Strategic Customer Forum Heading heading heading Date Strategic Customer Forum Operation Phakisa Eastern Cape Region: 04 November

-AAA123-20090304- Contents TNPA’s Responsibility as Landlord Operation Phakisa Response to Phakisa - Existing Facilities - Private Sector Projects Closing Remarks

Core functions (National Ports Act Section 11) Landlord Promote the use, improvement and development of ports, and control land use within the ports, having the power to lease port land under conditions it determines Optimally serve the economy Master planner Plan, improve, develop and maintain port infrastructure Regulator and Controller Make and apply rules to control navigation within port limits and approaches, loading, unloading and storage of cargo, development of ports and off-shore cargo handling facilities, ensure protection of the environment within port limits, enhancement of safety and security within port limits Controller of ports services & facilities Ensure that port services and facilities are provided, and may enter into agreements or licence other parties to provide these Marketer & administrator Ensure that adequate, affordable, equitable and efficient port services and facilities are provided for port users Change agent Ensure non-discriminatory, fair, transparent access to port services and facilities; advancement of previously disadvantaged people; promotion of representivity and participation in terminal operations; enhanced transparency in port management Coordinator with other state agencies Advise on all matters relating to the port sector, and liaise with all stakeholders 3

-AAA123-20090304- Contents TNPA’s Responsibility as Landlord Operation Phakisa Response to Phakisa - Existing Facilities - Private Sector Projects Closing Remarks

Exploring the potential of the ocean economy through Marine Transport and Manufacturing (MTM) Government policy focused on GDP and jobs growth to resolve inequality, unemployment and poverty… …Cabinet requested that Operation Phakisa evaluate potential of the Oceans Economy National Development Plan: aims to eliminate poverty and reduce inequality by 2030 by, amongst other things, growing an inclusive economy New Growth Path: provides the framework for economic policy and the driver of South Africa’s jobs strategy Industrial Policy Action Plan: specific plans to grow the economy and create jobs through industrial policy Four labs determined by Cabinet as priorities for Operation Phakisa Marine Transport and Manufacturing Oil & Gas Exploration Aquaculture Marine Protection and Governance Our lab focused on accelerating the growth of the the Marine Transport and Manufacturing sector: Marine transport: cargo handling, national registry Marine manufacturing: rig & ship repair, boat building, offshore O&G services

Operation Phakisa : GDP contribution and job creation in Marine Transport and Manufacturing (MTM) Sector Initial lab vision Baseline (2010) Target for interventions Accelerate the GDP contribution of the sector Increase the contribution to GDP by R14-23bn by 2019 ~R15bn GDP Contribution Increase total employment Increase the number of total jobs created by 40,000-50,000 jobs by 2019 ~15,000 jobs Job Creation

The Lab recommended the following initiatives for Marine Transport and Manufacturing Infrastructure and operations A Skills and capacity building B Market growth C 1 Create supportive funding and revenue model Establish purpose-built oil and gas port infrastructure by appointing Facility Operators – Saldanha Bay Align on Implementation of government policy Prioritise Transnet and TNPA funding allocation towards marine manufacturing Maintain and refurbish existing facilities Unlock investment in new and existing port facilities Implement Strategic Prioritised Project – Richards Bay Implement Strategic Prioritised Projects – East London 9 Train 2,550 TVET College graduates on an 18-month Workplace-based Experiential Learner Programme in scarce and critical trades over the 5 year period Create dedicated Occupational Teams for MTM Sector (professional, trades, operators and seafarers) Establish trade RPL, CBMT or Centres of Specialisation in Saldanha Bay and Richards Bay Train 18,172 learners as artisans, semi- skilled workers and professionals over the next 5 years Increase usage of ESSA system and targeted career awareness services as a high value recruitment tool for MTM Increase capacity to develop skills for ~1,200 ratings and ~720 officers per year 15 Create and implement a public procurement and localisation programme Develop a strategic marketing campaign and value proposition for target markets Propose inclusion of preferential procurement clause in the African Maritime Charter Support local registry of vessels through incentives and legislation of using SA-flagged ships for cargo and coastal operations (based on United Nations Conference on Trade and Development and African Maritime Charter guidelines) 2 16 10 3 17 11 4 18 12 5 13 6 7 14 8 TNPA – Transnet National Ports Authority ESSA – Employment Services of South Africa TVET – Technical and Vocational Education and Training RPL – Recognition of Prior Learning CBMT – Competency-based Modular Training 7

