dpe property project presentation to the parliamentary portfolio committee on public enterprises 21...
TRANSCRIPT
DPE Property Project
Presentation to the Parliamentary Portfolio Committee on Public
Enterprises21 June 2006
Overview of Presentation
• Background• Process• Non-core Property breakdown by SOE• Geographical spread of SOE non-core properties• Properties for Sale: B-BBEE Guidelines
– Promoting B-BBEE– Promoting Local Benefit
• Properties for Development– Property Development Process– Property Development Vehicle
Background• DPE sole shareholder for 7 SOE.• SOE are in a process of focusing on core business, divesting
themselves of assets and enterprises that are non-core. • Property project identifies optimal ways to dispose of non-core
property. • Non-core property holdings have been classified as either commercial
or non-commercial properties. • Properties for development can optimise value for SOE and promote
socio-economic development impact.
Property PortfolioProperty Portfolio
CoreCore
Non-coreNon-core
Disposal to GovernmentDisposal to Government
Housing Housing
SaleSale
Non-Commercial
Non-Commercial
CommercialCommercial
DevelopmentDevelopment
Process• Cabinet Memo on the framework for the disposal of non-
core property has been approved.• Submission of Cab Memo on B-BBEE guidelines for
consideration.• PFMA
– Approval granted for Transnet’s non-core list.– Partial PFMA approval granted to Denel.– Transactions will be subject to approval by the Minister
in terms of S54(2).• Properties for Sale
– Competitive process with a set of clearly defined steps in the transaction process.
– B-BBEE Guidelines apply.– Local benefits.
Process
• Disposal to government and consultation with government departments:– Bilateral with Department of Housing is underway.– Bilateral with Department of Education is imminent.– Discussions with Land Affairs have started.
• Once disposals to government departments have been finalised, SOE packaging will proceed followed by disposal to the public.
• Provincial roadshows and communication strategy to raise awareness of the disposals process to alert people to potential purchasing opportunities at a local level.
• Properties for development to be developed under auspices of SPV.
Non-Core Property Share by SOE
Denel20%
Eskom13%
SAA0%
Transnet67%
Transnet
Denel
Eskom
SAA
Spread of SOE Non-Core PropertiesLegend
Number of Non-Core Properties per Location
1 - 2
3 - 6
7 - 10
11 - 15
16 - 23
SA railway
SA Provinces
Eastern Cape
Free State
Gauteng
KwaZulu-Natal
Lesotho
Mpumalanga
North West
Northern Cape
Northern Province
Western Cape
30 March 2006
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Bloemfontein
Touwsrivier
De Doorns
Kimberley
Breyton
Upington
De Aar
Vryheid
PECoega
Durban
Pretoria
Saldanha
Cape Town
Mossel Bay
East London
Beit Bridge
Richards Bay
Johannesburg
Properties for Sale: B-BBEE Guidelines
• Originally, collaborated with DPW on a Joint Disposal Strategy and B-BBEE Guidelines, but resubmission of latest Cab Memo focuses on B-BBEE Guidelines which are applicable to SOE only.
• B-BBEE guidelines are based on the dti Codes of Good Practice and the Property Sector Charter.
• Applicable to properties for sale.• Replicability of these guidelines for properties for
development yet to be determined.
Promoting B-BBEE through Disposals
BEE Status Qualification Recognition Level
Level One Contributor ≥100 points on the Generic Scorecard 135%
Level Two Contributor ≥85 but <100 points on the Generic Scorecard
125%
Level Three Contributor ≥75 but <85 on the Generic Scorecard 110%
Level Four Contributor ≥65 but <75 on the Generic Scorecard 100%
Level Five Contributor ≥55 but <65 on the Generic Scorecard 80%
Level Six Contributor ≥45 but <55 on the Generic Scorecard 60%
Level Seven Contributor ≥40 but <45 on the Generic Scorecard 50%
Level Eight Contributor ≥30 but <40 on the Generic Scorecard 10%
Non-Compliant Contributor <30 on the Generic Scorecard 0%
Where any enterprise is in excess of 50% owned by black people and has achieved the full 7 points under net equity interest, the BEE Status of that Enterprise will be at the level immediately above the level at which its actual score is evaluated.
Promoting B-BBEE
• Overall target:– A minimum of 70% of all asset disposals by value (other than those
for transfer or housing) by each SOE must be to entities with a BBBEE status of at least Level 4, i.e. entities with scorecard points equal to and above 65%.
• BEE thresholds have been set for different property values.• DPE considers that local benefit and economic
development are functional criteria against which bids should be measured - these have been built into the adjudication criteria.
• Each SOE should report quarterly to the DPE on performance against the targets, based on the BBBEE status table.
