1. Click to edit Master title style Heading heading heading Date Strategic Customer Forum Operation Phakisa Eastern Cape Region: 04 November

2. TNPA’s Responsibility as Landlord Operation Phakisa Response to Phakisa - Existing Facilities - Private Sector Projects Closing Remarks Contents 2

3. Core functions (National Ports Act Section 11) Optimally serve the economy Master planner Landlord Marketer & administrator Regulator and Controller Coordinator with other state agencies Change agent 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 Plan, improve, develop and maintain port infrastructure 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 Ensure that adequate, affordable, equitable and efficient port services and facilities are provided for port users 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 Advise on all matters relating to the port sector, and liaise with all stakeholders 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 3

4. TNPA’s Responsibility as Landlord Operation Phakisa Response to Phakisa - Existing Facilities - Private Sector Projects Closing Remarks Contents 4

5. 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 5

6. Operation Phakisa : GDP contribution and job creation in Marine Transport and Manufacturing (MTM) Sector Initial lab visionTarget for interventions GDP Contribution Job Creation Baseline (2010)  Accelerate the GDP contribution of the sector ▪ Increase the contribution to GDP by R14-23bn by 2019 ▪ ~R15bn  Increase total employment ▪ Increase the number of total jobs created by 40,000-50,000 jobs by 2019 ▪ ~15,000 jobs 6

7. The Lab recommended the following initiatives for Marine Transport and Manufacturing Infrastructure and operationsSkills and capacity buildingMarket growth ▪ 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 ▪ 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 ▪ 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) i.TNPA – Transnet National Ports Authority ii.ESSA – Employment Services of South Africa iii.TVET – Technical and Vocational Education and Training iv.RPL – Recognition of Prior Learning v.CBMT – Competency-based Modular Training 7

8. TNPA’s immediate focus is on addressing infrastructure constraints These initiatives require capital investment over the next 5 years. Immediate Impact on TNPA Infrastructure and operations ▪ 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 8

9. TNPA’s Responsibility as Landlord Operation Phakisa Response to Phakisa - Existing Facilities - Private Sector Projects Closing Remarks Contents 9

10. Operation Phakisa Projects (Initiative 5) Investment in existing Ship Repair FacilitiesEstimated Cost Estimated investment in existing facilities : Next 5 yearsR 2Bn Cape Town, Durban, East London, Port Elizabeth, Saldanha BayR 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; 10

11. Maintenance and Refurbishment of existing facilities : Durban 1.50 5.00 3.50 14/1515/1616/1717/1818/1919/2020/2121/2222/23ETC Replacement of South side crane rail at Dry Dock Erect perimeter wall on north side of Drydock Repair of inner and outer caisson of Dry Dock Execution: Dockyard Lighting and Low Voltage Electrical Distribution Upgrade Welding Equipment Set for Shop 24 Drydock Jib Cranes Drydock 6 Tons Forklift Drydock Compressors Upgrade of Floating Dock Feasibility: Upgrade of Dockyard Infrastructure (E&M) Repair Concrete works in the Dock Execution: Upgrade of Dockyard Infrastructure (E&M) 4.78 5.00 9.00 5.00 95.00 20.00 5.00 16.60 1.57 1.23 7.50 1.00 5.00 4.00 10.00 50.00 70.00 40.00 10.00 DURBAN Project FEL 3: Project to be sanctioned in November 2015 Comments Completed FEL 4: To be completed in November 2015 Completed Project Awarded FEL3: Project to commence in 2016/17. Feasibility completed Project awarded FER: Finalizing business case FEL3: Completed. FEL 4 to commence in 2016/17 FEL3: Completed. Work breakdown structure finalized. FEL 4 to commence in 2016/17 FEL4: Project Sanctioned. Tender phase. 11

