

– Expansion, modernisation, access & affordability of information & communications infrastructure

NDP PRIORITIES

TRANSPORT RELATED SUB-OUTCOMES

Actions Ministers Responsible Indicators/measures 2019 MTSF Targets

Review of economic regulators(existing & potential)

Presidency, Economic Development, DPE,DOT

Establish STERCabinet & Parliament approval

Approval by Dec 2015Establish STER by Dec2016

Develop Private Sector Participation Framework for Ports & Rail

DOT supported by DPE

PSP Framework Framework by Dec 2014

SIP 1: Unlocking Northern Mineral Belt

DPE supported by DOT & PICC

2018/19

SIP 2: Dbn-FS-GautengCorridor

DOT & SANRAL N3 De Beers Pass (Harrismith Hub)

Commence construction 2015

SIP3: South Eastern Node & Corridor Development

DOT Mthatha Airport upgradeN2 Wild Coast

Complete Dec 2014

Commence 2014

MTSF SUB-OUTCOMES

TRANSPORT RELATED SUB-OUTCOMES

Actions Ministers Responsible Indicators/measures 2019 MTSF Targets

SIP7: Integrated Urban Space & Public Transport

PRASA, COGTA, DOT Implementation of Plans

Approval by Oct 2014

SIP17: Regional Integration

DPE supported by DOT & DMR working with PICC

Assessment of TKC 2018/19

Improve National Transport Planning in context of National Infrastructure Plan

DOTsupported by DPE, COGTA & PICC

N/A? 2018/19

Move some road freight to rail

DOT working with PICC

Develop & implement approved plan

Approved Plan by June 2015

Imrove & preserve national, provincial & local road infrastructure

DOT supported by COGTA working with PICC

Develop & implementation of plan

Cabinet approval by Dec 2014

MTSF SUB-OUTCOMES (Cont.)

PRIORITIES OF NINE

POINT PLAN

Priority Alignment/Support 9 PP

9

Agro-procesing value chain

(APAP)

IPAP Beneficiation

Branch-Lline Strategy

Harrismith Hub Framework

Port Tariff Structure.

Prasa Rail Manufactiring

Factory

Port Tariff Structure

Energy Ocean Economy Private Sector

Participation/Investment

Coal Haulage Cabotage Policy

Maritime Policy

Review of Merchant Shipping

Act.

Ministerial Directives for Port of

Ngqurha & Port of Port

Elizabeth (Operating License &

Manganese re-location)

Two vessels registered with

S.A. flag

Private Sector Participation

Framework.

SMME Review of role of SOEs Workplace Conflict

Branch Line Strategy Review NFLS

TRANSPORT CORRIDORS

Slide 11

Legend:

Important Freight and Passenger Corridors

Important Land Use Nodes

ORIGINS/DESTINATIONS: IMPORTANT TRANSPORT NODES,

PASSENGER AND FREIGHT CORRIDORS

SECRET

AVIATION

ACSA AIRPORTS

KING SHAKA

INTERNATIONAL

AIRPORT

EAST LONDON

AIRPORT

PORT ELIZABETH

INTERNATIONAL

AIRPORT

GEORGE

AIRPORT

CAPE TOWN

INTERNATIONAL

AIRPORT

ATLANTIC OCEAN

INDIAN OCEAN

UPINGTON

INTERNATIONAL

AIRPORT

O.R. TAMBO

INTERNATIONAL

AIRPORT

BLOEMFONTEIN

INTERNATIONAL

AIRPORT

KIMBERLEY

AIRPORT

SOUTH AFRICA

NAMIBIA

BOTSWANA

ZIMBABWE

MOZAMBIQUE

International airport

National airport

ACSA concessioned

airport

GAURULHOS

INTERNATIONAL

AIRPORT

BRAZIL

BOLIVIA

ARGENTINA

PERU

CHHATRAPATI

SHIVAJI

INTERNATIONAL

AIRPORT.

MUMBAI

INDIA

CHINA

NEPALPAKISTAN

AFGHANISTAN

SA ACSA NETWORK OF AIRPORTS

CAPE TOWN

INTERNATIONAL

KING SHAKA

INTERNATIONAL

O.R TAMBO

INTERNATIONAL

Port

Elizabeth

Upington

George

East

London

Kimberley

Bloemfontein

RAIL FREIGHT

RAIL INFRASTRUCTURE

Sishen

Saldanha

Cape Town

East London

Port Elizabeth

Mafikeng

Durban

Richards

Bay

Komatipoort

Messina

Johannesburg

Pretoria

Kimberley

Namibia

Botswana

Zimbabwe

Bloemfontein

Low Density2478 km

Infrequent service

No Service Lines

2432 km

High Density 9874 km

> 2m GTK/km

Light Density 5221 km

<2 m GTK/km

FREIGHT RAIL CHALLENGES

17

• Ever reducing core network• Investment backlog in network and rolling stock• Third party access to network• Operational Inefficiencies

