25th March 2015

PRASA Challenges & Opportunities

Standing Committee on Appropriations

Agenda

1

A Introduction to PRASA

E

Funding Allocation and Spending Performance

C Strategic Plan

D

B

Challenges

Rail Modernisation – Key Projects

PRASA – the Passenger Rail Agency of South Africa

2

PRASA Structure

PRASA GROUP

PRASA RAILINTERSITE

INVESTMENTS

AUTOPAX(Long distance

coach)

METRORAIL(Suburban)

S-MEYL(Long distance)

•Translux•City to City

PRASA CRES

•Real Estate Solutions•Facilities Management

PRASA TECHNICAL

•R/Stock engineering and maintenance•Capital Projects

•Leverage investment on assets

The Primary object of PRASA in terms of the Legal Succession SATS Act is to:• Provide Urban Rail Commuter Services in the public interest

• Provide Long Haul Passenger Rail Services

• Provide Long Haul Bus Services

The Secondary object of PRASA is to:• Generate income from the exploitation of assets acquired by PRASA

PRASA – Summary Fact Sheet

3

Total Rail Network 22 300 Km

Commuter Rail Network 2 230 km electrified track

Number of Metro Coaches 4 638

Number of MLPS coaches 1 223 Coaches and 124 Locos

Number of Buses 458 Mercedes Benz, Man 109 and Old Fleet 150

Passenger Numbers Metrorail – 550 million passenger tripsBus Service – 3.1 million passengersSMEYL – 1.1 million passengers

Total Number of Employees ±16 500

Stations 498 stationsValue of Assets R36bn

Agenda

4

B Funding Allocation and Spending Performance

E

Introduction to PRASA

C Strategic Plan

D

A

Challenges

Rail Modernisation – Key Projects

5

Funding Allocation 2014/15

Allocation Amount Received Internal Revenue Total Revenue Total Expenditure

Current Allocation 3 563 397 3 420 799 6 984 196 7 856 462

Current Allocations amounted to 51% of PRASA's total revenue as at 28 February 2015.

The rest of the revenue is mainly made up of Fare Revenue and Rental Income which are

internally generated.

Total Expenditure is mainly made up of Employee costs, Energy costs, Material and

Maintenance and Municipal charges.

Allocation Amount Received Actual Expenditure

Capital Allocation 10 598 582 11 383 761

Total expenditure for the period that ended on 28 February 2015 exceeds the funding

allocation by R785 million.

The major spending items were

Rolling Stock Fleet Renewal Programme R5.7 billion

Acquisition of New Locomotives R1.4 billion

General Overhaul of Coached R702 million

Integrated Station Access Management Systems R735 million

Signalling and Telecommunications programme R488 million

Budget Framework over the 2015 MTEF

6

Notes

The Framework was used to guide the budgeting process.

Reprioritisation to projects was conducted, based on project priorities, project cash flow requirements and future

potential commitments

Overall growth in capital expenditure has increased by 11.3% per cent when compared to the 2014 MTEF of

R40 billion.

Table1: Budget Framework over the 2015 MTEF

Budget Framework 2014/15 2015/16 2016/17 2017/18 Total

R thousands Adjusted Budget MTEF

2015 MTEF Baseline (after reduction) 11 058 959 14 155 887 14 958 602 15 707 896 44 822 385

2015 MTEF Baseline (before reduction) 14 203 547 15 010 421 15 760 943 44 974 911

Capital Baseline Reduction -47 660 -51 819 -53 047 -152 526

2014 Baseline for New Rolling Stock 4 348 000 4 522 000 4 815 752 5 056 540 14 394 292

Year-on-year increase 28.0% 5.7% 5.0%

Adjustment

New Rolling Stock Cashflow Adjustment 1 351 959 -1 961 492 -645 486 -636 058 -3 243 036

