1. Acting General Manager (Office of the C.E)
Linking Ports to Railway Infrastructure African Ports and Maritime Conference 10 December 2009
Alex Masianoga
Acting General Manager (Office of the C.E)
Transnet Freight Rail

2. 1 2 4 5 6 Presentation Outline Global & Regional Perspective
State of Port and Rail Infrastructure 4
Integration Challenges and Intermodalism 5
Transnet’s Approach 6
Conclusions

3. The Competitive Challenge for the Region
Global trade routes
Trade
Trade
Political
Political
inhibitors
inhibitors
Instability
Instability
Sustained
Sustained
Poverty
Poverty
Currency
Currency
Economic
Economic
Instability
Instability
Growth
Growth
Reliance on
Reliance on
minerals
minerals
Monopolies
Monopolies
Logistics Infrastructure not developed and integrated
The Relevance factor
Intensity of global shipping

4. Trade Agreements: Stimulate Regional Economic Growth and Create a Borderless Region
The region requires integrated transport infrastructure to move the products created by trade agreements

5. Regional Geographical Catchment Areas & Economic Centres

6. Key Drivers of Regional Growth
National Policies (Economic)
Commodities
‘Chindiafication Factor’
De- / Re-Regulation & Policy

7. Key Drivers of Rail Growth in the Region
Economic Growth
Recovery
Mining sector contributes largest volumes to GDP in Africa/ Region
Intermodalism
Immediate access to road/rail systems
Standard for freight handling (rail and ports)
Support small and large scale developments across all economic sectors, incl. mining/ bulk
Port Capacity
Rail preferential access
Higher turnaround
Better asset utilisation
Road Network
Condition
Legislative pressure
Costs: 200% more than rest of the world

8. Adequacy of Transport Infrastructure in the Region
1 December December 2018
Adequacy of Transport Infrastructure in the Region
Southern Africa Context
The Rail network provides:
A vast footprint
Strategic lines to landlocked countries
Uni-gauge (1067mm)
Links to existing and developing ports
Region benefiting from donor funding and private investment for infrastructure development
Southern Africa
Railway network
Source: Transnet Group Planning 8

9. Regional Transport Corridors & Ports

10. Regional Logistics Challenges
Africa lags behind the rest of the world in all aspects of infrastructure development -- quantity, quality, cost and access - a very fragile system
Transport infrastructure development and investment
Road; Rail; Ports
Integrated transport operations across borders
Leadership & expertise
Logistics costs
Share of world trade
Modal imbalance between road and rail
Poor sharing of resources
Political and economic instability directly influence foreign direct investment
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%
In Africa- Rail is a strategic resource

11. State of Transport Infrastructure in the Region
Capacity of the transport system and regional corridors is as good as the weakest link

12. Rail and Port Issues in the Region
Main Challenges
Road & Rail infrastructure that connects hinterland to the ports
Traffic Congestion
Infrastructure development
Conversion to containerisation not complete nor integrated
Investment and funding constraints

13. Status of Intermodalism in the Region
Response
SADC largest contributor to GDP is Mining, suited to rail
Economic growth for SADC requires development of export driven manufacturing sectors
Manufacturers require intermodal connectivity into global markets
Intermodal infrastructure is limited
Containerisation is the preferred mode of transport in international trade
It integrates SADC into global trade
It is the foundation of logistics infrastructure that will support the growth of the manufacturing sector
It creates seamless logistics corridors
It provides for productive use of modes and funds
It provides ease of operational integration with ports
It will contribute to reducing the cost of doing business
It is the bridge between 3rd and 1st world competitiveness

14. Modal Co-operation to create ‘Superhighways’ in the Region
Composition
Interchange
Decomposition
Connection
Maputo
Logistics
Corridor
Rail provides access to multi-country long haul routes
Road must create efficient local/ in-country networks
Ports are the global gateways
Freight
Trans-Kalahari Logistics Corridor
Local Distribution
National/ Regional
‘Superhighways’
Intermodal Terminals

