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Transport infrastructure can define a country—just think of India’s railways, the high-speed trains of Europe and Japan and the USA’s highways. China is investing heavily in creating the world’s most advanced rail infrastructure; and South Africa is committed to making

its rail and port network fit for the 21st century. South Africa has an established rail network; but it could not be regarded as

a world leader. However, that is in the process of change. The organisation that is tasked to implement the growth and regeneration strategy is Transnet Capital Projects, which is part of the South African government-owned Transnet Ltd.

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The

waking Transnet Capital Projects is investing billions of rand in transforming South Africa’s transport infrastructure, as Moira Moses told Ruari McCallion

Tr a n s n e t : C a p i t a l P r o j e c t s

giantwaking

Tr a n s n e t : C a p i t a l P r o j e c t s

transport operations and some IT companies,” Moses continues. “The decision was taken at that time to focus on our business—there was a pressing need to invest, with a lot of backlog that required attention.”

Three ‘corridors’ were identified as the main priorities: Gauteng-Maputo, up to the Mozambique border; Northern Cape-West Coast and Cape; and Gauteng-Cape Town. But that didn’t mean other areas were ignored, or put on the back burner—it was purely a question of setting priorities for action and implanting the strategy.

“In terms of rail freight, we have identified our

core business in key corridors, which we will continue to own and operate,” Moses continues. “Other lines—secondary or branch lines—are either open or being opened to the private sector. One of the main pillars of the turnaround is capital optimisation—when we embarked on the strategy, we recognised that there had been underinvestment in our assets. So what we did, in setting our priorities, was set out to understand who our key customers are and how we were going to support them and the South African economy.”

In order to do this, TCP also developed a stronger understanding of its key assets, so as to ensure it provides capacity ahead of demand—thus the 30-year view on infrastructure. The implementation of this structured approach has enabled the company to improve capacity and performance.

“In the West Coast-Cape area, the core commodity is iron ore from the Northern Cape. We carry that ore 800 kilometres or so, to Soldanha Bay,” Moses says. “Our first investment programme resulted in a rise in tonnage capacity from 47 million to 60 million tonnes. We created more passing loops and updated the signalling systems.” Then TCP invested in updating the ports, in order that they could handle the increased traffic. “We updated our existing stacker/reclaimers and ship loaders, and bought new units as well.”

The Gauteng-Cape Town corridor has also

“Transnet is made up of five operating divisions,” says Moira Moses, group executive of Transnet Capital Projects (TCP). “They are: Transnet Freight Rail; Transnet National Port Authority, which owns eight of the country’s major ports; Transnet Port Terminals; Transnet Rail Engineering, which manufactures and maintains rolling stock; and Transnet Pipelines.” TCP is one of two special divisions of the organisation, the other being Transnet Properties.

TCP has three functions, as Moses explains: “First, we undertake all long-range planning for the company. We take a 30-year view on infrastructure requirements and formulate, from that, a five-year plan,” she says. “Second, we have the responsibility for the development and execution of large and mega-sized projects: effectively, everything over R50 million. Last, we are charged with the maintenance of the physical infrastructure, including track and signalling but not the rolling stock.”

TCP is investing hugely—around R20 billion a year. Even with the decline in value of the rand compared with other major currencies, that is a great deal of money—equivalent to nearly $3 billion or a little over €2 billion. The investment is a key element in Transnet’s turnaround and growth strategy, which was launched in 2004.

“At that time, Transnet was a large conglomerate. It owned South African Airways, passenger

Platinum Projects holds a close association with

Transnet through successfully completed refurbishment

projects on the tipplers, ore reclaimers and shiploaders.

Turnkey service, rapid response and deadline delivery

with quality, safety and cost efficiency have reinforced

this association. Project management, mechanical,

electrical, structural engineering, specialized welding

services, cranage, rigging, design and automation are

the services currently provided by us to Transnet.

Platinum Projects

“We have the responsibility for the development and execution of large and mega-sized projects: effectively, everything over R50 million”

Tr a n s n e t : C a p i t a l P r o j e c t s

benefited. “This is a large export area but there is a lot of business local to Cape Town as well,” Moses continues. “We upgraded the carrying capacity of the container terminal, with a reconfigured layout, new ship-to-shore cranes and rail-mounted gantry cranes—so a pretty comprehensive programme of modernisation.” Port Elizabeth now has a new port facility; and a few miles up the coast, Ngquara now has a deepwater port that can cater for the new generation of large vessels. “We are keen to support trade between ourselves and the growing markets, the BRIC countries especially, as well as catering for trade that comes around Africa. Our hub terminal facilities allow for trans-shipping and short-route shipping to the east and west coasts of the continent.”

Durban, the busiest port in Africa, has seen a number of projects to improve and extend its capacity and capabilities. Vehicles produced by BMW, Mercedes-Benz and Ford are transported by rail through the city to the port for export. Durban has a new container terminal and a new multipurpose pipeline running 560 kilometres to Gauteng that will handle much of South Africa’s fuel supplies for the next 50 years.

TCP has invested R75 billion over the past five years. Although it is state-owned, its finances don’t come from the taxpayer. “We raise money off our own balance sheet,” Moses says. “We don’t rely on government guarantees. Some of our services are monopolistic, in the key corridors, to mining companies and in bulk services. Our biggest competition is road haulage at this stage, and we have seen a migration to truck carriage. We’re working to regain market share; to build a strong nationwide infrastructure; and we have implemented a rigorous management system.”

With the help of Stellenbosch University, TCP has also improved its freight forecasting model, meaning it can ensure land is available for the next 30 years—massively important when engaging with its customers and with government departments. “We have also improved our safety record and shortened the time taken to deliver our projects,” Moses concludes. It all adds up to a sound foundation for South Africa’s future transport infrastructure. www.transnet.net

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