Ipad Presentation: TFR Operation in SADC Countries

2

Presentation Layout

• Overview of Transnet Freight Rail

• Role Played in SADC

• Infrastructure & Transport Challenges

• Elements of Vision 2025

• Strategy Benefit

• Critical Success factor

• Conclusion

3

Under our new organisational structure, Spoornet has been renamed Transnet Freight Rail

4

Transnet Freight Rail’s Position within the World

Country Network Km Activity

United States 194,731 km mainline routes

Russia 87,157 km

China 71,600 km

India 63,518 km (15,009 km electrified)

Canada 49,422 km

Germany 45,514 km (21,000 km electrified)

Au stralia 41,588 km (4,612 km electrified)

Argentina 34,463 km (168 km electrified)

France 32,682 km

Brazil 31,543 km (1,981 km electrified)

Poland 23,420 km

Japan 23,168 km (15,995 km electrified)

Ukraine 22,473 km

South Africa 20,824 km (9, 570 km electrified)

Mexico 19,510 km

Italy 19,493 km

United Kingdom 16,893 km

5

Transnet Freight Rail’s Position within Africa

South Africa 20,824 km

Sudan 5,978 km

Egypt 5,105 km

DRC 4,772 km

Algeria 3,973 km

Tanzania 3,690 km

Nigeria 3,557 km

Mozambique 3,123 km

Zimbabwe 3,077 km

Kenya 2,778 km

Angola 2,761 km

Namibia 2,382 km

Zambia 2,173 km

Tunisia 2,152 km

Morocco 1,907 km

Uganda 1,241 km

Guinea 1,115 km

Country Network Km Activity

80% of SADC route kilometres

6

Who is TFR

Transnet Freight Rail:

� Owns and maintains a network of +20 500 route km (22 000 track km) connected

to ports and the rail networks of neighbouring countries

� Operates 550 – 700 trains per day (substantially less than the average over

weekends)

� Serves 450 key accounts

� Conveys 98 commodity groups over more than 4 000 origin – destination

combinations

� Transports 3.5 – 4mt per week

1 862 Locomotives 73 000 Wagons22 307 Employees178 million tons pa

7

TFR: Market Sectors

Export Mining

Mining

Manufacturing

Containers &Automotive

• Manganese• Non-Ferrous• Mineral Mining• Coal• Granite• Chrome

• Coal• Iron Ore

• Containers

• Automotive

• Industrial

• Chemicals• Fuel & Petroleum• Fertilizer• Cement & Lime• Iron Steel & Scrap

• Grain, Stockfeed & Milling

• Timber & related• FMCG

Agriculture & Forestry

8

NORTH AMERICA

MIDDLEEAST

ASIA EUROPE LATIN

AMERICA

The new Union Of International Railways Regional organization

AFRICA

Collaboration between South, India and France

• TFR is a member of UIC-Africa

• Satellite office has just moved from SA to Tunisia end of 2010

9

Regional Involvement: SARA, COMESA

The alignment / integration of UIC with other organisations like SARA which TFR is a member of will bring more value to many SADC members.

The strategy going forward must work towards encouraging the alignment, the net effect to TFR and the region will be the improvement of volume growthand capabilities to move it.

10

Corridors – important Union of African Railways initiatives

Main Corridors (Les grands corridors)Source: UAR,2001

Transportutvikling AS – September 2007

Railways

Legends

No railways

ixx

Corridors:

i: Corridor North

ii: Corridor North -East

iii: Corridor North -East- West

iv: Corridor East-South

v1: Corridor East -Center

v2: Corridor East-Center

vi: Corridor West-Center

vii: Corridor South –West

viii: Corridor Center-South

Ix: Corridor North-West

X: Corridor North -Center-South

Radials:

1: Libya-Namibia

2: Senegal-Djibouti

3: (Sudan) Ethiopia-R.O.C./Tanzania

i

v1

ii

iii

iv

v2

vi

vii

viii

-1

2

3

-

11

MarketAdaptation

MarketMarketAdaptationAdaptation

SkillsDevelopment

SkillsSkillsDevelopmentDevelopment

Policy Frameworks

Policy Policy FrameworksFrameworks

Private sectorparticipation

Private sectorPrivate sectorparticipationparticipation

Modal Co-operation

Modal Modal CoCo--operationoperation

OperationalEfficiency

OperationalOperationalEfficiencyEfficiency

RegionalInter-

connectivity

RegionalRegionalInterInter --

connectivityconnectivity

InvestmentInvestmentInvestment

Vision2025

Elements of an Africa 2025 Transport Vision:‘More Rail for Africa’

12

SADAC Benefit from Vision 2025

•Reliable, Safe, Sustainable Scheduled Railway

•Point to Point Service Delivery

•No frills, Low Cost and Efficient

•Focus on chosen corridors (SA and SADC)