Capital Baseline Reprioritization 1 961 492 645 486 636 058 3 243 036

2015 Baseline for New Rolling stock 5 699 959 2 560 508 4 170 266 4 420 482 11 151 256

Commitments

Projected commitments into the 2015/16 8 502 558 0 0 8 502 558

Available budget 11 058 959 14 155 887 14 958 602 15 707 896 44 822 385

Medium-Term Expenditure

Framework

Investment Outlook

7

57,5%42,5%

Infrastructure vs. Rolling Stock Investment Outlook Programmes Overview

Infrastructure

‒ Corridor Modernization

Programme

‒ Capital Intervention

Programme

‒ Station Improvement and

Upgrade Programme

‒ Rail Network Extensions

‒ Depots Programme

‒ Workplace Improvement

Programme

‒ Electrical Programme

Rolling Stock

‒ Rolling Stock Fleet Renewal

Programme

‒ Accelerated Rolling Stock

Programme

‒ New Locomotives

PRASA Corporate

8

R5.0bn

R6.5bnR6.9bn

Capital Programme 2015/16 2016/17 2017/18 Total MTEFPRASA Corporate 4 976 697 393 6 532 160 107 6 882 089 713 18 390 947 213

Rolling Stock Fleet Renew al Programme 2 560 508 293 4 170 266 732 4 420 482 736 11 151 257 761

Signalling and telecommunications Programme 1 875 973 200 1 844 184 241 1 912 835 295 5 632 992 736

ICT Systems 270 503 900 286 734 134 303 938 182 861 176 216

Enterprise Resource Planning (ERP) 88 587 000 40 794 000 43 241 640 172 622 640

Asset Protection Programme 181 125 000 190 181 000 201 591 860 572 897 860

Note:

The Integrated Ticketing

System Programme is

one of the key drivers for

ICT over the 2015MTEF

PRASA Rail

9

R1.7bn R1.7bnR1.8bn

Capital Programme 2015/16 2016/17 2017/18 Total MTEF

PRASA Rail 1 681 777 625 1 690 424 085 1 791 849 530 5 164 051 240

Capital Intervention Programme (minor w orks, safety & SNP) 584 496 125 403 720 800 427 944 048 1 416 160 973

Depots Machinery and Equipments 75 000 000 80 000 000 84 800 000 239 800 000

New Locomotives 562 281 500 719 103 285 762 249 482 2 043 634 267

Rolling Stock Adhoc Condition Work 160 000 000 169 600 000 179 776 000 509 376 000

Rolling Stock Components 300 000 000 318 000 000 337 080 000 955 080 000

PRASA Technical

10

Capital Programme 2015/16 2016/17 2017/18 Total MTEF

PRASA Technical 4 722 394 156 4 408 605 608 4 705 695 037 13 836 694 801

General overhaul of Metrorail Coaches 1 267 474 223 1 283 522 676 1 360 534 037 3 911 530 936

Refurbishment of Smeyl Coaches 217 329 000 103 750 000 151 415 304 472 494 304

Depots Modernization (5 depots, incl fencing) 1 336 378 316 804 305 000 939 373 441 3 080 056 757

Electrical Programme: Substation, New Overhead Lines & OHTE 323 578 500 342 087 000 362 612 220 1 028 277 720

Footbridges, Level Crossings and Structures 122 708 250 129 727 000 137 510 620 389 945 870

Metrorail/Gautrain Stray Current Mitigation 67 543 567 42 094 626 0 109 638 193

Station Modernization Programme (135 stations) 722 986 300 764 341 116 740 201 583 2 227 528 999

120km Perw ay Programme 310 000 000 327 732 000 347 395 920 985 127 920

Green View - Pienaarspoort Project 181 006 000 117 356 000 0 298 362 000

Queenstow n - Umtata 58 390 000 60 297 000 60 795 960 179 482 960

Bridge City 55 000 000 65 000 000 0 120 000 000

Motherw ell Rail Extension 60 000 000 368 393 190 605 855 952 1 034 249 142

R4.7bnR4.4bn

R4.7bn

PRASA Corporate Real Estate

11

R2.8bn

R2.3bn R2.3bn

Capital Programme 2015/16 2016/17 2017/18 Total MTEF

PRASA Corporate Real Estate 2 775 017 826 2 327 412 000 2 328 260 720 7 430 690 546

Station Improvement Programme 334 432 350 370 572 000 392 806 320 1 097 810 670

Station upgrades/ developmental acqusitions 484 160 200 385 350 000 408 471 000 1 277 981 200

Upgrade of Park Station 360 500 000 426 121 000 483 488 260 1 270 109 260

Workplace Improvement Programme (incl facilities) 406 279 375 414 093 000 423 938 580 1 244 310 955

Property Acquisition 197 189 468 - - 197 189 468

Integrated Station Access Management System (ISAMS) 882 456 433 614 676 000 619 556 560 2 116 688 993

