TRANSNET PRESENTATION ON THE INDUSTRIAL POLICY ACTION PLAN TO THE PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY
Chris Wells: Acting Group Chief Executive16 April 2010
CONFIDENTIAL
22
1. Transnet Performance and targets
2. Cost of doing business regarding rail and freight
3. Utilising public procurement spend to reduce supply chain costs- challenges and implications
4. Opportunities and challenges presented by IPAP2
Contents
Topics
33
The need for a turnaround strategy in 2004
• Huge derivative liabilities arising from unfavourable contracts entered into with major clients for the transportation of commodities
• Pension funds reflected deficits• Loss making non-core businesses in the Group• Low profitability• Gearing ratio had reached an unsustainably high level of 83%
Liabilities
Investment • Absence of a structured investment programme even though key infrastructure
and rolling stock badly needed maintenance and replacement• Low returns on investments and delays in execution
Market share • Competition (mainly from road operators) was eating into Transnet’s market share.
General Freight volumes declined by 2.5% p.a. between 1997 and 2003 • Constraints in capacity and efficiencies handicapped growth
• The company was not sufficiently oriented towards its customers• Low efficiencies resulted in congestion at the ports and unstable service delivery in
freight transport
Efficiencies
Transnet was facing a number of challenges
44
Revenue
• Continuous increase in revenue showing results of
initiatives to grow the business, with revenue
increasing from R25.3bn in 2004/05 to R33.6bn in
2008/09 (7.4% CAGR)
EBITDA
• Improvements through:
Operational efficiency improvements, effective cost cutting initiatives, mainly due to reengineering projects
Sale of non-core businesses
• Improvement from R7.9bn in 2004/05 to R13.2bn in 2008/09 (13.7% CAGR)
• Balance sheet restructuring and cost effective debt structures yielding positive results with consistent below target gearing from 61% in 2004/05 to 36.2% in 2008/09
• This enables Transnet to fund capital investments more cost effectively and without government guarantees 08/0
9
36%
07/08
30%
06/07
39%
05/06
46%
04/05
61% 50%Max
Gearing (%)
Transnet has effected a successful financial turnaround over the past six years
13.212.810.710.4
7.9
04/05
05/06
06/07
07/08
08/09
33.630.1
26.926.025.3
08/09
07/08
06/07
05/06
04/05
R billion
R billion
55
18.519.4
15.8
11.7
6.6
Capital investment has shifted to a new trajectory
Transnet Group Historical Capital Investment(R billion)
2008/09
2007/08
2006/07
2005/06
Total Investment over past 5
years:R72bn
2009/10 e
15,29216,22617,119
21,91322,831
10/11
14/15
13/14
12/13
11/12
R m
illio
n
Current 5 year investment
plan:R93.4bn
Transnet 5 year Capital Investment(R million)
66
“The Transnet R80bn capital investment programme (based on 2009/10 5-year plan) will make a significant contribution in terms of additional GDP – both in terms of magnitude and spread”
(2018 difference with and without investment programme)
Direct impact Indirect impact Induced impact Total impact
Impact on GDP (m) R 38 436 R 31 712 R 42 399 R 112 548
Impact on Capital Formation (m) R 116 797 R 67 079 R 86 043 R 269 920
Impact on Employment [numbers] 119 108 193 154 263 594 575 856
Skilled 27 105 43 589 62 742 133 436
Semi-skilled 57 475 79 869 105 435 242 778
Unskilled 34 529 69 696 95 417 199 642
Source: DPE Study, Measurement of the impact of Transnet on the South African economy, 2010
77
Rail
Ports
Pipelines
Transnet has improved efficiencies but operations are not yet at world class levels
Locomotive efficiency (gross ton per loco) exceed set targets for GFB
Overall reduction in number of derailments compared to previous year
Overall availability and reliability of rolling stock improved as a result of maintenance regime
Iron ore line tempos continue to improve
Turnaround times of wagonsPredictability service delivery (on-
time departures and arrivals)Reduction in number of train
cancellationsReducing security incidents (i.e.