12. Maintenance and Refurbishment of existing facilities : Cape Town and Mossel Bay 2.00 33.00 35.00 35.00 35.00 14/1515/1616/1717/1818/1919/2020/2121/22PMETC Refurbishment of Sturrock Drydock Refurbishment of Robinson Drydock Refurbishment of Synchrolift Replacement of water circulating pumps at Sturrock dry dock Replacement of 10 cranes for Ship repair Widening and lengthening of Repair quay Refurbishment of Cradle & Side Slipway Reconstruct lead-in jetty to slipway Slipway upgrade 1.70 3.90 7.63 12.00 15.63 10.00 10.00 50.00 240.00 350.00 100.00 25.00 50.00 195.00 3.00 5.00 10.00 CAPE TOWN Project 1.00 10.00 20.00 19.00 1.50 1.20 MOSSEL BAY 12.00 FEL 3: To be awarded in November 2015 Comments FEL 3: To be awarded in November 2015 FEL 4: in execution To be awarded in August 2015 FEL 3: Completed. To be awarded in November 2015 FER : Project deferred Projects only commencing in 2016/17 12

13. Maintenance and Refurbishment of existing facilities : East London, Port Elizabeth and Saldanha Bay 14/1515/1616/1717/1818/1919/2020/2121/2222/23ETC Refurbishment of Graving Dock + Refurbish Pumps Refurbishment of Slipway Area Replacement Lead-in Jetties slipway 40 ton Slipway Refurbishment (Feasibility & Execution) New 100t hoist Modifications of 1200 ton slipway cradle Refurbishment of Rock Quay (GM Quay area) Feasibility & 3.00 EAST LONDON Project 5.16 54.47 SALDANHA 4.20 15.00 41.20 42.98 42.49 PORT ELIZABETH 10.73 51.50 81.93 19.05 58.14 10.00 131.00 52.06 Comments PHASE1 (Switchgear) : Execution PHASE2 (Refurbish & Upgrade) : Award November 2015 Execute as private sector investment Execution: to be completed in 2017 Execution: to be completed in 2016 Execution: to be completed in 2015/16 13

14. TNPA’s Responsibility as Landlord Operation Phakisa Response to Phakisa - Existing Facilities - Private Sector Projects Closing Remarks Contents 14

15. Operation Phakisa Projects (Initiatives 2,7,8) 15 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;

16. Operation Phakisa Projects (Initiatives 2,7,8) 16 Current Status Completed In Process

17. Operation Phakisa Projects (Initiatives 2,7,8) : Overall Scope ProjectObjectiveEstimated 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 R13.2bn15 00018bn Richards Bay Ship repair facilities Development of a cost effective ship repair facilities within the Port of Richards Bay R900mTBC 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 R515mTBC 17

18. ProjectAdvisor Project Analysis Completed Business Case Development and Approval Procurement of Preferred Bidder Completed Financial close and appointmen t of Bidder Required Operationa l Date Saldanha Bay Oil and gas repair and supply base facilities Sept 2015October 2015Dec 2016Sept 20172019 Richards Bay Ship repair facilities Nov 2015 June 2016Sept 20162019 East London boat building facilities Jan 2016 Nov 2016Jan 20172019 Operation Phakisa Projects (Initiatives 2,7,8) : Execution Phases 18 The Analysis and Business Case phases are in execution phase and on track to meet the indicated timelines

19. Local Stakeholder engagement completed Planned EngagementsPlaceDates SAGOACape Town3 June 2015 PetroSACape Town3 June 2015 DormacCape Town3 June 2015 DCD MarineCape town4 June 2015 Nautic AfricaCape Town4 June 2015 DOT, DTi and DPEJohannesburg11 June 2015 Transaction Advisor IntroductionTNPA EXCO22 June 2015 DAMENDurban22 June 2015 SA ShipyardsDurban23 June 2015 Elgin BrownDurban23 June 2015 SAMSADurban23 June 2015 19

20. Stakeholder engagement : International Planned EngagementsPlaceDates Offshore Technology ConferenceHouston4 – 7 May 2015 Offshore EuropeAberdeen8 – 11 September 2015 International market players London, China, Singapore, Korea, Netherlands, America Subsequent to Business case Formulation 20

21. Initiatives 2,7,8 : Artist impressions of new facilities at Saldanha Bay and Richards Bay 21

22. Saldanha : Rig Repair Berth 205 (Artist Impression) 22

23. Saldanha : Mossgas Jetty (Artist Impression) 23

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

25. Richards Bay : Ship Repair (Artist Impression) 25

26. 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; 26 Closing Remarks

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