PUBLIC ENTERPRISES PORTFOLIO COMMITTEE BRIEFING ON SOE INFRASTRUCTURE INVESTMENT 25 JUNE 2003.

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  • PUBLIC ENTERPRISES PORTFOLIO COMMITTEEBRIEFING ON SOE INFRASTRUCTURE INVESTMENT

    25 JUNE 2003

  • Ministry of Public Enterprises Date - * Page *Restructuring Proceeds and SOE Debt Trend (cont.) SOE Foreign Borrowings 1992 to 2002

    extdebt

    US $ milions

    1985198619871988198919901991199219931994199519961997199819992000

    SOE external debt 82379080960186238832107111052810751965888671109193119697814877648297

    Total foreign debt for South Africa....................................................................23721225932261821185257542327324889267652700029655353353454039206374623886436858

    % SOE external debt to total external debt for SA34.7%40.2%42.4%40.7%34.3%46.0%42.3%40.2%35.8%29.9%31.4%27.0%24.7%21.8%20.0%22.5%

    GDP%

    Public corporations / GDP

    All Public Corporations as a Percentage of GDP

    Capital Formation

    Public corporations / total gross domestic fixed capital formation

    Public Corporations' Contribution to Total Gross Domestic Fixed Capital Formation

    Value Add

    Total surplus/deficit of the non-financial Public enterprises as % of GDP

    Total Surplus of Public Enterprises as % of GDP

    Borrowings

    0.460232887910711

    0.422998111610528

    0.401681300210751

    0.35770370379658

    0.29900522688867

    0.313881420711091

    0.26957151139311

    0.24733459169697

    0.21750040048148

    0.19978002257764.2507961266

    0.22509777678296.6952684222

    0.15351674024732

    0.14940961354821

    &A

    Page &P

    SOE borrowings as % of International Debt

    SOE External Debt

    Year

    Percentage

    US $ Millions

    RESBANK DATA

    PUBLIC ENTERPRISES

    US$ Millions

    Nr 1Nr2Nr 3Nr4Nr 5Nr 6Nr7

    Public corporations / GDPPublic corporations / total gross domestic fixed capital formationEMPLOYMENTPublic corporations / Domestic credit extension of all monetary institutions incl the Land Bank to the private sector and governmentSOE External DebtTotal foreign debt for South AfricaSOE borrowings as % of International DebtTotal surplus/deficit of the non-financial Public enterprises as % of GDPAny information on subsidies.

    %KBP6106J/KBP6009J*100KBP4409J/KBP6006J

    1990NA16.10NA107112327346.0%NA

    1991NA15.50This information is available from STATS SA e-mail: http://www.statssa.gov.za, Survey of employment and earnings in selected industries0.75105282488942.3%NA

    1992NA15.170.64107512676540.2%-3.33

    19937.913.040.3596582700035.8%-4.41

    19947.911.540.7788672965529.9%-1.70

    19958.011.930.74110913533531.4%-2.45

    19967.711.950.5993113454027.0%-0.81

    19977.612.360.6996973920624.7%2.16

    19987.317.960.9781483746221.8%-2.22

    19996.913.960.9777643886420.0%1.67

    20006.611.110.8882973685822.5%4.39

    20015.810.270.7847323082415.4%2.85

    2002Not yet available10.750.6548213226714.9%2.44

    Contact person:K KuhnP SeepiM BritsMr J GroblerK Kuhn

    Tel nr313 4318313 3027313 36293133892313 4318

    smithwa:Figures to date if any are available

    smithwa:This series is not compatable with the previous series provided by Resbank - so can't be backfilled

    smithwa:Parastatals, excludes DFIs

    Resbank Chart

    SOE External DebtTotal foreign debt for South AfricaSOE borrowings as % of International Debt

    1990107112327346.0%

    1991105282488942.3%

    1992107512676540.2%

    199396582700035.8%

    199488672965529.9%19901071146.0%

    1995110913533531.4%19911052842.3%

    199693113454027.0%19921075140.2%

    199796973920624.7%1993965835.8%

    199881483746221.8%1994886729.9%

    199977643886420.0%19951109131.4%

    200082973685822.5%1996931127.0%

    200147323082415.4%1997969724.7%

    200248213226714.9%1998814821.8%

    1999776420.0%

    2000829722.5%

    2001473215.4%

    2002482114.9%

    smithwa:Parastatals, excludes DFIs

    smithwa:Figures to date if any are available

    smithwa:Figures to date if any are available

  • Ministry of Public Enterprises Date - * Page *Restructuring Proceeds and SOE Debt Trend (cont.) Surplus of Public Enterprises as % of GDP

    extdebt

    US $ milions

    1985198619871988198919901991199219931994199519961997199819992000

    SOE external debt 82379080960186238832107111052810751965888671109193119697814877648297

    Total foreign debt for South Africa....................................................................23721225932261821185257542327324889267652700029655353353454039206374623886436858

    % SOE external debt to total external debt for SA34.7%40.2%42.4%40.7%34.3%46.0%42.3%40.2%35.8%29.9%31.4%27.0%24.7%21.8%20.0%22.5%

    GDP%

    7.9

    7.9

    8

    7.7

    7.6

    7.3

    6.9

    6.6

    5.8

    Public corporations / GDP

    Year

    Percentage

    All Public Corporations as a Percentage of GDP

    Capital Formation

    16.1

    15.5

    15.17

    13.04

    11.54

    11.93

    11.95

    12.36

    17.96

    13.96

    11.11

    10.27

    10.75

    Public corporations / total gross domestic fixed capital formation

    Public Corporations' Contribution to Total Gross Domestic Fixed Capital Formation