cable theft)
Achievements Efficiencies to be improved
Improved planning/integration with rail
Loading rates at Saldanha Iron Ore Terminal (export iron ore)
Shipping delays due to tugs and pilots
Container handling ratesShip turnaround times
Achievements Efficiencies to be improved
Increased capacity utilisation in Durban-Jhb pipeline through drag-reducing agents
Successful implementation of Bridging Plan
Maintain world-class efficiency
Achievements Efficiencies to be improved
Certain efficiencies not meeting world class
standards
88
Reduce wagon cycle/turnaround times by 21.1%
Reduce deviation from schedule by 26.8% (departures/arrivals)
Improve locomotive efficiencies by 33.2% (GTK/loco/month)
Rail
Ports
Improve cargo handling efficiency from 22 to 28 with target of 30 GCM/h
Reduce shipping delays and ship turnaround time (Durban) and increase
Volumes per STAT Hour by 21%
Security of supply and reduce production interruptions by 21.5%
Pipelines
• Average 8.4% increase in
operational efficiency and
productivity
• Cumulative 20%
improvement over 3
years
Quantum leap targets for 2010/11
5-Year Corporate Plan Deliverable*
* Improvements/reductions – average improvement for all relevant KPIs from 2009/10 to 2014/15
Challenging efficiency targets have been set across all operations
Improved customer service delivery
99
14/15
13/14
12/13
11/12
10/11
09/10
50
Gearing (%)
3,0
3.5
14/15
4.1
13/14
3.4
12/13
3.1
11/12
3.0
10/11
3.2
09/10
11.2
13/14
10.0
12/13
9.6
11/12
8.9
10/11
7.4
09/10
6.58
14/15
Return on Total Assets (%)
Cash interest cover (times) Max/min
10
EBITDA (Rm)
15 116
+19%
14/15
30 435
13/14
26 311
12/13
22 965
11/12
19 765
10/11
09/10
12 759
1) The improvement in EBITDA and EBITDA margin is largely driven by the cumulative growth in volumes of 40% over the 5-years.
2) Improvement in operational efficiencies (8.4% in 2010/11) resulting in lower cost structures
Projected financial performance and key ratios
Budget+
LE
LE
LE
LE
1010
1. Transnet Performance and targets
2. Cost of doing business regarding rail and freight
3. Utilising public procurement spend to reduce supply chain costs- challenges and implications
4. Opportunities and challenges presented by IPAP2
Contents
Topics
1111
SA is ranked 28th out of 155 countries and is the highest logistics performer amongst upper middle income countries
Country LPI Customs Infrastructure International shipments
Logistics competence
Tracking & tracing
Timeliness
High income: all (income average) 3.55 3.36 3.56 3.28 3.5 3.65 3.98
South Africa 3.46 3.22 3.42 3.26 3.59 3.73 3.57
Upper middle income (income
average) 2.82 2.49 2.54 2.86 2.71 2.89 3.36
1212
The cost of logistics in South Africa in 2008 was R339 Billion (14.7% of GDP)
• South Africa has a GDP of R2.3 trillion,
• We transport goods weighing 935 million tons
• Over an average transport distance of 337 km
• At a cost of R339 billion • Plus an additional R34 billion
for externalities
Logistics costs as a percentage of GDP is at its lowest level since measurement started.
Source: 2009 State of Logistics Survey
• South Africa saw an increase of 6,9% in logistics costs to R339-billion in 2008, compared with the previous year’s R317-billion, and 2004’s R213-billion
• Despite the increase, 2008 costs were at their lowest as a percentage of gross domestic product (“GDP”) since the survey was first introduced in 2004, totaling 14,7% of GDP, down from last year’s 15,9%.
1313
Share of cost by category%
Cost breakdown by categoryIndexed 2003 for 2008
80
130
180
230
280
2003 2004 2005 2006 2007 2008
Inde
xed
= 2
003
Transport Storage and PortsManagement, Admin & Profit Inventory carrying cost
Inventory carrying cost
Management, Admin & Profit
Storage and Ports
Transport
Transport costs and inventory carrying costs have increased at a faster rate than other cost components
Implications for supplier development
• South Africa requires more transport over
the coming years.
• High forecast volume growth will put an
impossible strain on current transport
infrastructure if the current modal split
remains intact.
• Increasing rail market share will reduce
transport costs.
• Furthermore, if the oil price significantly
increases, this will seriously harm the
country’s competitiveness.
• Therefore, mitigation against oil price
fluctuations is critical.
• Increase in electricity tariffs places
additional costs and informs infrastructure
and rolling stock procurement strategies.