•Enable Multiple Rail Operators

• Enable Feeder Line Concessions

• Relinquish marginal lines

Rail Industry Environment

Efficiency Performance

13

Mad

agas

car

Strategic Rail corridors in SADC

Strategic Corridors

East-WestConnectivity

Mal aw

i

Zambia

BotswanaNamibia

South Africa

Moz

ambi

que

United Republic of Tanzania

Democratic Republic of Congo

Zimbabwe

Angola

Swaziland

SADAC must focuses on integration of strategic

corridors through integrated rail operations with Southern African Railways to maximise

Infrastructure

SADAC must focuses on integration of strategic

corridors through integrated rail operations with Southern African Railways to maximise

Infrastructure

60% of Mineral Deposits in Southern Africa

60% of Mineral Deposits in Southern Africa

14

Ma la w

i

Zambia

Botswana

Namibia

South Africa

Moc

ambi

que

United Republic of Tanzania

Democratic Republic of Congo

Zimbabwe

Angola

Swaziland

Ma la w

i

Zambia

Botswana

Namibia

South Africa

Moc

ambi

que

United Republic of Tanzania

Democratic Republic of Congo

Zimbabwe

Angola

Swaziland

Mauritius

SADC Growth

GDP Growth2005 – 4.8; 2006 –

5.10Corridor Market

GDP Growth2005 – 7.0; 2006 – 7.0

Corridor MarketCopper, Sulphur &

Diesel

GDP Growth2005 - 6.5; 2006 – 7.0

Corridor MarketContainers

GDP Growth2005 – 7.3; 2006 – 6.5

Corridor MarketCoal, Sugar & Maize

GDP Growth2005 – 2.0; 2006 – 1.7

Corridor MarketAnthracite, Pulpwood

GDP Growth2005 – 5.0; 2006 – 5.0

Corridor MarketSulphuric Acid, Diesel,

Copper & Sugar

GDP Growth2005 – 4.2; 2006 – 3.5

Corridor MarketCement, Petrol,

Diesel, & Sodium Carbonite

GDP Growth2005 – -1.6; 2006 – 0

Corridor MarketFerrochrome, Coke,

granite, Petrol & Diesel

GDP Growth2005 – 13.5;2006 –

24.5Corridor Market

GDP Growth2005 – 3.6; 2006 – 3.8

Corridor MarketZinc, Cement & Maize

GDP Growth2005 – 4.0; 2006 – 3.5

15

In Africa- Rail is a strategic resource

USE IT WELL

� Provides time and place utility

� Lever for competitiveness

� Lever for economic growth & development

� Lever to connect industrial heartlands to global trade

� Rail is the transport

� backbone

� 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%

16

Global Customer Requirements for Rail

� Heightened pressure for world-class competitiveness

� Efficient rail is a competitive advantage for customers to get product to market – 5 “R’s” of Rail:

� Right Place

� Right Time

� Right Quantity

� Right Cost

� Right Condition

Rail is an integral part of the total supply chainrail operators in Africa must think outside the ‘rail’ b ox

17

� Traffic Congestion around ports

� Missing links or connectivity

� Poor trade partnership

� Lack of Connectivity and integration with Ports

� Lack of funds in financing

� Poor infrastructure and Rolling stock

� Lack of human development

Rail / Road and Port Issues

18

Transit corridors can be important, not only for transit

Developing the hinterland

19

Drivers of Rail freight growth

Collaboration• Share real-time data with key customers,

suppliers and partners• Align individuals and organizations• Standardize processes and practices

Optimization• Implement new tools and processes

• Eliminate inefficiencies• Leverage cost savings across communities

Connectivity• Standardize applications and platforms

• Foster many-to-many collaboration• Enable trade exchange

Execution• Improve transportation, distribution,

inventory, and order management• Expedite financial settlements• Measure performance results

Speed• Increase responsiveness• Improve adaptability• Access information in real time

Visibility• Track inventory flow• Update order status in real time• Manage incidents

Rail Freight Growth

20

Rail has a role in Creating a ‘Seamless’ Supply Chain

A system of integrating logistics players and customers through a seamless process supported by a common technology platform

Rail

EmptyTruck

Port

LoadedTruck

Customer

TruckDepot

Offloads

Goods Loadedon Wagons & Departs

Train Offloads atport

Rail Terminal

Cargo on Vessel

Seamless process

Common Technology Platform

Customs

21

Critical Success Factors

� Relationships with transport partners

� Readiness to form joint venture

� Involvement all key stakeholders

� Communication and sharing of

information

� Joint opportunity identification

� Dedicated project and team members.

22

Conclusion

�Collaboration between rail/road

�Development, Attraction and Retention of Skills

�Infrastructure investment

� Sara Rail Conference: Gallagher Estate

More information:

Stanley.Mkoko@Transnet.net

Thank You