presentation to the transport portfolio...

Presentation to the Transport Portfolio Committee

15 September 2009

2

PRESENTATION OVERVIEW

•

BACKGROUND AND ESTABLISHMENT OF PRASA

•

INVESTMENT BACKLOGS IN THE RAIL COMMUTER INDUSTRY

•

PRASA TURN‐AROUND AND CAPITAL REQUIREMENTS

•

PRASA ESTABLISHMENT PASSENGER RAIL REMAINS UNDER PRESSURE

•

INTERVENTIONS TO ARREST SERVICE DELIVERY IMPERATIVES

•

HIGHLIGHTS OF THE PAST 18 MONTHS

•

CURRENT CAPTIAL INVESTMENT PROGRAM

•

FUTURE CAPITAL REQUIREMENTS

•

CHALLENGES

•

CONCLUSIONS

3

BACKGROUND

• Cabinet decision in 2004 to consolidate rail passenger entities• Consolidation concluded in 2008/09 Financial Year• Legal Succession Act Amended, passed through both houses of Parliament

and signed into Law by the President in December 2008

• PRASA Publicly launched in March 2009

• Consolidation entailed:– Transfer of Metrorail into SARCC

– Transfer of Shosholoza Meyl

– Transfer of Autopax (City to City and Translux)– Intersite Property Management Service was already under former SARCC

4

ESTABLISHMENT OF PRASA

• A Public Transport Company reporting to the Minister of Transport

• Leverage in Government’s Efforts to Transform Public Transport

• PRASA ends fragmentation where SARCC owned assets, whilst Commuter Rail Services

(Metrorail) were operated by Transnet, a freight company

• PRASA now Owns, Manages, Develops, Operates and Maintains

Assets Under its

Control

• Provider of a High‐Quality, Low Cost Passenger Services

5

The Primary object of PRASA according to the Legal Succession Act is to:

– Provide Urban Rail Commuter Services in public interest

– Provide Long Haul Passenger Rail Services– Provide Long Haul Bus Services

The Secondary object of PRASA is to:

– Generate income from the exploitation of assets acquired by PRASA

LEGISLATIVE MANDATE OF PRASA

In addition PRASA shall have due regard to key Government

•Social objectives

•Economic objectives

•Transport objectives

Responsibilities of PRASA:To effectively develop and manage rail & related transport infrastructure and to

provide efficient rail and road based passenger transport services within, to and

from urban and rural areas

6

LEGAL OPERATING STRUCTURE

SubsidiaryDivisionDivision Subsidiary

PRASAPassenger Rail Agency of South Africa

Exploitation/Optimisation of the Asset Base

Service Delivery Co‐operation

7

PRASA STRATEGIC ROADMAP

2009‐2010

2011‐2014

2015+

8

PERIOD PRIOR TO PRASA

INVESTMENT BACKLOG IN THE RAIL COMMUTER INDUSTRY

9

RAIL COMMUTER CAPITAL INVESTMENT BACKLOG PROFILE (Slide presented to Treasury in 2000)

0

150

300

450

600

750

900

1050

1200

1350

1500

1650

1985 1990 1995 2000

Desired Spending Profile (R500 - R700 pa)Actual Spending Profile (R300 - R355 pa)Real Term Rands Profile

SARCCEstablished

Capital injection required to normaliseCapital allocations.

10

CAPITAL INVESTMENTS PRE 08/09 (R’m) Average annual capital allocation was R300 –

R500 m

·Investment Backlog –

R20bn

·Rolling Stock fleet Recapitalisation – R60bn

CAPITAL INVESTMENTS (R'm)

46 140 248 149 242 220 318 307 297 328 353 490691 665 655 688

1030

1516

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

90/ 91 91/ 92 92/ 93 93/ 94 94/ 95 95/ 96 96/ 97 97/ 98 98/ 99 99/ 00 00/ 01 01/ 02 02/ 03 03/ 04 04/ 05 05/ 06 06/ 07 07/ 08 08/ 09 09/ 10 10/ 11

R'm

11

Coach Age Distribution within a 54 year Life Cycle Model

0

200

400

600

800

1000

1200

1400

1600

1800

0-9 10-18 19-27 28-36 37-45 46-54 55-63

Age period

Coa

ches

G O

Upgrade

Replacement

.