    Value Add

    -3.33

    -4.41

    -1.7

    -2.45

    -0.81

    2.16

    -2.22

    1.67

    4.39

    2.85

    2.44

    Total surplus/deficit of the non-financial Public enterprises as % of GDP

    Borrowings

    0.401681300210751

    0.35770370379658

    0.29900522688867

    0.313881420711091

    0.26957151139311

    0.24733459169697

    0.21750040048148

    0.19978002257764.2507961266

    0.22509777678296.6952684222

    0.15351674024732

    &A

    Page &P

    SOE borrowings as % of International Debt

    SOE external debt

    Year

    Percentage

    Billions

    SOE Foreign Borrowings

    RESBANK DATA

    PUBLIC ENTERPRISES

    Explanatory Note: In preparation for the Minister of Public Enterprise's Budget Speech, I would like some general statistics on SOEs and the National Economy. I requested the same information last year and SARB were extremely helpful. Please would you upd

    Nr 1Nr2Nr 3Nr4Nr 5Nr 6Nr7

    DescriptionPublic corporations / GDPPublic corporations / total gross domestic fixed capital formationEMPLOYMENTPublic corporations / Domestic credit extension of all monetary institutions incl the Land Bank to the private sector and governmentSOE external debtTotal foreign debt for South AfricaSOE borrowings as % of International DebtTotal surplus/deficit of the non-financial Public enterprises as % of GDPAny information on subsidies.

    Formula%KBP6106J/KBP6009J*100KBP4409J/KBP6006J

    199016.10

    199115.50This information is available from STATS SA e-mail: http://www.statssa.gov.za, Survey of employment and earnings in selected industries0.75

    199215.170.64107512676540.2%-3.33

    19937.913.040.3596582700035.8%-4.41

    19947.911.540.7788672965529.9%-1.70

    19958.011.930.74110913533531.4%-2.45

    19967.711.950.5993113454027.0%-0.81

    19977.612.360.6996973920624.7%2.16

    19987.317.960.9781483746221.8%-2.22

    19996.913.960.9777643886420.0%1.67

    20006.611.110.8882973685822.5%4.39

    20015.810.270.7847323082415.4%2.85

    200210.750.652.44

    Contact person:K KuhnP SeepiM BritsMr J GroblerK Kuhn

    Tel nr313 4318313 3027313 36293133892313 4318

    smithwa:Figures to date if any are available

  • Ministry of Public Enterprises Date - * Page *Consolidated SOE capital expenditure programmesSOE Capital Budgets to 2005 (R millions)

    Capex

    SOE2002200320042005

    Transnet9,03312,6307,1166,644

    Eskom5,6419,44712,1919,334

    Denel234.3246.3234.2170.8

    Eskom

    2002197mWomen

    494m

    Senior Mgmt

    20022005 Goal

    SOEBlacksWomenBlacksWomen

    Transnet*

    Eskom53.62353.623

    Denel15.79.319.812.4

    Sheet3

  • Ministry of Public Enterprises Date - * Page *Selected examples of infrastructure projects in theDefence, Energy, and Transport sectors.

  • Ministry of Public Enterprises Date - * Page *Energy Sector Eskom (cont.)Generation Capital Expenditure Budges 2003 to 2007 Rm

  • Ministry of Public Enterprises Date - * Page *Defence Sector Denel Capital Expenditure for 2003/04Of the total amount spent on business infrastructure 47% is for maintaining existing capacity whilst 43% is investment to increase capacity

    Sheet1

    Division2002/03 forecast2004/04 budget

    Ordnance118.7109.3

    Aerospace97.6126.3

    Commercial & IT319.9

    Denel Group total248.8251.4

    Percentage of sales56

    Sheet2

    Sheet3

  • Ministry of Public Enterprises Date - * Page *Energy Sector Eskom (cont.)Latest Transmission Supply Plan (2003-07) Dec.2002

    Exp dif

    AdditionsR/M'sReductionsR/M's

    Pechiney236Grt Rustenburg60

    Hillside146Grt Polokwane49

    JHB North13Vaal Triangle40

    Expansion8JHB Nigel23

    Adis350CSNH20

    753Janus63

    255

    Difference498

    Sheet5

    TIC Presentation DatesWUCCapital SparesProd EquipTotal

    4-Sep-02204215292086

    4-Dec-02220715242246

    Difference1650-5160

    RefExpOtherEIA&SerTotal

    4-Sep-02319170011122042

    4-Dec-02297186610342207

    Difference-22166-122165

    GSOR/M'sProjects

    N East Grid-11Matla & Rockdale

    System Operations-11Encor Evolution

    -22

    ExpansionR/M'sR/M's

    AdditionalReductions

    Pechiney236Grt Rustenburg

    Hillside146

    JHB North13

    Expansion8

    403

    No.3

    Categories200220032004200520062007

    Work Under Construction (WUC)480215243881167964420

    Capital Spares351515151515

    Production Equip302321252420

    Totals5452190442412071003455

    Sheet1

    SubmissionsActuals

    Feb135

    Mar203

    Apr22

    May012

    Jun24

    Jul53

    Aug05

    Sep15

    Oct55

    Nov26

    Dec30

    20022003

    Jan2

    Feb45

    Mar93

    Apr3

    May0

    Jun43

    Jul4

    Aug0

    Sep4

    Oct517

    Nov6

    Dec131

    Nov26.25

    Dec3131

    Oct416.8

    Sep13.5

    July14.3

    Jun13

    12164.85

    Year End Plan480

    year End F/cast423

    YTD ActYTD Plan

    1st Qtr5288

    2nd Qtr100200

    3rd Qtr222425

    4th Qtr332475

    Sheet1

    00

    00

    00

    00

    YTD Act

    YTD Plan

    Sheet2

    00

    00

    00

    00

    00

    00

    00

    00

    00

    00

    00

    00

    2002

    2003

    Sheet3

    00

    00

    00

    00

    00

    00

    00

    00

    00

    00

    00

    Submissions

    Actuals

    Year End Plan480

    Year End F/cast332

    Variance148

    Major Variances

    Deferred Projects59

    (Luckhoff Caps - 27)