TNPA’s immediate focus is on addressing infrastructure constraints Infrastructure and operations A Immediate Impact on TNPA 1 Create supportive funding and revenue model Establish purpose-built oil and gas port infrastructure by appointing Facility Operators – Saldanha Bay Align on Implementation of government policy Prioritise Transnet and TNPA funding allocation towards marine manufacturing Maintain and refurbish existing facilities Unlock investment in new and existing port facilities Implement Strategic Prioritised Project – Richards Bay Implement Strategic Prioritised Projects – East London These initiatives require capital investment over the next 5 years. 2 5 7 8 2 3 4 5 6 7 8 8

-AAA123-20090304- Contents TNPA’s Responsibility as Landlord Operation Phakisa Response to Phakisa - Existing Facilities - Private Sector Projects Closing Remarks

Operation Phakisa Projects (Initiative 5) Investment in existing Ship Repair Facilities Estimated Cost Estimated investment in existing facilities : Next 5 years R 2Bn Cape Town, Durban, East London, Port Elizabeth, Saldanha Bay R 320m Projects have been identified across the ports to commence in 2015/16; The planned investments will result in the refurbishment of the existing repair facilities, including cranes and other equipment utilised at these facilities; The status of the projects are set out on the next slides;

Maintenance and Refurbishment of existing facilities : Durban Project 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 ETC Comments DURBAN 1.50 5.00 3.50 Replacement of South side crane rail at Dry Dock FEL 3: Project to be sanctioned in November 2015 Erect perimeter wall on north side of Drydock Completed Repair of inner and outer caisson of Dry Dock FEL 4: To be completed in November 2015 4.78 5.00 9.00 Execution: Dockyard Lighting and Low Voltage Electrical Distribution Upgrade Completed Welding Equipment Set for Shop 24 Project Awarded 1.57 Drydock Jib Cranes 5.00 95.00 20.00 FEL3: Project to commence in 2016/17. Feasibility completed Drydock 6 Tons Forklift Project awarded 1.23 Drydock Compressors FER: Finalizing business case 7.50 Upgrade of Floating Dock 5.00 16.60 FEL3: Completed. FEL 4 to commence in 2016/17 Feasibility: Upgrade of Dockyard Infrastructure (E&M) 1.00 5.00 4.00 FEL3: Completed. Work breakdown structure finalized. FEL 4 to commence in 2016/17 Execution: Upgrade of Dockyard Infrastructure (E&M) 10.00 50.00 70.00 40.00 Repair Concrete works in the Dock 10.00 FEL4: Project Sanctioned. Tender phase. 11 BVA-201824-042-20090201-SP-v6

Maintenance and Refurbishment of existing facilities : Cape Town and Mossel Bay Project 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 PM ETC Comments CAPE TOWN Refurbishment of Sturrock Drydock 2.00 33.00 35.00 35.00 35.00 FEL 3: To be awarded in November 2015 1.00 10.00 20.00 19.00 Refurbishment of Robinson Drydock FEL 3: To be awarded in November 2015 Refurbishment of Synchrolift 1.70 3.90 7.63 12.00 15.63 10.00 FEL 4: in execution Replacement of water circulating pumps at Sturrock dry dock 1.50 1.20 To be awarded in August 2015 Replacement of 10 cranes for Ship repair 25.00 50.00 195.00 FEL 3: Completed. To be awarded in November 2015 Widening and lengthening of Repair quay 10.00 50.00 240.00 350.00 100.00 FER : Project deferred MOSSEL BAY Refurbishment of Cradle & Side Slipway 3.00 Projects only commencing in 2016/17 Reconstruct lead-in jetty to slipway 12.00 Slipway upgrade 5.00 10.00 12 BVA-201824-042-20090201-SP-v6