Acquire New R/S

4117- 5M2A Coaches

383- 10M Upgrades

110- 6/7/8M Coaches

COMMUTER COACH AGE DISTRIBUTION 40% of fleet older than 37 years

One third of fleet constantly out of service

12

INCREASED INVESTMENTS – TURN – AROUND STRATEGY AND 2010 PERIOD

13

TURN‐AROUND STRATEGY

SARCC implemented a Turn Around Strategy for Commuter Rail, which was divided

into three phases:

Stabilisation (2007 –

2010):

‐

Arrest decline in rail service

‐

Securing feasible short term improvements by region and corridor

‐

Safety‐Critical Interventions

‐

Investments intended to make early and material impact

Recovery (2011 –

2014)

‐

Building on stabilisation phase

‐

Increase patronage

‐

Deploying new rolling stock.

Growth phase (2015 –

2030):

‐

Expanding the rail network an services significantly

Part 1

14

Key Elements of the Turn-Around Strategy

• Accelerated Rolling Stock Programme

• Improvement

on

Reliability

i.e.

Trains

On

Time

and

increase

in Predictability i.e. reduce cancelations

• Safety and Security• Quality Management Systems

• Safety Management Systems (Operational safety)

• Retention of Critical Skills• Customer Satisfaction

15

CUSTOMER FOCUSED IMPROVEMENTS

Measure Target Actual Variance Status

Reliability: Trains on time

A Corridors 90% 88% -2% below target B Corridors 88% 88,9% +0,9% above target C Corridors 85% 87,9% +2,9% above target

Predictability: Trains Cancelled A Corridors 1,5% 1,8% 0,3% above target B Corridors 1,7% 1,23% 0,47% below target C Corridors 2% 0,94% 1,06% below target

Safety & Security Reduction of accidents per million train kilometres.

20% reduction 26.2% increase 26.2% increase

Reduce fatalities per million passenger trips

20% reduction 5,4% increase 46,2% above target

Reduce injuries per million passenger trips

20% reduction 2,8% increase 25,4% above target

Reduced Crime Index (serious crime incidents per 100 000 passenger trips)

0,400 0,332 17% reduction on target

Metro Plus product passenger trips 6% increase 24% increase 18% above target Customer Satisfaction index (Survey)

A Corridors 75% 73% 2% below target B Corridors 73% 73% On target

C Corridors 71% 72% 1% above target

RESULTS FROM OPERATIONAL PERFORMANCE

08/09 (BSC)

16

INCREASE PATRONAGE

Measure Target Actual Variance

Passenger trips increase 6% increase 9.2% increase 3.2% above target

Subsidy per passenger kilometre R0.14 R0.151 7.9%

BOOST REVENUE

Measure Target Actual Variance

Fare Revenue 7% increase (Inclusive of a 5% fare increase)

12,1% increase without a fare increase

5.1% above target

Fare evasion (percentage of passengers without valid tickets) <10% 9%

RESULTS FROM OPERATIONAL PERFORMANCE

08/09 (BSC) Cont…..

17

HIGHLIGHTS OVER THE PAST 18 MONTHS

•Successful conclusion of Consolidation of rail passenger entities

•Increase in Passenger Trips, 9.2% year on year, exceeding target

of 627.3million

and achieving 646.15 million passenger trips

•Increase in Fare Revenue exceeding target of 7% (R83.73 million)

and attaining

12.1% (R144.71million)

•709 Coaches refurbished and brought into service

•Execution and delivery of 2010 Infrastructure underway across business

•Khayalitsha Rail Extension Completed•Govt. Gurantee of R1.4bn for recapitalization of Autopax ahead of 2010

•Successful Delivery of service during Confederations Cup, however rail not fully utilised.

•Introduction of new services e.g. King Williamstown to East london, limited khayelitsha

service, launch of new Express services – 2nd

TBE to Johannesburg, Northen Star from Strand

to Cape Town

18

METRORAIL BUSINESS EXPRESS = MECHANISM FOR CORRIDOR

IMPROVEMENTS

20

Taxi / Bus Rank Station Retail Residential

Rail Link & Underground

Station

Part 4

BRIDGE CITY RAIL EXTENSION

21

COMPLETING 2010 PROJECTS (Total investment = R1 795 m)

CONSISTING OF 75 SUB PROJECTS

•New stations (Nasrec, Moses Mabhida, Orlando, Rhodesfield and Windermere).

•2010 station upgrades (Cape Town, Doornfontein, Rissik, North End, Durban, Kwa Mashu,Kwa Myandu).