    Cancelled Projects81

    (Beta Reactor Saving -22)

    20022003

    Jan1

    Feb13

    Mar20

    Apr21

    May1

    Jun11

    Jul41

    Aug1

    Sep1

    Oct14

    Nov2

    Dec3

    DecNovOctSep

    EIA&Serv5.2

    West8.85

    South2.27

    N West13.28

    East9.28

    North6.92

    N East10.58

    Central11.48

    Technology3.41

    Bus Serv2.2

    Sys Ops0.85

    74.32

    PlanApproved

    West7.64.1

    South2.35.1

    N West10.11.7

    East7.914.1

    North6.48.8

    N East9.917

    Central12.416.17

    Techn1.80.4

    00

    00

    00

    00

    00

    00

    00

    00

    Plan

    Approved

  • Ministry of Public Enterprises Date - * Page *Energy Sector Eskom (cont.)Eskom Distribution Capital Rolling Plan Project CategoriesR000 Direct Customer Projects 575,190 Strengthening Projects 449,911 Refurbishment Projects730,863 Electrification Projects 560,371 Land and Rights acquisitions 8,978 Rural Development 33,800 EBSST74,200 Various other 257,334 ASSET UNDER CONSTRUCTION 2,690,648

  • Ministry of Public Enterprises Date - * Page *Energy Sector Eskom (cont.)

    Electrification (Cumulative Number Of Homes Electrified)

    2.8 million homes electrified211 628

  • Ministry of Public Enterprises Date - * Page *Energy Sector Eskom (cont.)

    Major Schemes in plan

    East Grid SchemesBayside Aluminium Potline Upgrade Hillside Aluminium 3rd Potline IntegrationSouthern & Western Grid SchemesCape Strengthening: North of Hydra Scheme Cape Strengthening: South of Hydra Scheme Aluminium Smelter at CoegaNorth & North East Grid schemesSimunye RTS: Camden Polokwane Network Strengthening Scheme Steelpoort Strengthening Adis Substation Integration Rustenburg Network Strengthening Scheme Central Grid SchemesVaal Triangle Strengthening Johannesburg North Strengthening Atlas Bypass and Decommission Project

  • Ministry of Public Enterprises Date - * Page *Energy Sector Eskom (cont.)

    Major capital projects within next 5 to 10 years

    Platinum and ferrochrome mining expansions within northern region Vaalwater 132kV Overlay - R23m UG2 Smelter Line and Substation - R30m Overyssel Line and Substation - R129m Tailings Platinum Mine Expansion - R30m Polokwane Smelter - R38m Styldrift Platinum Mine Expansion - R36m Waterval Platinum Project - R27m Transvaal Ferrochrome Mining - R42m Waterval Smelter Upgrade - R21m5 year plan incorporates all reasonably foreseen growth prospects, including platinum basin etc. Potential projects may materialise in excess of plan, no feel of the risk at this stage

  • Sheet1

    MAJOR PROJECTS - SA PORTS (NOT TOTALS!)

    94/9595/9696/9797/9899/002001/20022003/2004

    Durban112.8243216.8839.98

    Cape Town7668.931.5

    Richards Bay259.4222.6663.2

    Saldanha Bay219.583.9

    East London11212

    Port Elizabeth59.8

    Total188.8850.6439.4861.61129.9812

    Sheet2

    Sheet3

  • Ministry of Public Enterprises Date - * Page *Transport Sector Port OperationsProject Durban Terminals UpgradeOverview A key part of the ports cargo handling infrastructure upgrade programme that aims to address capacity problems and to upgrade local facilities to global standards. Key features are: Existing crane upgrades by conversion of crane power to 11KV Fire protection equipment at container gantries Socio-economic impact Employment creation during construction phase and improved service to clients

    State Owned EnterprisesS A PORT OPERATIONS (TRANSNET)Project InitiatedJanuary 2000Project Finalized / Expected Date of FinalizationDecember 2005Policies / Legislation created / implementedN/ADate Cabinet Approval Received/ExpectedN/AProceeds receivedN/AProceeds expectedN/AAdvisors appointedN/AProejct valueR700 MILLIONRestructuring Model ChosenRecapiltalisationJobs created / Jobs LostOnly jobs in supplier companies will be createdProject ManagerMr Hamilton NxumaloContact Details031 308 8310

  • Ministry of Public Enterprises Date - * Page *Transport Sector Port Operations (concluded)Project Iron Ore Terminal ExpansionOverview Construction of expanded bulk handling faclities for the Saldanha Bay Iron Ore Terminal. The IOT is the dedicated export chanel for iron ore mined in the Northern Cape. The expansion is required to raise output from 18 million tpa to 29 million tpa. Installation and erection of 4.5km new conveyor belts Addition of 2 Shiploaders 3 new stacker reclaimers Purchase new tipper Refurbishment of existing equipment Upgrade of existing old equipment Socio-economic impact Support development of Northern Cape mineral fields and associated additional mining jobs. Increased iron ore exports will be worth R1.6 billion pa.

