PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY Follow up on local public procurement Date: 5th September 2017

Contents

Rolling Stock Fleet Renewal Programme

Rolling Stock Fleet Renewal Programme

Adopted Strategy for Economic Development

PRASA’s contract with the Gibela Rail Transport Consortium

Localization Commitments Localization targets for both the supply and maintenance of the new trains: Manufacture and Supply Delivery Year May 2020 May 2021 May 2022 May 2023 May 2024 May 2025 May 2026 May 2027 May 2028 May 2029 May 2030 Local Content % 43.30% 67% 69.00% 69% 72% 72.00% 75% Contract Year 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Local Content % 50% 85% 92% 89% 87% 84% 81% 78% 77% 76% Maintenance Contract Year 2027 2028 2029 2030 2031 2032 2033 2034 2035 Local Content % 76% 74% 73% 72% 71% Local Content: is measured throughout the supply chain, i.e., up to the raw materials used within a component measures South African value add on components, i.e., if the raw material is foreign, but has local manufacturing, then the local manufacturing portion will only count as Local Content. Gibela will thus require companies within its supply chain to have Local Content commitments on their products

Localization Commitments

Phasing of Localization aligned to Manufacturing Activity

Progress to date

Localisation on the 1st 20 Trains (1/2)

Localization on the 1st 20 Trains (1/2)

New Factory: Manufacturing of Trains in SA Construction of the factory at Dunnottar Park, Ekurhuleni has advanced: Construction of Training Centre and main Car-Body Shell Building are complete Fittings and Tooling currently being installed in preparation for the start of operations Operations targeted to commence by Q4 2017 Gibela is currently in the process of on-boarding suppliers for South African manufacturing activities R1 billion manufacturing facility, including training centre

Construction of the Local Factory – SMME Development

SMME Suppliers during Construction (Phase 1)

SMME Suppliers during Construction (Phase 2)

Local Factory - Progress

Local Factory - Progress

Local Factory - Progress

Local Factory - Progress

Supplier Park: Manufacturing of Trains in SA Is a critical enabler for the development of a central industrial rail hub which will support localization Mobilization to develop the Supplier Park that supports the Local Factory is currently underway 7 Companies already have in principle agreement to have facilities in the Supplier Park

B-BBEE Procurement & Enterprise Development – Progress to date 19 QSEs and 4 BWOs have been awarded for components used for the first train manufactured in South-Africa AfroCapital (100% BWO) has been identified as a strategic supplier of value-added steel and is currently being developed by Gibela Looking forward, there is a commitment to significant preferential procurement targets: 70% B-BBEE, 13% QSE & EME and 3.5% BWO procurement Gibela has spent R14m in Enterprise Development and the overall commitments amounts to R892m over the life of the project 3 programmes have been developed to offer a variety of support to current and potential suppliers including a development fund of R124m In addition, Gibela will fund an incubator programme that will allow small companies to focus on technical aspects of their business 7 companies are currently in the selection phase for the incubator programme

Job Creation – Progress to date 1080 Citizens 969 Black Citizens 531 Skilled Black Citizens 246 Black Women 763 Black Youth Job Creation Management Control & Employment Equity Black Disabled Employees 12 Black Employees In Top and Senior Management 32 Black Women In Top and Senior Management 10 Black Employees in Middle Management 181 during manufacture, maintenance and construction to date Black Women in Middle Management 61 Black Employees in Junior Management 456 Black Women in Junior Management 81

Skills Development – Progress to Date

Maths and Science programme an example of a successful initiative kicked off in 2016

Refurbishment of Existing Fleet

Local Content Achievements – Refurbishment of Existing Fleet Major Components Labour = 100% Local Job Creation = 2241 jobs Total Local Expenditure FY16/17 = R1.34bn Total Localisation = close to 99%

Refurbishment and Overhauls - Major Suppliers

The FUTURE of South African Passenger Rail is here! Thank You The FUTURE of South African Passenger Rail is here! THANK YOU