19%
50%
14%
17%
1414
Next steps
Transnet is focused on increasing rail market share through greater operating efficiencies and a wider employment of intermodal solutions
Source: Transnet Freight Demand Model and the Logistics Cost Model
0
10
20
30
40
50
60
Ran
d bi
llion
39% of ton.km23% of tons9% of transport costs
39% of ton.km23% of tons9% of transport costs
• Planned volume growth of 7%
per annum over the next 5
years which is approximately
3% in excess of GDP growth,
mainly in:
• General Freight (domestic
coal, containers on rail,
manganese and other
identified commodities)
• Export coal and iron ore in
line with industry
requirements and
international demand
• Port and Pipeline activities
directly linked to GDP
growth and demand
(economic activity)
Cost of Transport
1515
However, perception of rail is weak globally in comparison to other modes
Source: World Bank, Connecting to Compete, 2010
“So far there are few examples of efficient
container movement by rail that compete with
roads”
“Price signalling alone is unlikely to encourage a substantial shift towards
freight rail beyond captive markets such as
bulk goods”
1616
1. Transnet Performance and targets
2. Cost of doing business regarding rail and freight
3. Utilising public procurement spend to reduce supply chain costs- challenges and implications
4. Opportunities and challenges presented by IPAP2
Contents
Topics
1717
Transnet has increased its spend with BBBEE suppliers significantly over the past 4 years
Source: Transnet
• Significant focus has been placed on the BBBEE scorecard ratings
• Emphasis has been placed on improving on Preferential Procurement and Enterprise Development
• Spend with BBBEE companies has increased significantly
201020102009200920082008
BBBEE Spend (R billions)
1818
Off a Total Procurement Spend of R20,68bn R13.52bn was spent on BBBEE companies in 2009/10
BEE procurement
R13.5bn accounting for 65.35% of total procurement spend against a target of 65%
Exempted Micro Enterprise (turnover below R5m) procurement
R1.9bn accounting for 9.23% of total procurement spend against a target of 5%
Qualifying Small Enterprise (turnover between R5m and R35m) procurement
R2.7bn accounting for 13.24% of total procurement spend against a target of 5%
Black Women Owned (30% shareholding) procurement
R837m accounting for 4.05% of total procurement spend against a target of 6%
Black Owned (50% shareholding) procurement
R3.1bn accounting for 15.33% of total procurement spend against a target of 9%
1919
Supplier development is influenced by industrial policy and Transnet is currently partnering with government on a number of key action plans
Strengthen NIPP
Strengthen alignment between CSDP and NIPP
Alignment between BBBEE and industrial policy
• Transnet has made significant progress in the adoption of CSDP. Over the past two years a phased approach to embedding CSDP at Transnet has been followed:
• Phase 1: Develop the Plan;
• Phase 2: Build the Foundation; and
• Phase 3: Embed CSDP.
• Significant CSDP transactions leading to high value supplier development interactions have been concluded with:
• EMD; and
• GE.
• Transnet will augment its short term purchasing strategy with a move towards more long term strategic Fleet Procurement (Locomotives).
• Transnet, together with UNIDO, is participating in the National Foundry Technology Network (NFTN), which is an initiative with the key objective of facilitating the development of a South African foundry industry through appropriate skills training and technology transfer.
• Transnet has made significant progress in the adoption of CSDP. Over the past two years a phased approach to embedding CSDP at Transnet has been followed:
• Phase 1: Develop the Plan;
• Phase 2: Build the Foundation; and
• Phase 3: Embed CSDP.
• Significant CSDP transactions leading to high value supplier development interactions have been concluded with:
• EMD; and
• GE.
• Transnet will augment its short term purchasing strategy with a move towards more long term strategic Fleet Procurement (Locomotives).
• Transnet, together with UNIDO, is participating in the National Foundry Technology Network (NFTN), which is an initiative with the key objective of facilitating the development of a South African foundry industry through appropriate skills training and technology transfer.
IPAP Key Action PlansIPAP Key Action Plans Transnet’s Participation in IPAPTransnet’s Participation in IPAP
Overhaul of PPPFA
Identification of strategic fleets
Source: Transnet and IPAP2
Current phase
2020
Transnet has already secured three major CSDP transactions
§ The current CSDP plan with EMD was finalised in November 2009.§ The EMD CSDP plan aims for (1) TRE to become part of EMD’s Global Supply Chain for
rebuilt traction motors and diesel engines, (2) to accredit TRE’s maintenance facilities for EMD locomotive maintenance and (3) to localise the supply of at least 10% of the value and/or quantity of the parts listed per the Spare Parts Agreement.
§ These CSDP goals will be achieved through the transfer of skills and relevant intellectual property required to carry out the activities mentioned.