•Operational improvements on 2010 corridor stations – 50 stations countrywide.

•Nasrec Infrastructure Intervention.

•SAPS facilities.

•Footbridges and Access.

•Communication and Passenger Information.

•Platform Alignment projects.

22

NASREC STATION (UPGRADE)

•Work Progress Update•Project budget R70m•Work in progress•Construction commenced in June 08 •Acceleration programme to be implemented•Construction 60% complete •Target Completion Date: June 09

23

DOORNFONTEIN STATION (UPGRADE)

•Work Progress Update•Project budget R113m•Construction commenced in May 08•Construction 50% complete•Acceleration programme being implemented•Target Completion Date: May 09, despite stoppage.

24

RHODESFIELD STATION (NEW)

•Work Progress Update•Project budget R105m•Station detailed design under way•Appointment of TKC was cancelled, due to high price•New tenders called, adjudication complete and

appointment to be done in the next week.•Construction scheduled to start early April 2009•Perway materials delivered•Target Completion Date: April 2010

•Bottlenecks•EIA: RoD expected in April 2009•Signals Materials procurement•Final integration with Gautrain being addressed

25

2010 OPERATIONAL ENHANCEMENT PROJECTS

26

FOOTBRIDGE REHABILITATION KEY 2010 AND LEGACY STATIONS

27

FOOTBRIDGE REHABILITATION KEY 2010 AND LEGACY STATIONS

28

George Goch Station

platform 5

Note the variation of

platform level ‐

vertical clearance out

of specification.

PLATFORM CORRECTION PROJECTS

29

CAPITAL PROGRAM

INFORMED BY:

•Stabilisation‐Driven

•Monitoring of service performance, especially customer satisfaction, safety and security.

•Rail Plan corridor interventions (Safety critical investments).

•Rolling Stock Upgrade Program.

•2010 imperatives (2010 station infrastructure and upgrade of 2000 coaches by 2010.

30

CAPITAL INVESTMENTS (R'm)

4 6 14 0 2 4 8 14 9 2 4 2 2 2 0 3 18 3 0 7 2 9 7 3 2 8 3 5 3 4 9 06 9 1 6 6 5 6 5 5 6 8 8

10 3 0

15 16

2 3 6 8

3 6 6 4

4 3 3 9

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

90/ 91 91/ 92 92/ 93 93/ 94 94/ 95 95/ 96 96/ 97 97/ 98 98/ 99 99/ 00 00/ 01 01/ 02 02/ 03 03/ 04 04/ 05 05/ 06 06/ 07 07/ 08 08/ 09 09/ 10 10/ 11

R'm

CAPITAL INVESTMENTS AFTER CONSOLIDATION OF SARCC AND METRORAIL

·Investment Backlog –

R20bn

·Rolling Stock fleet Recapitalisation – R60bn

31

CAPITAL EXPENDITURE & ROLLING STOCK

2008/09 –

2010/11

MTEFRm

08/09 09/10 10/11

SARCC Capital MTEF funding 2,368 3,664 4,439

Rolling Stock Allocations 1,456 2,274 2,139

Percentage allocated to Rolling Stock 59% 60% 48%

Rolling Stock refurbishment program still requires more 50% of capital allocation

32

ESTABLISHMENT OF PRASA

PERIOD OF INVESTMENT PROGRAM ALIGNMENT AND FUTURE REQUIREMENTS

FOR PRASA MANDATE

33

RAIL PASSENGER BUSINESS REMAINS UNDER PRESSURE

•Rolling stock reliability and availability. Fleet 25 years old.

50% of fleet older than 30 years.

•Demand for additional services/capacity. Currently limited network and rolling stockcapacity.

•Increased input costs = labour, energy and material.

•Sharp increase in capital investment without commensurate increase in operational subsidies.

•Human Resources capacity/skills to rationalise operations, maintain, sustain and expandthe network.

•Shortage of funding for critical upgrade/maintenance work. E.g. drainage, stray currentsand track maintenance (See following examples)

34

DRAINAGE & CORRISON

35

DRAINAGE & CORRISON

36

INTERVENTIONS INTRODUCED TO ARREST DECLINE

•Accelerated Rolling Stock Programme

•2000 commuter coaches refurbished.

•Aggressive rolling stock preventative maintenance program.

•2010 infrastructure and operational improvements.

•R738 million allocated for infrastructure maintenance interventions.

•Steer and develop modern, harmonious and productive relationship

with Labour.

•Management training programs.