    State Owned EnterprisesS A PORT OPERATIONS (TRANSNET)Project InitiatedJanuary 2000Project Finalized / Expected Date of FinalizationDecember 2004Policies / Legislation created / implementedN/ADate Cabinet Approval Received/ExpectedN/AProceeds receivedProceeds expectedN/AAdvisors appointedN/AProject valueR921 millionRestructuring Model ChosenCapital expansion Jobs created / Jobs LostJobs created in supplier companiesProject ManagerMr Hamilton NxumaloContact Details031 308 8310

  • Ministry of Public Enterprises Date - * Page *Overview Expansion of Terminal from 72 million tons per annum capacity to 82 million tons pa capacity. A further coal export facility is envisage at the Dry Bulk Terminal (DBT) in Richards Bay which will in its initial stage permit 800,000 tons of coal export. This will occur based on Environmental Impact Assessment completionProject Richards Bay Coal Terminal Capacity Expansion It is anticipated that job creation will arise as a result opportunities at minesJobs created / Jobs LostProject ManagerThe project is done in conjunction between Transnet & RBCT for the tune of 2,4 billion rands Transnet = R1,7 billion RBCT= R700 milFees Paid (R/Donor Funded)Restructuring Model ChosenNational Port Authority (Transnet)State Owned EnterprisesPrivate to be appointed by RBCTAdvisors appointedProceeds expectedProceeds receivedDate Cabinet Approval Received/ExpectedCompliance with Transnet Procurement Policy emphasis of BEE component in the exporting of coal.Policies / Legislation created / implementedEstimated finalisation date 2005-06 Project Finalized / Expected Date of FinalizationN/A MOA close to finalisationProject Initiated Jointly between RBCT & TransnetN/AN/AN/ATransport Sector Port Authority

  • Ministry of Public Enterprises Date - * Page *

    Transport Sector Port Operations (cont.)

    Project Straddle Carriers For Durban Container Terminal

    OverviewA key part of the ports upgrade programme for Durban Container Terminal that aims to address capacity problems ahead of concessioning, improve terminal productivity and reduce container handling delays at DCT.

    Projec involves acquisition of 60 Straddle Carriers for Durban Container Terminal with local assembly of 40 carriers and ongoing maintainence

  • Ministry of Public Enterprises Date - * Page *Transport Sector Port OperationsProject Durban 2005Overview A key part of the ports physical infrastructure upgrade programme that aims to address capacity problems and to upgrade local facilities to global standards. Key features are: Upgrade of City Terminals in Durban and creation of expanded terminal Infrastructure development for Durban Container Terminal Coversion of pier 1 for container handling Socio-economic impact Employment creation during construction phase and improved service to clients

    State Owned EnterprisesNational Ports Authority (Transnet)Project InitiatedJanuary 2000Project Finalized / Expected Date of FinalizationDecember 2005Policies / Legislation created / implementedN/ADate Cabinet Approval Received/ExpectedN/AProceeds receivedN/AProceeds expectedN/AAdvisors appointedN/AProejct valueR900 millionRestructuring Model ChosenRecapiltalisationJobs created / Jobs LostOnly jobs in supplier companies will be created

  • Ministry of Public Enterprises Date - * Page *Transport Sector Port Authority (cont.)Project Port of East London Deepening of West Quay Overview Dredging and deepening of 250m of West Quay berth R-Extension to 10.7m consistent depth and the stabilization of the quaywall by rock anchors and grouting Socio-economic impact Enabling car carriers of deeper draft to call at the Port of East London, average 2 vessels per month Facilitating and enhancing growth of trade especially in the automotive industry, benefits realised in port and cargo dues, growth in economy as a result of cargo import/export plus the multiplier effect as a result of jobs created

    State Owned EnterprisesNational Port Authority (Transnet)Project InitiatedMarch 2001Project Finalized / Expected Date of FinalizationDecember 2003Policies / Legislation created / implementedOHSA, COID, NEMA Compliance; Transnet Procurement Policy emphasis of BEE component and transfer of skillsDate Cabinet Approval Received/ExpectedProceeds receivedProceeds expectedAdvisors appointedDesigned by Protekon - JohannesburgFees Paid (R/Donor Funded)Dredging& Geotechnical - R 1,500 000 Design and Construction - R 10, 853, 000 Total R 12, 353, 000Restructuring Model ChosenJobs created / Jobs Lost( Estimate) 40-50 local labour : Unskilled, semi-skilled and skilledProject ManagerSibongile Ngumbe Port of East LondonContact Details043 700 2540 ; 083 496 6569

  • Ministry of Public Enterprises Date - * Page *Project Construction of Port of Ngqura Transport Sector Port Authority (concluded)Overview The construction of the Ngqura Port is effectively the key to unlock the potential of the Coeg IDZ. Already over 3 million cubic metres of soil has been excavated from the future basin. Key parts of current work Marine infrastructure (keywalls and excavation of turning basin) Sand bypass system Dredging is scheduled to start in June Parallel developments on the land side are building the IDZ infrastructure and providing bulk infrastructure for the industrial land and access roads Socio-economic impact It is expected that during construction phase approximately 2000 jobs will be created, while the permanent jobs in the port will be fairly few, the potential of the IDZ is enormous (but cannot be quantified at this stage).