§ EMD is already actively supporting TRE in acquiring new work in Africa. Such deals will be handled on a partnership basis – TRE is to do the work but commits to purchase the parts from EMD.
§ Execution of the EMD CSDP plan is well underway – Tooling has already been provided and EMD experts (approximately 5 at any one time) have been on the floor since 1 January 2010, guiding, training and advising employees to achieve the desired end state.
§ The contract for the building of the 100 Locomotives was awarded to GE and signed on 17 December 2009.
§ GE developed a CSDP plan consisting of 3 main initiatives – training for maintenance development, Lean Six Sigma and Candidate Engineers; localisation of various components and parts as well as a licence agreement with TRE for the overhaul and modernisation of GE locomotives.
§ The details of this plan are under negotiation with every attempt being made by Transnet to ensure that activities provided meet the desired end state.
§ The signing of the CSDP Plan is likely to be postponed to June 2010 to ensure that a licensing commitment is reached between GE and Transnet.
§ The Licence Agreement would allow for TRE and GE to enter into a technology partnership for locomotive overhauls and modernisations, with GE being the prime contractor and TRE the sub-contractor.
• The GE 100 loco deal is the biggest CSDP transaction to date making Transnet the leader in CSDP execution
• The DPE has indicated their satisfaction with Transnet ‘s CSDP progress thus far
• TRE will be a centre of excellence for locomotive OEMs.
EMD:Spare partsContract Value:R550 million
GE: 100 Loco dealContract Value:R2.6 billion
50 “Like new” locomotives
§ 50 “Like-new” programme now complete under the equivalent of the CSDP Framework using Transnet Rail Engineering
2121
CSDP/SD Component Strategic Thrust
Transnet has also had a number of successful Supplier Development (SD) initiatives over the past 3 years resulting in significant development opportunity for the local industry
•Local manufacturing of railway crossings
•Transnet and the National Foundry Technology Network matched foundry to 100% local supply component
•CSDP obligations were also included into the new tenders
•Local re-profiling of gears•Feasibility study to establish localisation opportunity
•Skills Development•Building a Cargotec (port handling equipment and freight solutions) training school with free training hours
•Specific will be centred around Ngqura
•Has previous NIPP obligations which they need to fulfill within 7 years from start of obligation
•Training facility
•Training for approximately 20 TRE maintenance practitioners
Extension of the 19E contract – electric locomotive – by 35 vehicles
2222
Further opportunity exists to participate in Government’s metal fabrication, capital equipment and transport equipment key action plan (KAP)
New Areas of Focus
Metal Fabrication, capital equipment and transport equipment
Opportunities for growing the sector / achieving higher impact include:
•Leveraging the public infrastructure programme presents an opportunity to stimulate the industry through reducing import leakage of the capital and operational expenditure programmes.
•Export opportunities in the rest of Africa and South America.
•Opportunity to extend value chains through further downstream manufacturing.
Opportunities for growing the sector / achieving higher impact include:
•Leveraging the public infrastructure programme presents an opportunity to stimulate the industry through reducing import leakage of the capital and operational expenditure programmes.
•Export opportunities in the rest of Africa and South America.
•Opportunity to extend value chains through further downstream manufacturing.
Key Action Programme
Transnet, working together with the United Nations Industrial Development Organisation (“UNIDO”), is participating in the National Foundry Technology Network (“NFTN”), which is an initiative with the key objective of facilitating the development of a South African foundry industry through appropriate skills training and technology transfer.
Outcomes of this initiative:
• Reduced import leakage;
• Increased investments in key manufacturing processes and activities; and
• Increased employment.
Key Action Programme
Transnet, working together with the United Nations Industrial Development Organisation (“UNIDO”), is participating in the National Foundry Technology Network (“NFTN”), which is an initiative with the key objective of facilitating the development of a South African foundry industry through appropriate skills training and technology transfer.
Outcomes of this initiative:
• Reduced import leakage;
• Increased investments in key manufacturing processes and activities; and
• Increased employment.
Source: 2010/11 – 2012/13 Industrial Policy Action Plan
2323
Integrated South African Procurement
Academy (ISAPA): Independent Procurement Academy has been established.
BOOTCAMPS:Three successful boot camps have been held to train procurement staff nationally in professional procurement principals.
Member of the Chartered Institute ofPurchasing and Supply (MCIPS): • Transnet launched a comprehensive
procurement capability building programme.