Mabopane Station Upgrade 110 000 000 116 600 000 - 226 600 000

2015 MTEF Capital Programme

12

Capital Programme 2015/16 2016/17 2017/18 Total MTEF

PRASA Corporate 4 976 697 393 6 532 160 107 6 882 089 713 18 390 947 213

Rolling Stock Fleet Renewal Programme 2 560 508 293 4 170 266 732 4 420 482 736 11 151 257 761

Signalling and telecommunications Programme 1 875 973 200 1 844 184 241 1 912 835 295 5 632 992 736

ICT Systems 270 503 900 286 734 134 303 938 182 861 176 216

Enterprise Resource Planning (ERP) 88 587 000 40 794 000 43 241 640 172 622 640

Asset Protection Programme 181 125 000 190 181 000 201 591 860 572 897 860

PRASA Rail 1 681 777 625 1 690 424 085 1 791 849 530 5 164 051 240

Capital Intervention Programme (minor works, safety & SNP) 584 496 125 403 720 800 427 944 048 1 416 160 973

Depots Machinery and Equipments 75 000 000 80 000 000 84 800 000 239 800 000

New Locomotives 562 281 500 719 103 285 762 249 482 2 043 634 267

Rolling Stock Adhoc Condition Work 160 000 000 169 600 000 179 776 000 509 376 000

Rolling Stock Components 300 000 000 318 000 000 337 080 000 955 080 000

PRASA Technical 4 722 394 156 4 408 605 608 4 705 695 037 13 836 694 801

General overhaul of Metrorail Coaches 1 267 474 223 1 283 522 676 1 360 534 037 3 911 530 936

Refurbishment of Smeyl Coaches 217 329 000 103 750 000 151 415 304 472 494 304

Depots Modernization (5 depots, incl fencing) 1 336 378 316 804 305 000 939 373 441 3 080 056 757

Electrical Programme: Substation, New Overhead Lines & OHTE 323 578 500 342 087 000 362 612 220 1 028 277 720

Footbridges, Level Crossings and Structures 122 708 250 129 727 000 137 510 620 389 945 870

Metrorail/Gautrain Stray Current Mitigation 67 543 567 42 094 626 - 109 638 193

Station Modernization Programme (135 stations) 722 986 300 764 341 116 740 201 583 2 227 528 999

120km Perway Programme 310 000 000 327 732 000 347 395 920 985 127 920

Green View - Pienaarspoort Project 181 006 000 117 356 000 - 298 362 000

Queenstown - Umtata 58 390 000 60 297 000 60 795 960 179 482 960

Bridge City 55 000 000 65 000 000 - 120 000 000

Motherwell Rail Extension 60 000 000 368 393 190 605 855 952 1 034 249 142

PRASA Corporate Real Estate 2 775 017 826 2 327 412 000 2 328 260 720 7 430 690 546

Station Improvement Programme 334 432 350 370 572 000 392 806 320 1 097 810 670

Station upgrades/ developmental acqusitions 484 160 200 385 350 000 408 471 000 1 277 981 200

Upgrade of Park Station 360 500 000 426 121 000 483 488 260 1 270 109 260

Workplace Improvement Programme (incl facilities) 406 279 375 414 093 000 423 938 580 1 244 310 955

Property Acquisition 197 189 468 - - 197 189 468

Integrated Station Access Management System (ISAMS) 882 456 433 614 676 000 619 556 560 2 116 688 993

Mabopane Station Upgrade 110 000 000 116 600 000 - 226 600 000

Total 14 155 887 000 14 958 601 800 15 707 895 000 44 822 383 800

2015 MTEF Allocation 14 155 887 000 14 958 601 800 15 707 895 000 44 822 383 800

2015 MTEF Capital Programme

13

Economic Development Impacts

14

Job Creation

PRASA’s Capital Programme’s will have a strong emphasis on Job Creation and Economic

Development

Job Creation will be measured throughout the Programmes, based on the following:

o Job Creation quantum will be measured throughout the Programmes using consistent

measurement principles

o Quarterly reporting on Job Creation numbers

o Targets to be set during procurement phase and monitored throughout implementation

Furthermore, it is targeted that a full report on Job Creation will be submitted on all key

Capital Programmes by the end of the first quarter of 2015/16 Financial Year