    State Owned EnterprisesNational Ports Authority (Transnet)Project InitiatedN/aProject Finalized / Expected Date of FinalizationExpected finalisation end of 2005 Policies / Legislation created / implementedCompliance with Transnet Board sanction emphasis of BEE component in the building of breakwaters and quaywallsDate Cabinet Approval Received/ExpectedN/aProceeds receivedN/aProceeds expectedN/aAdvisors appointedN/aFees Paid (R/Donor Funded)Dredging works of R423 million (BEE R423) Maritime works (Breakwaters & quaywalls - R 1,429 billion. Sand bypass works R98,8 million Total R 3,2 billionRestructuring Model ChosenN/aJobs created / Jobs LostCurrenlty 650 people working on marine infrastructure. During the first phase of construction on the land side the estimate employment will rise ot 2000 mostly local labour Project ManagerKgoadi MalatsiContact Details083 308 9547

  • SPOORNET

    Chart2

    310.6

    -409.3

    -188.7

    330.1

    778.5

    NET SURPLUS/(SHORTFALL)

    Sheet1

    NET SURPLUS /(SHORTFALL)

    1997/981998/991999/002000/20012001/2002

    310.6-409.3-188.7330.1778.5

    Sheet1

    &A

    Page &P

    NET SURPLUS/(SHORTFALL)

    Sheet2

    Sheet3

  • Ministry of Public Enterprises Date - * Page *Transport Sector RailProject Rolling Stock Capitalisation and Refurbishment ProgrammeIntro Spoornet has a fleet of outdated locomotives and wagons. The average age of the existing locomotive fleet is 25 Years. The operating cost, reliability and service quality of running these old locomotives has caused the withdrawal of services and the pricing of services beyond the carrying capacity of the market. Socio-economic impact The recapitalisation programme will allow more efficient locomotives to be used in the rural areas(primarily diesel). This will allow the re-vitalisation of the branch line network and act as an economic multiplier in rural economies. The overall efficiency and quality of rail services will improve dramatically, thereby driving down real pricing of rail services, and also increasing the carrying capacity of the rail network. This will result in a shift from road to rail (in conjunction with Government policy initiatives) that will arrest the current level of road degradation and related costs. It is envisaged that R 9 Bil of the forecast R 10 bil capex on wagons, will be spent in RSA. Less than 50% of the R 19 Bil total expenditure on locomotives will be spent abroad. The components sourced will be those that are not manufactured in RSA. The successful suppliers will be required to transfer skill over the period to ensure a reduced reliance on foreign expertise, and will be required to embed their technology in Spoornet and develop local support networks.

    State Owned EnterprisesSpoornetProject Initiated2002Project Finalized / Expected Date of Finalization2018Policies / Legislation created / implementedGovernment Rail Model adoptedDate Cabinet Approval Received/ExpectedNov 2001Proceeds receivedNAProceeds expectedNAAdvisors appointedNAProject Value R 29 billionRestructuring Model ChosenRe-capitalisation and internal restructuringJobs created / Jobs LostNot quantifiable as knock effect depends on Macro-economic changesProject ManagerChris Dutton (Chief Engineer)

    Contact Details(012) 315 4025

  • Ministry of Public Enterprises Date - * Page *Project Fixed Infrastructure UpgradeTransport Sector Rail (cont.)Intro The fixed infrastructure plays a significant role in the operational efficiencies and carrying capacity of the rail network. The spending on this item will be spread across all the provinces and will be procured locally wherever possible. As can be seen by some of the examples to follow, the line by line assessment and the development of regional strategies for the Light and low density line system, that will be done in consultation with provincial and local government, business, labour and communities, will require that this investment be spent in areas all around the country and not merely in the big cities and their linkages. Socio-economic impact The procurement of goods and services in the upgrade localities will have a knock-on effect in those regional and local economies. The raising of the carrying capacities and efficiencies of lines will have a downward pressure on real pricing in the medium term and therefore stimulate local economic development and reduce the real cost of logistics faced by rural and peri-urban production. This will have the net effect of reducing the cost of exporting goods from marginal areas in the country, and therefore allow the expansion of the basket of goods currently exported. This expenditure is further required to raise the safety levels in some areas, support the industrial, mining and development strategies of the Provincial and Local Governments, support the integrated transport strategies at local and provincial levels and also raise the levels of service delivery to surrounding communities.

    State Owned EnterprisesSpoornetProject Initiated2002Project Finalized / Expected Date of Finalization2018Policies / Legislation created / implementedGovernment Rail Model AdoptedDate Cabinet Approval Received/ExpectedNov 2001Proceeds receivedNAProceeds expectedNAAdvisors appointedNAProject Value R 13 BilRestructuring Model ChosenRe-capitalisation and internal restructuringJobs created / Jobs LostNot quantifiable as knock effect depends on Macro-economic changesProject ManagerDanie Barnard(Chief Engineer)Contact Details(012) 315 4025

  • TRANSPORT SECTOR RAIL INFRASTRUCTURE

    Three basic elements form the backbone of fixed rail infrastructure development:

    [1]leasing or outsourcing of selected unviable or LDL

    [2]new line development

    [3]upgrades of LDLs, HDLs or lines that were previously classified as unviable.

    NB: identify lines as part of IDZ, SDI, provincial authorities development plans, and link to Eskom projects, agricultural development and new mining and industrial activity.