Properties for Development
• JOHANNESBURG: Newtown North PrecinctSpatial development framework and business case complete, possible JV
• JOHANNESBURG: International AirportProperty strategy complete, land transactions with ACSA in process
• JOHANNESBURG: Kaserne / City-Deep Inland PortScoping study completed
• DURBAN: Non-port related sitesVictoria Embankment and NMR development projects underway
• EAST LONDON CBDDevelopment framework completed, land transfer to District council and Buffalo City Development Agency under consideration
• PORT ELIZABETH: HarbourBusiness case for relocation and harbour development completed, Transnet capital projects reviewing decision by end July 06.
• CAPE TOWN: Culemborg Black-RiverProperties for development identified, negotiations on development framework and bulk infrastructure underway.
Provision of infrastructure services
Construction of improvements
Property Development Process
PROFESSIONFEESPROJECTMANAGELANDENABLECOSTS
Property in current transport usezoning, improvements & infrastructure to support historic use
DEVELOPED PROPERTY TO END USERDEVELOPED PROPERTY TO END USER
Acquisition of alternative land use rights development rights to support mixed alternative land use
Marketresearch
Viabilitystudy
ContextPrecinctPlan
TownPlanning
Developframework
RezoneSurvey
PROPERTYHOLDINGCOSTMANAGEFEE
ELECTRICSEWERAGEWATERROADSSTORMTELECOM
BRICKSMORTORCONSTRUCTION
MARKETINGSALESLEASINGADVERTISING
TEUs at City Deep
0200000400000600000800000
10000001200000140000016000001800000
Year
TE
U
Low
Middle
High
CSIR for City of Johannesburg Economic Development Unit, June 2004
Container throughput to double in 10 years
Container Growth Demand
Land required at City Deep (ha)
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
2012
2015
2018
Year
ha
Low
Middle
High
CSIR for City of Johannesburg Economic Development Unit, June 2004
Projected Demand for Land
DURBAN
GAUTENG PRETCON
SENTRARAND
CITY DEEP
DURBAN PORT
BAYHEAD
KZN Inland Terminal – e.g. Cato Ridge
ERMELO
WITBANK
KOMATIPOORTMAPUTO
RICHARDS BAY
Coal-link export line, dual electrified 25KVA AC, also carries general freight
Electrified 3KV DC
Electrified 3 KV DC
Non- Electrified
Non Electrified
Durban Gauteng Spoornet mainline service
Dual Electrified 3 KV DC
Current - Approx 25 to 30 trains per day in each direction. 5 to 7 Container trains per day in each direction.Operating at less than 40% of theoretical capacity
IMEX Intermodal service, 1100 wagons, 247 000 teu’s pa = average 6,4 day wagon turnaround, 5 to 8 day container transit time
Proposed- long trains to Sentra rand then short block train diesel loco shuttle to Kaserne and city deep – direct to terminals
Durban Gauteng Road Freight Service
Congestion, road safety and environmental issues
Door to door transit time 2 days
Proposal: Sentra Rand Marshalling yard, Future Inter-modal Terminal
Proposal: Diesel shuttle rail service, Sentra Rand - City Deep
Proposed -Block train Spoornet service to inland port, shuttle diesel rail service to Durban Port. Decreased Spoornet wagon turnaround, decreased costs
Future Road freight terminal
Proposal: City Deep Inter-modal upgrade and re-planning.
Schematic of Corridor
KC-D Action Plan
• Improve operational efficiencies by 2014 - reduce wagon turnaround time from 6 to 2 days.
• Design rail operating system and layout of KC-D block train marshalling and dispatch yard to service container terminals and warehousing facilities.
• Identify container terminals for possible concession, development and service provision.
• Undertake internal high level layout design and establish potential viability and industrial land value.
• Identify town planning, infrastructure and service requirement to maximise land values and operational efficiencies.
• Programme phasing of rail service improvement, system upgrading, marketing and development.
PMG note: map not included, please email [email protected]
Durban
• Joint NPA-eThekwini call for proposals on Victoria Embankment.
• Project preparation and excision of NMR site from Spoornet as part of City Sports Precinct for 2010.
Port Elizabeth: Manganese Ore & Fuel Reservoir
PMG note: map not included, please email [email protected]
Transport Corridor approaching Cape Town
PMG note: map not included, please email [email protected]
CAPE TOWNCAPE TOWN
Transnet propertyTransnet property
Property Development Vehicle
• The coordinated development of the key property projects needs overall coordination under a single property development vehicle.
• A model has been designed and is under consideration.
• Key functions to be performed:– Asset management– Development management– Property management– Compliance management
Property Development Vehicle
Guiding principles that have informed the proposed institutional arrangements:
• Decision making must be fair, transparent and certain
• The proposed institutional arrangements must:– Set out defined reporting lines and governance
structure.– Be commercially viable and sustainable.– Ensure public sector oversight, participation and
representation.– Avoid duplication of capacity by utilising existing public
sector SOE capacities.– Contribute to transformation of the property sector.