15. Competitive Challenges: Conflicting InterestsW e s t r n S a h M l i N g C d B u k F o A f c R p b L D m T z w Z q G I v y E j K U
Maputo
Walvis
Bay
International Consortiums
focus on lock-in strategies through concession and funding mechanisms
Country Competitive Strategies
focus on lock-out through port and rail links into key markets
Competitive Port Strategies
Transhipment hub & Feeder for West Africa
Transhipment hub & Feeder Port for SADC
Namibia
Angola
Emerging contender for Feeder services
TFR strategy to develop and optimise rail corridors with SADC partners SA
Dar es
Salaam
Illustrative Competitor Strategies
Strategic position of Logistics
Companies via (Commodity Trading, Shipping,
Terminals, Rail, Road & Logistics Services)
Transhipment hub & Feeder Port for East Africa
Transhipment hub & Feeder Port for SADC

16. Strategic Approach to Regional Integration1
Corridor Approach to Economic Growth
Economic Development Nodes
Transport Corridors
Policy and Regulatory Implementation and Enforcement 2
Infrastructure Planning
System wide
Supply chain focus in support of Transport Corridors
Holistic Approach, sum is greater than the individual parts 3
Funding
Corridor logic (address weakest link first)
Optimal mix of private and public sector funding
Shared benefits

17. Transnet Approach

18. Metamorphosis of Ports and Rail
Shifts in the role of Ports : From Traditional to Knowledge / Global Economy
Public Agencies
Independent Competing Businesses
Elements in a Logistics System
Trade Enablers
Focus on
improving
internal
efficiencies
Focus on
achieving
network
efficiencies
Focus on
achieving
global
performance
Central control
Publicly owned
Harbour Boards/ Authorities
Autonomous ports
Privatised/
quasi-privatised
Internal KPI’s
Planning focus
Vertical & horizontal integration
Economic performance
Global competition
Mid 80’s
Late 90’s
Current
Shifts in the role of Rail :
From Stand Alone  Connectors
From Agriculture & Mining  Intermodal
From Engineering Run  Customer Service Focus
Rail is integral to the total ‘supply chain promise’
Port
Rail
Maritime
Customer/ Terminal

19. Rail and Port as Integrated Systems
Terminal Service
Rail
Service
Assets & Resources
Rolling Stock
People
Assets & Resources:
Terminal Equipment
People
Infrastructure
Infrastructure
Rail – Port Corridor

20. Strategic corridors linking ports, the hinterland and SADC routes, benefiting from integration and intermodalism
Northcor
Capecor
Southcor
Natalcor
R.Baycor
N.Westcor
Eastcor
N.Eastcor
Sishen-Saldanha
Sentracor
South East Cor
Westcor
Freestate
Namibia
Overborder corridors
Beit Bridge
Musina
Makhadot
Soekmekaar
Ellisras
Polokwane
Naboomspruit
Tzaneen
Thabazimbi
Phalaborwa
Nylstroom
Northam
Pienaarsrivier
Marble Hall
Hoedspruit
Rustenburg
Pretoria-
North
Steelpoort
Pyramid South
Graskop
Macmullins
Pendoring
Roossenekal
Nelspruit
Magaliesburg
Rayton
Belfast
Kaapmuiden
Komatipoort
Mafikeng
Pretoria
Witbank
Machadodorp
Lichtenburg
Krugersdorp
Sentrarand
Ogies
Vryburg
Coligny
Delmas
Vermaas
J’burg
Welverdiend
Kaydale
Vereeniging
Bethal
Ermelo
Hotazel
Ottosdal
Klerksdorp
Volksrust
Orkney
Sasolburg
Erts
Pudimoe
Makwassie
Newcastle
Kroonstad
Piet Retief
Golela
Nakop
Sishen
Dundee
Warrenton
Gunhill
Vryheid
Upington
Bethlehem
Theunisen
Harrismith
Postmasburg
Danskraal
Kimberley
Ladysmith
Empangeni
Kakamas
Boksputs
Marseilles
Bergville
Estcourt
Bloemfontein
Maseru
Cedara
Koffiefontein
Richards Bay
Prieska
Belmont
Sannaspos
Underberg
Pietermaritzburg
Cato Ridge
Stanger
Copperton
Kokstad
Aliwal North
Springfontein
Richmond
Barkly East
Durban
Bitterfontein
De Aar
Dreunberg
Liebendal
Burgersdorp
Harding
Noupoort
Stormberg
Maclear
Port Shepstone
Rosmead
Calvinia
Hutchinson
Sterkstroom
Umtata
Cradock
Queenstown
Cookhouse
Stutterheim
Beaufort West
Somerset East
Fort
Beaufort
Kalbaskraal
Klipplaat
Blaney
Dal
Josafat
Touwsrivier
Alicedale
Saldanha
Atlantis
East London
Worcester
Uitenhage
New
Brighton
Oudtshoorn
Port Alfred
Kraaifontein
Avontuur
Patensie
Cape Town
Bellville
Port Elizabeth
Mosselbaai
George
Knysna
Bredasdorp