  • Spoornet Rail NetworkHDLLDL with no serviceLDL that are not viable LDL with repositioning potentialRailway Network classification prior to regional development strategies being developed

  • TouwsrivierMid IlovoPlastonKelsoEshoweUtrechtHawerklipNaboomspruitMiddelwitVierfontein SishenSaldanhaCape TownEast LondonPort ElizabethMosselbaaiBredasdorpProtemStrandSimonstadStellenboschFranschhoekBitterfonteinPortervilleAtlantisPrins Alfred HamletRiversdaleKnysnaCalitzdorpGeorgeLadysmithAvontuurPatensieKlipplaatOudtshoornRosmeadKirkwoodAlexandriaPort AlfredCookhouseSomerset EastNoupoortDe AarPrieskaUpingtonKakamasNaroegasWorcesterSakrivierCalviniaHutchinsonKootjieskolkBeaufort WestBelmontDouglasHotazelWarrentonPudimoeMakwassieMafikengOttosdalVermaasSchweizer-RenekeKlerksdorpOrkneyColignyBultfonteinWhites WestleighBloemfonteinAliwal NorthSannasposDreunbergSpringfonteinKoffiefonteinHofmeyerSchoombeeJamestownBarkley EastMaclearTarkastadQamataQueenstownBlaneyBethulieSeymourUmtataFortBeaufortAmabeleMaseruMarquardLadybrandBethlehemWolwehoekLichtenburgWardenHarrismithBergvilleKokstadMatatieleHardingPort ShepstoneDurbanKranskopRichmondUnderbergStangerNkwaliniRichards BayVryheidHlobaneMoorleighLadysmithRoossenekalSteelpoortGraskopMachadodorpBelfastLothairKomatipoortBabertonPhalaborwaMessinaLouis TrichardtSoekmekaarZebedielaVaalwaterNylstroomJburgPretoriaO/fonteinEllisrasNorthamCharlestownVredePotchestroomEmpangeniDonnybrookGreytownFranklinKimberleyMarble HallStandertonBethalB/plaasSimumaMandonelaWinburgTheunisenChroomvalleiDrummondleaVirginiaGlen HHiltonCoppertonCullinanRaytonUitenhageKlawerThabazimbiPietersburgSpoornet lines

    NorthcorCapecorSouthcorNatalcorR.BaycorN.WestcorEastcorN.EastcorSalkorSentracorSouthEastCorWestcorFreestateBeit BridgeHowickNakopPostmasburgErtsManganorePalingpanRustenburgHoedspruitGlencoeNewcastleArlingtonWitbankOgiesBreytenKrugersdorpWelverdiendSentrarandWelgedagKroonstadGolelaAncona

  • Ministry of Public Enterprises Date - * Page *Project Hercules - Magaliesberg Line Tourism ProjectIntro Spoornet is leasing the Hercules Magaliesberg line to the North West Parks and Tourism Board for a nominal amount of R 1000,00 per month. This is to allow the NWPTB to run a tourist rail service that will ensure the ingress of tourism spending into the area. Socio-economic impact SMME opportunities for integrating their products or services into the rail service offering is in the process of being finalised. The rail service itself will create certain jobs in its operation and maintenance. This service constitutes an integral part of the economic development strategy in the province.

    Transport Sector Rail (cont.) North West Province

    State Owned EnterprisesSpoornet Project Initiated2002Project Finalized / Expected Date of Finalization2004Policies / Legislation created / implementedNorth West Tourism StrategyDate Cabinet Approval Received/ExpectedNorth West Province and Local GovernmentProceeds receivedProceeds expectedR 180 000 Advisors appointedLine LeaseProject Value Not quantifiable as yetRestructuring Model ChosenPublic-Public Partnership Nominal Rental AgreementJobs created / Jobs LostTourism and Rail jobs created cannot be quantified yetProject ManagerCharles ChinyavanhuContact Details011 773 2780

  • Ministry of Public Enterprises Date - * Page *Project New Ferro-Chrome Line (Brits)Intro This is line is being built to allow the export of ferro-chrome from Brits to Richards Bay. Socio-economic impact The construction of this line will ensure that the mining output is moved on the railway line and thereby prevent the degradation of the road network in the area. The road maintenance savings are significant. The construction of this line in support of the mining development and beneficiation will have significant multiplier effects in the region and locality. The total value of product moved to export would be R 2.7 Bil per annum. The total amount of inbound supplies and process elements would be plus or minus 135 Tons per annum.

    Transport Sector Rail (cont.) North West Province

    State Owned EnterprisesSpoornetProject Initiated2003Project Finalized / Expected Date of Finalization2005Policies / Legislation created / implementedDate Cabinet Approval Received/ExpectedProceeds receivedNAProceeds expectedNAAdvisors appointedProject Value R 30 milRestructuring Model Chosen Jobs created / Jobs Lost100 short term construction jobs Un-quantified mining jobsProject ManagerDanie Barnard(Chief Engineer)Contact Details012 315 4025

  • Ministry of Public Enterprises Date - * Page *Project Umtata Amabele Line UpgradeIntro The area is suffering an economic decline. Several factories and facilities have closed. The Eastern Cape Government, in conjunction with Spoornet is upgrading the line to act as an anchor infrastructure corridor. This will raise the carrying capacity of the line and thereby raise the ability to move goods from the inland areas to export facilities in East London. An IDZ has been approved at the port and rail facilities in East London. This line will be the prime connection between the IDZ and the inland areas. This line is critical to preventing environmental and infrastructural degradation, as the impact of all the traffic on road would have major environmental and road maintenance cost implications. This project has reversed the non-viable status of the line and represents the kind of outcome of the line by line analysis and regional consultative process that would be a net contributor to a regionally distributed economic value add infrastructure investment programme. Socio-economic impact The traffic on the railway line has decreased from 19 000 tons in 1997 to 7 000 tons. This traffic was mainly coal and wood poles. The upgrading of the line will support the planned industrial, mining and agricultural development in the area and is planned to raise the maximum traffic to 1.5 Million tons a year once the standing timber has matured and the mining production has come on line. The commodity profile on the line will change to mainly: timber to chipping facilities in KZN, agricultural and mining products.