37

PRASA CAPITAL PROGRAM

NEW DRIVERS OF PRASA’S CAPITAL PROGRAMME:

•Government Transport Policy

•Integrated Rapid Public Transport Networks (IRPTN)

• PRASA Business Plan (BOC Directives)

•Service Excellence.

•Property and Asset Development.

•Technology upgrade and modernisation of key systems.

• Technology Factor

‐

High‐

Speed Rail, Light‐Rail Systems

•Capital Prioritisation Model

•Strategic Business Plan Projects (Railway Extensions, Re‐Signaling).

•Service Enhancement Projects.

•Safety Critical Projects (Safety Management Plan).

•Revenue Generation Projects.

•Business Plan Implementation Ready Projects.

38

STATIONS AND PROPERTY DEVELOPMENT

•

Property portfolio to play bigger role in additional business revenue through station

improvements, precinct developments and Integrated Transit Orientated developments.

Flagship property development:

•

Cape Town Station

•

Mabopane Station

•

Durban Station

•

Johannesburg Station

•

Pretoria Station

•

Eerste Fabrieke Station

•

Naledi Station

Seed capital to commence development and unlock developer investments –

R350 m

39

BOC KEY PERFORMNACE AREA PRASA STRATEGIC OBJECTIVE

Contribute to Government’s objectives of safe, affordable,

accessible and reliable public transport.

SERVICE EXCELLENCE

in the provision of affordable, reliable,

predictable and operationally safe integrated public transport

services.

Investment in infrastructure to contribute to growth and

development.

ASSET UTILISATION

–

Investment in, and use of, assets and the

properties through the application of total life‐cycle

management practices.

Provision of sustainable quality services. SERVICE QUALITY AND PASSENGER GROWTH

–

Sustaining

superior customer services that achieves a high customer

satisfaction.

Financial effectiveness to maximise operational efficiencies. FINANCIAL EFFECTIVENESS

– Ensuring sufficient and effective

deployment of available resources.

Corporate Governance & legislative compliance. GOVERNANCE AND COMPLIANCE

–

Ensuring compliance to

statutory requirements by a culture of corporate governance

practices and accountability.

Contribution to the achievement of Government’s socio‐

economic goals.

STRATEGIC SOURCING

through Supply Chain management and

promotion of broad‐based economic empowerment.

Human Capital Resources Development LEARNING AND GROWTH

–

Ensuring that the appropriate

knowledge and skills are acquired and maintained.

PRASA STRATEGIC OBJECTIVES

40

Crown Station

Dangerous gaps between

platforms and trains.


41

Grosvenor Station

platform 4

The step here was

650mm. A standard

step in a building is

170mm. The standard

step for commuter

trains is 190 mm ‐

230

mm.


42

Crown Station

View of completed

platform.


43

PRASA INVESTMENT PROGRAM/REQUIREMENT

Biggest challenge for PRASA in capital investment is to obtain the correct balance between sustaining the current system, whilst starting to

modernise the system through migration to more contemporary technologies.

•

BRT competition.

•

Reliance on TFR for long distance track access with average speeds of 50 km for intercity trains.

•

PRASA mandate for integrated and expanded services in all provinces.

•

Growing commuter travel needs and limited service and line capacities being experienced in the system due to current system and technology limitations.

44

ROLLING STOCK FLEET REQUIREMENTS

•

Rolling stock upgrades and technology enhancement.

•

Preventative Maintenance.

•

Recapitalisation of fleet.(R65 bn)

45

CRITERION Metrorail 5M/10M Contemporary EMUHigh accelerationHigh retardationHigh speedVideo surveillanceControl-to-passenger communicationPassenger-to-driver communication

Safety Automatic train protectionEnduring crashworthinessEfficient power electronicsRegenerative brakingHigh-capacity signalingLevel entryPassenger information systemAir springsTight-lock couplersStepless braking controlStepless traction controlSound insulationPlug doorsHeatingVentilationAir conditioning

Security

Greening

Mobility

Convenience

NEED FOR FLEET RECAPITALISATION: CURRENT VS CONTEMPORARY TECHNOLOGY STANDARDS

46

ROLLING STOCK REFURBISHING PROGRAM

Planned GO/Upgrading program:

COACH

QUANTITIES

2007/08 2008/09 2009/10 2010/11 2011/12

500

(Funded)

700

(Funded)

700

(funded)

480

(funded)

480

(funded)

Excluding technology enhancements.