21. Creating Integrated Rail/ Port Freight Corridors
Fit-for-purpose, efficient Transport Linkages
Integrate Operations, Planning, and Resource utilisation of Ports and Rail
Macro and Micro Interface Port / Rail structures for operations and infrastructure maintenance
Integrated Port/ Rail Expansion and Investment Programmes
In-port Rail Enhancement Projects i.e. Kingsrest rail stack in Durban
Joint Industry and Customer Consultation
Joint Benefits and Performance tracking
No “Us and Them” – Teamwork is the key
Integrated Freight Corridors require aligned strategies for both Rail and Ports
Immediately establish efficient transport linkages between ports and major industrial areas through process, systems and resources improvement
Consultation with strategic customers/ Industries re their market growth strategies
Logistics asset acquisition aligned with freight requirements
In-port rail enhancement projects, shunting yards/ parks feeding stockpile and stack areas
Develop/ upgrade inland rail terminals for break-bulk and Intermodal to effectively “hub” cargo from non-corridor areas and rail it directly into the port
Joint Master Network Planning
Joint Investment Planning and Capital submissions

22. Critical Success Factors for Rail/Port Integration1
Services
Joint Customer/ Industry strategies
Preferential access for Rail into terminals
Information sharing and planning 2
Assets and Resources
Quick turnaround of rolling stock
Joint efficiency targets
Joint investment planning 3
Infrastructure
Modernised, well maintained rail infrastructure
Joint developmental objectives incl. spatial development
Integrated investment cases

23. Africa: Strategic Approach
Service Focus
Geographic Focus
Uniformity of Service – Reliability & Predictability
Corridor throughput optimisation and management
Migrate to block trains
Load consolidation at Ndola and Lusaka
Manage wagon turnaround
Make services customer friendly
Integrated planning and operations with Ports
Alliances
Operator focus for joint planning and execution
Supply of Resources
SADC
SARA alignment on marketing strategy
Bilateral and Interface Agreements with overborder railways
Similar Operating model on all corridors
Position SARA in the SADC trade protocol
Joint alignment at CEO level
Beyond SADC
Selective involvement augment to SA/ SADC business
Objectives
Protect
Corridors
Grow
Volumes
Reduce the cost of logistics
(20-25%) for SADC countries
Influenced by global trade flows and industry developments

24. Forecast Rail and Corridor Growth in SADC (mt)
Malawi
Zambia
Botswana
Namibia
South Africa
Mocambique
United Republic of Tanzania
Democratic Republic of Congo
Zimbabwe
Angola
Swaziland
Africa
TFR (Mt)
’09/10
’10/11
’11/12
Forwarded
1.03
0.6
0.8
Received
4.7
5.4
6.7
80% of rail freight in SADC is northbound
70% of these flows return empty
Rail has SARA ‘corridor’ agreements
TFR focuses on integration of strategic corridors through integrated rail operations with SARA and Concessionaires
Key opportunities:
Intermodal
Fuel
Sulphuric Acid
Maize

25. Transnet participation in mechanisms to promote Regional Integration between Rail and Ports
30 year Infrastructure Plan
Inter-operability
Initiatives
SADC Initiatives
SARA
UAR
UIC
Operations & Information Technology
Human Resources
Includes SADC corridors
Infrastructure & Equipment
Marketing

26. Rail and Ports: Integrated Capital Investments
1 December December 2018
Rail and Ports: Integrated Capital Investments
Source : Transnet Corporate Plan 26

27. High potential growth in the Region
Conclusions
High potential growth in the Region
Region has to promote Intermodalism
Rail and Port Infrastructure developed, and developing to enable trade flows, however not in a co-ordinated manner
Rail and Ports not managed as strategic resources within a broader logistics system
Aligned Public and Private partnerships
Regional development requires:
Joint Planning, Investment and Funding
Integrated Operating Systems
The “Will to make it Work”

28. Thank You