    Transport Sector Rail (cont.) Eastern Cape Province

    State Owned EnterprisesSpoornetProject Initiated2002Project Finalized / Expected Date of Finalization2005Policies / Legislation created / implementedEastern Cape development support initiativesDate Cabinet Approval Received/ExpectedEastern Cape Province ApprovalProceeds receivedNAProceeds expectedNAAdvisors appointedNAProject Value R 108 MilRestructuring Model ChosenPublic-Public Partnership Jobs created / Jobs LostNot quantified as yetProject ManagerSteve BatyiContact Details011 773 2780

  • Ministry of Public Enterprises Date - * Page *Project Coega ExtensionTransport Sector Rail (cont.) Eastern Cape ProvinceIntro This line is intended to link up the Coega development with the Port Elizabeth rail network. Socio-economic impact The operation of this line will raise the financial viability of the Coega Port and the throughput on the IDZ. This will directly impact on the employment opportunities in the area. This line will reduce the costs of manufacturing and export from the Coega IDZ.

    State Owned EnterprisesSpoornet Project Initiated2002Project Finalized / Expected Date of Finalization2010Policies / Legislation created / implementedEastern Cape development support initiativesDate Cabinet Approval Received/ExpectedEastern Cape Province ApprovalProceeds receivedNAProceeds expectedNAAdvisors appointedNAProject Value R 500 MilRestructuring Model ChosenNew Line Jobs created / Jobs Lost300 construction period jobs

    Project ManagerDanie BarnardContact Details012 315 4025

  • Ministry of Public Enterprises Date - * Page *Project OREX UpgradeTransport Sector Rail (cont.) Northern Cape ProvinceIntro This line, that carries iron ore from Sishen to the Saldanha Iron Ore Terminal, is being upgraded from an annual capacity of 26 Million tons to 38 Million Tons. Socio-economic impact This raising in capacity will enable the mining industry in the province to raise production during favourable market periods and therefore extract maximum possible revenue from their operations. This expansion in production will require that additional mining jobs be created. The value of the additional iron ore that can be exported as a result of this expansion is R 1,6 Bil per annum

    State Owned EnterprisesSpoornetProject Initiated2002Project Finalized / Expected Date of Finalization2007Policies / Legislation created / implementedDate Cabinet Approval Received/ExpectedGovernment Rail ModelProceeds receivedNAProceeds expectedNAAdvisors appointedProject Value R 160 MilRestructuring Model Chosen Re-capitalisation and internal restructuringJobs created / Jobs Lost250 construction jobs 100 permanent jobsProject ManagerSteve Batyi (Spoornet)Contact Details011 773 2780

  • Ministry of Public Enterprises Date - * Page *Project Northern Cape GFB Line UpgradeTransport Sector Rail (cont.) Northern Cape ProvinceIntro This is a general upgrade of the rail network in the Northern Cape. Socio-economic impact The impact of this upgrade will primarily be felt by the mining industry and related industries. This would raise the carrying capacity of the network in the province to provide for expansion in mineral production. The upgrading of the line will support the planned mining and industrial beneficiation in the Northern Cape. The line upgrades will be prioritised in the consultative regional process to ensure maximum possible support to Provincial and Local Government development and transport strategies, as well as support to private sector initiatives with job creation or job loss reversal possibilities. The upgrade will also raise the rail safety standards.

    State Owned EnterprisesSpoornetProject Initiated2002Project Finalized / Expected Date of Finalization2008Policies / Legislation created / implementedGovernment Rail ModelDate Cabinet Approval Received/ExpectedNovember 2001Proceeds receivedNAProceeds expectedNAAdvisors appointedProject Value R 400 MilRestructuring Model Chosen Re-capitalisation and internal restructuringJobs created / Jobs Lost300 construction jobsProject ManagerDanie BarnardContact Details012 315 4025

  • Ministry of Public Enterprises Date - * Page *Project Belmont Douglas UpgradeTransport Sector Rail (cont.) Northern Cape ProvinceIntro Upgrading the line to carry additional maize and industrial products resulting from economic development initiatives by the Province. Socio-economic impact: The upgrade of the line will enable the Northern Cape farmers to deliver maize to all corners of the country. The line will open up tourism opportunities for SMMEs in the Northern Cape Province. The impact of all the additional traffic on road that results from production expansion, would have major environmental and road maintenance cost implications A Provincial irrigation scheme is established at the confluence of the Vaal and the Orange rivers. This scheme ensures a flattened traffic flow over all seasons. For the past few years, production in the area has been growing at the rate of 30 % per annum.

    State Owned EnterprisesSpoornetProject Initiated200Project Finalized / Expected Date of Finalization2004Policies / Legislation created / implementedNorthern Cape development support initiativesDate Cabinet Approval Received/ExpectedNorthern Cape Province ApprovalProceeds receivedNAProceeds expectedNAAdvisors appointedProject Value R 20 MilRestructuring Model ChosenPublic-Public Partnership Jobs created / Jobs Lost120 Construction Jobs Permanent jobs cannot be quantifiedProject ManagerCharles ChinyavanhuContact Details011 773 2780

  • Ministry of Public Enterprises Date - * Page *Project CoalLink UpgradeTransport Sector Rail (cont.) KZN ProvinceIntro This project will raise the carrying capacity of the line from 64 Mil tons to 82 Mil tons per annum. Socio-economic impact The value of the additional traffic exported on this line is R 3bil per annum. The expansion of the line capacity will ensure that the access of BEE Coal Miners to export facilities will be accommodated at similar operating and costing as that faced by RBCT owners. This is dependant on the upstream consolidation facilities currently under discussion, being in place.