• Core to the programme is an ambitious procurement skills development programme, that is being run in partnership with the Chartered Institute of Procurement in the UK.
• Presently, 235 learners are registered in courses of the programme.
• During phase 1, twelve people have already achieved a fast-track globally recognised honours degree in procurement from the programme.
Capability Building Collaboration forum
Initiated the use of the R&HSCA (Rail & Harbour Supply Chain Association) as a collaborative initiative with local tier 2 & 3 suppliers.
The focus of the association is on exchange of current trends, research and development, future plans and local supplier capability.– SADC operators will also be
encouraged to participate allowing local suppliers to expand into Africa.
• Transnet in partnership with UNIDO:
Has established a benchmarking program of its top twenty tier two South African suppliers as well as the top 60 tier 3 suppliers.
The objective is to enhance the competitiveness of these suppliers and position them as key components of the Transnet Original Equipment Manufacturers supply chain.
To execute on the IPAP requirements, Transnet will focus on its procurement skills and capabilities
2424
1. Overview of Transnet Performance
2. Cost of doing business regarding rail and freight
3. Utilising public procurement spend to reduce supply chain costs- challenges and implications
4. Opportunities and challenges presented by IPAP2
Contents
Topics
2525
Proposed IPAP action plans
• Over the IPAP period the intention is to identify eight to ten large and strategic procurement “fleets”.
• Locomotives, wagons and coaches for freight and commuter rail procured by Transnet and the Passenger Rail Agency of South Africa (“PRASA”) have been selected as a strategic fleet.
• IPAP ensures a mechanism to “designate” large, strategic and repeat “fleet” procurements.
• Procuring entities of designated “fleets” will be required to develop a long-term strategic plan in conjunction with DTI which sets out a detailed specification of the tender setting out explicitly the sequentially increase of local procurement and supplier development requirements.
Migration to programmatic fleet procurement practices provides significant value opportunity for Transnet
Opportunities for Transnet
• Migration from Transactional procurement of locomotive fleet to strategic programmatic procurement practices resulting in:
• Standardisation of local fleet and a standardisation strategy commensurate with international demand to ensure industry sustainability
• Alleviation of the legislative restriction on long term supplier contracts to enhance the opportunity for supplier development (migration from 5 year contracts to 15 year engagements)
• Improved demand visibility resulting in stronger investment commitment from international OEMs
• Renewal of current fleet resulting in improved availability, reliability and reduced cost increased volume capacity
Source: 2010/11 – 2012/13 Industrial Policy Action Plan
2626
There is significant demand to support a strategic procurement programme as envisaged in IPAP2
SA can become supplier to Africa, Australia, Brazil and all other countries that run on Cape (1067mm) or metric (1000mm) gauge.
Can supply new as well as upgrade locomotives for abovementioned countries.
Negate FOREX influence on a major portion of locomotive prices for Transnet.
Boost steel industry in SA by using local supply for structural components.
Stimulate control system industry in SA by increasing technology requirement.
Increased requirements for special steel and copper for electric motor building.
Increase overall engineering & technological capability of SA.
• Transnet has developed a locomotive fleet plan which is aimed at reducing the average age of the locomotive fleet from 30 years to below 20 years.
• To achieve this Transnet will purchase between 75 and 100 locos per annum over a prolonged period.
• Through smoothing the acquisition cycle, Transnet will better enable local development by providing a stable pattern of demand.
• Transnet is also developing a fleet plan for cranes and is investigating CSDP opportunities through this plan.
2727
Transnet is in full support of the Industrial Policy Action Plan and anticipates a number of advantages for Transnet and its domestic supplier industry arising from the implementation of the Plan
• A world class freight system is critical for increased industrialisation in South Africa and the region.
• Transnet is focused on improving market share and customer service through an enhanced focus on operating efficiencies, infrastructure investment and public private partnerships.
• Transnet remains committed to strengthening its role as an active IPAP partner by accelerating the implementation of CSDP across the business.
• Transnet can gain significantly from a migration to programmatic procurement.