Maintenance and Refurbishment of existing facilities : East London, Port Elizabeth and Saldanha Bay Project 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 ETC Comments EAST LONDON PHASE1 (Switchgear) : Execution PHASE2 (Refurbish & Upgrade) : Award November 2015 Refurbishment of Graving Dock + Refurbish Pumps 4.20 15.00 41.20 42.98 42.49 5.16 54.47 Refurbishment of Slipway Area Execute as private sector investment PORT ELIZABETH 10.73 51.50 81.93 Replacement Lead-in Jetties slipway Execution: to be completed in 2017 40 ton Slipway Refurbishment (Feasibility & Execution) New 100t hoist 19.05 58.14 Execution: to be completed in 2016 Modifications of 1200 ton slipway cradle 3.00 Execution: to be completed in 2017 SALDANHA Refurbishment of Rock Quay (GM Quay area) Feasibility & 10.00 131.00 52.06 Execution: to be completed in 2015/16 13 BVA-201824-042-20090201-SP-v6

-AAA123-20090304- Contents TNPA’s Responsibility as Landlord Operation Phakisa Response to Phakisa - Existing Facilities - Private Sector Projects Closing Remarks

Operation Phakisa Projects (Initiatives 2,7,8) The process to provide new facilities consists of the following steps : Transnet appointed Ernst & Young as Transaction Advisors to assist with implementing Initiatives 2,7,8;

Operation Phakisa Projects (Initiatives 2,7,8) Current Status Completed In Process

Operation Phakisa Projects (Initiatives 2,7,8) : Overall Scope Objective Estimated Co-funded investment required Estimated Jobs created Estimated GDP Contribution Saldanha Bay Oil and gas repair and supply base facilities Establishment of port facilities to service the Offshore Oil and gas industry within the Port of Saldanha R13.2bn 15 000 18bn Richards Bay Ship repair facilities Development of a cost effective ship repair facilities within the Port of Richards Bay R900m TBC East London boat building facilities Development of the required infrastructure to be a catalyst for the establishment of boat building in the Port of East London R515m

Operation Phakisa Projects (Initiatives 2,7,8) : Execution Phases Advisor Project Analysis Completed Business Case Development and Approval Procurement of Preferred Bidder Completed Financial close and appointment of Bidder Required Operational Date Saldanha Bay Oil and gas repair and supply base facilities Sept 2015 October 2015 Dec 2016 Sept 2017 2019 Richards Bay Ship repair facilities Nov 2015 June 2016 Sept 2016 East London boat building facilities Jan 2016 Nov 2016 Jan 2017       The Analysis and Business Case phases are in execution phase and on track to meet the indicated timelines

Local Stakeholder engagement completed Planned Engagements Place Dates SAGOA Cape Town 3 June 2015 PetroSA Dormac DCD Marine Cape town 4 June 2015 Nautic Africa DOT, DTi and DPE Johannesburg 11 June 2015 Transaction Advisor Introduction TNPA EXCO 22 June 2015 DAMEN Durban SA Shipyards 23 June 2015 Elgin Brown SAMSA           

Stakeholder engagement : International Planned Engagements Place Dates Offshore Technology Conference Houston 4 – 7 May 2015 Offshore Europe Aberdeen 8 – 11 September 2015 International market players London , China, Singapore, Korea, Netherlands, America Subsequent to Business case Formulation  

-AAA123-20090304- Initiatives 2,7,8 : Artist impressions of new facilities at Saldanha Bay and Richards Bay

Saldanha : Rig Repair Berth 205 (Artist Impression) 22

Saldanha : Mossgas Jetty (Artist Impression) 23

Saldanha : Oil and Gas Supply Base (Artist Impression) 24

Richards Bay : Ship Repair (Artist Impression)

Closing Remarks Phakisa is happening; Country growth and expansion of the economy is dependent on creating port capacity across the Port System; Oceans economy as a “new” driver for economic growth and job creation; Oil and Gas repairs/refurbishment : Significant potential to create competitive advantage for South Africa; Alignment with Saldanha IDZ and SAOGA; New Port Facilities for Storage and Repairs : Investment opportunities for private sector; Supplier Development opportunities; TNPA is fulfilling its strategic role as an Infrastructure Provider and developing an integrated port system to grow the economy;