    State Owned EnterprisesSpoornetProject Initiated2003Project Finalized / Expected Date of Finalization2018Policies / Legislation created / implementedGovernment Rail Model AdoptedDate Cabinet Approval Received/ExpectedNovember 2001Proceeds receivedNAProceeds expectedNAAdvisors appointedNAProject Value R 1.8 BilRestructuring Model ChosenCapitalisation and internal restructuringJobs created / Jobs Lost500 construction jobs 200 permanent jobs will be createdProject ManagerDanie BarnardContact Details012 315 4025

  • Ministry of Public Enterprises Date - * Page *Project GFB Line and Facilities UpgradeTransport Sector Rail (cont.) KZN ProvinceIntro This project is the upgrading of all fixed facilities in KZN. Socio-economic impact The raised levels of efficiency resulting from the reduced downtime experienced with outdated fixed infrastructure will put downward pressure on real pricing of rail services and raise the carrying capacity of the network. The lowered cost faced by manufacturers will raise their competitive positions in the provinces export industries. The upgrade is also intended to add into the initiatives of the Province, such as the Dube Tradeport.

    State Owned EnterprisesSpoornetProject Initiated2002Project Finalized / Expected Date of Finalization2008Policies / Legislation created / implementedGovernment Rail ModelDate Cabinet Approval Received/ExpectedNovember 2001Proceeds receivedNAProceeds expectedNAAdvisors appointedProject Value R 680 MilRestructuring Model ChosenCapitalisation and internal restructuringJobs created / Jobs Lost200 construction jobs

    Project ManagerSteve Batyi (Spoornet)Contact Details011 773 2780

  • Ministry of Public Enterprises Date - * Page *Project Ressano Garcia UpgradeTransport Sector Rail (cont.) Mpumalanga ProvinceIntro This is the capex that is required to upgrade the line for the concession agreement that has been concluded between Spoornet and CFM(the Mozamambican Railway Utility). Socio-economic impact This upgrade will raise the traffic through the Province. This upgrade will raise the access to the Port of Maputo by SMMEs and developing miners in the Province.

    State Owned EnterprisesSpoornetProject Initiated2003Project Finalized / Expected Date of Finalization2018Policies / Legislation created / implementedDate Cabinet Approval Received/ExpectedProceeds receivedNAProceeds expectedNAAdvisors appointedNAProject Value R 90 MilRestructuring Model ChosenPublic Public Partnership with Mozambican Rail Jobs created / Jobs Lost500 construction jobs

    Project ManagerSteve Batyi (Spoornet)Contact Details011 773 2780

  • Ministry of Public Enterprises Date - * Page *Project Fixed Infrastructure UpgradeTransport Sector Rail (cont.) Limpopo ProvinceIntro This project is the upgrading of all fixed infrastructure in Limpopo Province. Socio-economic impact The high rate of rail accidents will be curtailed by the significant revamping of the signaling system, thereby reducing the number of temporary line closures and the resultant cost of post accident rehabilitation. The raised levels of efficiency resulting from the reduced downtime experienced with the accidents, will put downward pressure on real pricing of rail services and raise the carrying capacity of the network. The lowered cost faced by mining and industry will raise their competitive positions in the provinces export industries.

    State Owned EnterprisesSpoornetProject Initiated2002Project Finalized / Expected Date of Finalization2006Policies / Legislation created / implementedGovernment Rail ModelDate Cabinet Approval Received/ExpectedNovember 2001Proceeds receivedNAProceeds expectedNAAdvisors appointedProject Value R 56 MilRestructuring Model ChosenCapitalisation and internal restructuringJobs created / Jobs Lost200 construction jobs

    Project ManagerDanie BarnardContact Details012 315 4025

  • Ministry of Public Enterprises Date - * Page *Project Kroonstad Ladysmith Line and Maseru Container Terminal Upgrade Transport Sector Rail (cont.) Free State ProvinceIntro This project is the upgrading of the line to ensure an export corridor for the Vereeniging/Van der Bijl/Sasolburg Industrial complex. This project includes the upgrade of the Maseru Container Terminal. Socio-economic impact This line will ensure that the industrial manufacturers have ready access to the mainline to the Durban Harbour. It will further raise the access of manufacturers in Maseru to export markets. This line also provides an alternative route for the export of agricultural products from the Free State.

    State Owned EnterprisesSpoornetProject Initiated2003Project Finalized / Expected Date of Finalization2006Policies / Legislation created / implementedGovernment Rail ModelDate Cabinet Approval Received/ExpectedNovember 2001Proceeds receivedNAProceeds expectedNAAdvisors appointedNAProject Value R 44 MilRestructuring Model ChosenCapitalisation and internal restructuringJobs created / Jobs Lost200 construction jobs

    Project ManagerSteve Batyi (Spoornet)Contact Details011 773 2780

  • Ministry of Public Enterprises Date - * Page *Project GFB Line and Facilities UpgradeTransport Sector Rail (cont.) Western CapeIntro This project is the upgrading of facilities in the Western Cape, with a special emphasis on the signaling upgrade to reduce the possibility of accidents, such as that which was recently experienced. Socio-economic impact This will raise the system efficiency in the Province and ensure that the level of incidents and accidents are reduced, thereby increasing the capacity on the line and raising the level of safety of the interlink between passenger and freight services.

    State Owned EnterprisesSpoornetProject Initiated2003Project Finalized / Expected Date of Finalization2007Policies / Legislation created / implementedGovernment Rail ModelDate Cabinet Approval Received/ExpectedNovember 2001Proceeds receivedNAProceeds expectedNAAdvisors appointedProject Value R 130 MilRestructuring Model ChosenCapitalisation and internal restructuringJobs created / Jobs Lost100 construction jobs

    Project ManagerSteve Batyi (Spoornet)Contact Details011 773 2780

    Reformat as Graph Table????

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