27
2828
Thank You
2929
Additional Information
3030
Capital Investment Plan by Nature and Asset Type
11.8 13.2 12.0 10.8 11.4
2014/15
3.9
2013/14
5.5
2012/13
5.1
2011/12
8.7
2010/11
Budget
11.0
Replacement
Expansion
Capital Investment Expansion (R34.2bn) vs Replacement
(R59.2bn)
Pipeline networks
11.5Aircraft, Machinery,
Equipment and
furniture
6.6
Wagons
18.7
16.8
Permanent way
and works
Land, Buildings
and Structure
6.6
Port Facilities
15.1
15.1Locomotives
3.0
Floating Craft
Five-Year Investment in Assets (Rbn)
5-YEAR CAPITAL INVESTMENT: R93.4bn
Major Projects 2010/11 Budget
Next 4 years
Ore Line (all phases) 3 591 1 631
NMPP 4 875 4 304
Major rolling stock overhauls and refurbishment
2 355 11 028
Major infrastructure overhauls and refurbishment
1 540 7 963
Dual Voltage Locomotives 945 1091
DCT Reengineering 264 188
Ngqura Container Terminal 425 607
DHEW 64 502
Coal Line* 667 362
Cape Town Container expansion 699 1 950
Berth deepening of Pier 1 berths for expansion into Salisbury Island
- 2365
RCB Dry Bulk Terminal equipment replacement and refurbishment
153 914
Reconstruction of sheet pile quay walls at Maydon Wharf
116 953
Tugs, dredgers (TSHDs) and other floating craft
524 2 476
* Total investment in coal line: R9.8bn (included in rolling stock and infrastructure projectsSource: Transnet
3131
Understanding South Africa’s Port Costs
$0.00
$100,000.00
$200,000.00
$300,000.00
$400,000.00
$500,000.00
$600,000.00
SA
NTO
SV
ER
A C
RU
ZB
UE
NO
S A
IRE
S
LAE
M C
HA
BA
NG
YO
KO
HA
MA
NA
GO
YA
AN
TWE
RP
SIN
GA
PO
RE
LE H
AV
RE
TILB
UR
YB
RE
ME
RH
AV
EN
CA
PE
TO
WN
DU
RB
AN
PO
RT
ELI
ZAB
ETH
CH
AR
LES
TON
BA
LTIM
OR
EN
EW
YO
RK
Terminal Handling Charge Cargo Dues Sea Side Costs
• Cargo dues are the charges that Transnet charges port users for the recovery of its investment in port infrastructure
• Transnet is solely responsible for all port infrastructure investment: land, berths, docks, dredging (berth side, turning basin & channel) and receives no subsidies from central government or local government for these costs
• Comparing SA’s port costs needs to show institutional responsibility for port infrastructure, which varies widely between ports
• Port investments made by central and local governments in other countries are not recovered through port charges
• Transnet must recover its investments in port infrastructure to ensure future investments
DTI’S PORT COSTS COMPARISON GRAPH: AIDC Port Benchmarking Study, 2007
Average Cost per Vessel Call
3232
Understanding South Africa’s Port Costs (cont.)
32
IDENTIFICATION OF INSTITUTIONAL RESPONSIBILITY FOR PORT INVESTMENT ITEMS
Major Category Sub-Items SingaporeChina
(Waigaoqiao)Hong Kong Antwerp
South Africa
Maritime Access Infrastructure Channel CG CG LG CG PA
Breakwater CG CG LG CG PA
Navigation Aids CG CG LG CG PA
Port Infrastructure Land PA TO TO PA PA
Berths PA TO TO PA PA
Docks PA TO TO PA PA
Dredging:
- Berth Side TO TO LG PA PA
- Turning Basin CG PA LG CG PA
- Channel CG PA LG CG PA
Port Superstructure Cranes TO TO TO TO TO
Terminal TO TO TO TO TO
Sheds TO TO TO TO TO
Land Access Infrastructure Road Links CG CG CG CG LG & PA
Rail Links CG CG CG CG Other
Inland N/A CG CG CG N/A
Abbreviations: CG: Central Government; LG: Local Government; PA: Port Authority; TO: Terminal Operator
3333
South Africa’s port performance is higher than average
South Africa
Sub-Saharan Africa
Upper middle
income Clearance time with physical inspection (days)
2.67 4.94 2.94Clearance time without physical inspection (days) 0.5 2.83 1.57Lead time export for port/airport, median case (days) 2.28 7.79 2.91Lead time import for port/airport, median case (days) 3.25 7.05 4.1Typical charge for a 40-foot export container or a semi-trailer (US$) 907.33 2,240.56 1,264.98Typical charge for a 40-foot import container or a semi-trailer (US$) 1,516.22 3,045.00 2,473.01
Source: World Bank, Connecting to Compete, 2010
South Africa and the region are exposed to high container shipping charges and attempts to address this are underway through the establishment of a regional transhipment hub at the Port of
Ngqura.