47

SARCC 10M5 UPGRADE

5M Coaches 10M Coaches

Part 2

48

ROLLING STOCK PREVENTATIVE MAINTENANCE FOR SERVICE EXCELLENCE

•Fleet is 35 years old with oldest vehicles 47 years –

Accepted norm at 40 years useful life.

•Reliability and performance of fleet on steady decline.

•Deferred maintenance creating collateral damage –

Components fail while in service inbetween maintenance cycles.

•Aggressive preventative maintenance plan to optimise existing fleet with capital technologyupgrades, moving to pro‐active repair instead of re‐active repairs.

•Interior renewal, control system, compressors, door mechanisms, brake systems, pantograph systems and train wheels.

2009/10

RM

2010/11

RM

2011/12

RM

2012/13

RM

2013/14

RM

TOTAL

RM

PREVENTATIVE MAINTENANCE 48 147 268 ‐ ‐ 463

TECHNOLOGY UPGRADE 164 489 842 1 014 1 123 3 632

49

RE‐SIGNALING PROGRAM SERVICE EXCELLENCE, CAPACITY AND

MODERNISATION

•Signaling system at end of economic life.

•Only 23 (14%) of the 162 signaling installations have not exceeded their design life.

•Affect availability, reliability and capacity norms.

•Replacement program for signaling interlocking and re‐signaling of key installations.

•REQUIREMENT:

• R6 bn

over the next 5 ‐

7 years

•14.5bn over the next 15 – 20 years.

50

SERVICE EXCELLENCE = REFURBISHMENT, REPLACEMENT AND MODIFICATIONS OF EXISTING

INFRASTRUCTURE DRIVEN BY SAFETY PARAMETERS

•20 – 40km Re‐railing and re‐sleepering.

•Replace slips, turn‐out and crossings.

•Draining upgrading.

•Bridge rehabilitation.

•Workplace improvements (Buildings for staff, depots, etc).

2010/11

RM

2011/12

RM

2012/13

RM

2013/14

RM

2014/15

RM

TOTAL

RM

110 353 685 650 700 2 288

51

GENERAL INFRASTRUCTURE IMPROVEMENTS SERVICE EXCELLENCE AND MODERNISATION

•Train control and telecommunication failures.

•Overhead and power and sub‐station failures – Age profile = 40 – 50 years –

Corroded structures.

•Overhead bridges, platform heights and communication systems at stations are not specialneeds compliant or convenient for general use.

2010/11RM

2011/12RM

2012/13RM

2013/14RM

TOTALRM

TELECONOMMUNICATIONS 150 100 100 100 450

FOOTBRIDGES AND SPECIAL NEEDS 40 100 100 100 340

PLATFORM CLEARANCE 30 30 30 30 120

OVERHEAD POWER STRUCTURE UPGRADE 100 150 150 200 600

TOTAL 1 510

52

CHALLENGES FOR PRASA GOING FORWARD

• Establishment and positioning of PRASA group.

• Customer and stakeholder expectations.

• Cost containment (Operational costs and capital investment priorities).

• Competitiveness of Shosholoza

Meyl

affected by capacity and train priority dependence on TFR.

• Accelerated Rolling Stock program review to ensure long term value for money.

• Technology challenges: Limitations, obsolescence, high maintenance costs.

• Renewal of rolling stock fleet urgent – 30 % of fleet (1 350) nearing retirement in 36 months

• Demand for additional services, expansions and improvements.

• Long term capital program and funding model esp

to fund mega projects from alternative funding

sources

• Property portfolio maximisation

and revenue generation.

53

Challenges Cont…

• Current System at end of its Design Life.

• Underlying Technology is Obsolete.

• Avoid Over‐Capitalization on Existing System whilst Maintaining at Right Level .

• New Cycle of Capital Investment in South African Railways Upon Us.

• Partnership with RSR on Safety‐Critical Interventions Critical.

• Renewal of technology and fleet is now critical, risk of postponing will take business back to condition once described as “knife‐edge”

54

Conclusion

• PRASA

a

lever

for

Govt

to

drive

Public

Transport transformation

• PRASA

tasked

with

speedy

restructuring

of

businesses such

as

Metrorail

and

Shsosholoza

meyl

to

ensure

efficient

and

cost

effective

operations

to

meet

public travel demands

• PRASA

establishment

has

laid

solid

foundations,

PRASA tasked with taking performance to new heights

presentation to the transport portfolio...

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