• Varying network voltage/current

• Planning

• Absence of Rail Policy (Cabinet approved consultation)• Interim Rail Economic Regulatory Capacity established

PASSENGER RAIL

PRASA STRUCTURE

PRASA GROUP

PRASA

CRESINTERSITE

Asset INVESTMENTS

PRASA RAILAUTOPAX

PRASA

TECHNICAL

METRORAIL

(Commuter )SHOSHOLOZA MEYL

(Long Distance Pax )

City to City

Translux

Real Estate Asset Management

Station / Facilities Management Leverage investments on

Key Assets

CHALLENGES OF OUR RAILWAYS

• Railway infrastructure and technology has reached the end of its design lifespan

• Poor levels of reliability and predictability

• High costs of maintenance

• Failure to contribute to an efficient transport system

• Inability to support economic development

• Limited access to socio-economic opportunities for rural and urban poor

• Long - Distances

• Low – Densities

• Low - Incomes

20

Structural Viability

PASSENGER RAIL AGENCY OF SOUTH AFRICA (PRASA)

Strategic Issues

• Salvage current fleet

• Investing ± R4,6bn per annum

over the next 3 years

• Revival of key corridors and have

rail as back bone for public

transport

• Transform

• Reskilling

• Delivery of new locomotives in

2014

• 554 coach mordenised per year for

the next three years

• Establishment of Project

Implementation Management

Office (PIMO)

• Undertake feasibility studies on

devolution and NLTA

Strategic Observations

• PRASA is 8 years this year

• Grew its asset base from R7bn to

R33bn

• Modernization of the asset base

• Station Upgrade

• Asset restructuring

• Section 54 application

• Improvements in real estate portfolio

• Funding of Shosholoza Meyl

• Devolution

• Finalisation of the feasibility on Moloto

Rail Corridor

• Critical Skills

21

ROAD TRANSPORT

National Roads

Secondary Roads

Tertiary Roads

MAIN ROAD CATEGORIES IN SOUTH AFRICA

23TOP SECRET

• Road infrastructure Backlog

• R197 Billion

• Deteriorating Provincial and Municipal Road Infrastructure

• Provincial intervention (S’hamba Sonke)

• Municipal Intervention (None)

• This is the sphere with the worst road condition

• Intervention process began from Local Government & National Treasury

• Delays in project related approvals from environmental affairs, provinces etc.

• Inadequate law enforcement:

• Traffic rules

• Overloading by hauliers

• Driver behaviour – road safety

• Insufficient funding for timely upgrades and maintenance of the non-toll network

• Poor progress on SIP-1 and SIP-4 projects

• Insufficient high-level planning and co-ordination between inter-modal transport and the three spheres of Government

CHALLENGES

THE BIGGER TRANSPORT PICTURE (2)

• The importance of road transport in the South African economy is obvious when considering

that:

– In 2014 Road Freight accounted for 87 % of the total freight tonnage transported in South

Africa,

– 94 % of the 35 million daily motorised person trips recorded in South Africa, are road

based,

- Vehicle ownership doubled since 1994 (5 million to more

than 10 million)

• Draft Road Freight Strategy developed

PORTS AND

MARITIME

PORT NETWORK

• Implementation of the National Ports Act

• Establishment of a separate National Ports Authority independent from

Transnet

• Private Sector Participation

• Multi-year Tariff Regime

• Full time Tribunal

• Funding of the Ports Regulator

• SAMSA

• Approval by Treasury of SAMSA Tariff

• SAMSA survival

• Agulhas

• Role of DHET

CHALLENGES

• Railways– Green on Rail Policy consultations underway

– Interim Rail Economic Regulatory Capacity operational

– Single Transport Economic Regulator establishment underway

– Review of National Freight Logistics underway

– Rollout SIP2 Integrated Freight Plan to Maputo Corridor

• Passenger Railway

• Funding for new railway infrastructure (Rail Manufacturing Factory intended to be launch by Minister in February 2016)

• Additional Funding required for rolling stock

• Freight Rail

• Need for private sector participation

• Access to network

• Increased investment in both infrastructure and rolling stock

• Aviation

• Establishment of a permanent regulatory body

• Establishment of an independent Accident and Incidents Investigation Board

• Maritime

• Establishment and separation of Transnet National Ports Authority (Ports Act 2005)

• Extension of lisence for Port of Ngurha & relocation of Manganese Terminal from PE to Ngqurha

• Investment in Port and Shipping infrastructure (Two Ships registered, 5 in 2016/17 & 9 in 2018/19)

• Economic Viability Study completed for Durban Dig-Out Port (Concerssion/Funding Model oustanding then Ministerial Promulgation)

• Port Nollorth Upgrade & feasibility for Boegoebaai underway

• Roads

• Establishment of an Intergovermental Team looking at Municipal road infrastructure

• Focus on Road Safety through enforcement (Panel of Experts)

• Focus on road infrastructure maintenance funding

• Road Freight Strategy development underway

STRATEGIC INTERVENTIONS

THE END