PUBLIC ENTERPRISES PORTFOLIO COMMITTEE

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PUBLIC ENTERPRISES PORTFOLIO COMMITTEE
BRIEFING ON SOE INFRASTRUCTURE INVESTMENT 25
JUNE 2003
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Restructuring Proceeds and SOE Debt Trend (cont.)
SOE Foreign Borrowings 1992 to 2002
Ministry of Public Enterprises Date - 4
November, 2015 Page 2
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Restructuring Proceeds and SOE Debt Trend (cont.)
Surplus of Public Enterprises as of GDP
Ministry of Public Enterprises Date - 4
November, 2015 Page 3
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Consolidated SOE capital expenditure programmes
SOE Capital Budgets to 2005 (R millions)
Ministry of Public Enterprises Date - 4
November, 2015 Page 4
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Selected examples of infrastructure projects in
the Defence, Energy, and Transport sectors.
Ministry of Public Enterprises Date - 4
November, 2015 Page 5
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Energy Sector Eskom (cont.)
Generation Capital Expenditure Budges 2003 to
2007 Rm
Ministry of Public Enterprises Date - 4
November, 2015 Page 6
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Defence Sector Denel Capital Expenditure for
2003/04
Of the total amount spent on business
infrastructure 47 is for maintaining existing
capacity whilst 43 is investment to increase
capacity
Ministry of Public Enterprises Date - 4
November, 2015 Page 7
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Energy Sector Eskom (cont.)
Latest Transmission Supply Plan (2003-07)
Dec.2002
Ministry of Public Enterprises Date - 4
November, 2015 Page 8
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Energy Sector Eskom (cont.)
Eskom Distribution Capital Rolling Plan
Project Categories R000Direct Customer
Projects 575,190 Strengthening
Projects 449,911 Refurbishment
Projects 730,863 Electrification Projects
560,371 Land and Rights acquisitions
8,978 Rural Development 33,800
EBSST 74,200 Various other
257,334ASSET UNDER CONSTRUCTION 2,690,648
Ministry of Public Enterprises Date - 4
November, 2015 Page 9
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Energy Sector Eskom (cont.)
Electrification (Cumulative Number Of Homes
Electrified)
211 628
2.8 million homes electrified
Ministry of Public Enterprises Date - 4
November, 2015 Page 10
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Energy Sector Eskom (cont.)
Major Schemes in plan

• North North East Grid schemes
• Simunye RTS Camden
• Polokwane Network Strengthening Scheme
• Steelpoort Strengthening
• Adis Substation Integration
• Rustenburg Network Strengthening Scheme
• Central Grid Schemes
• Vaal Triangle Strengthening
• Johannesburg North Strengthening
• Atlas Bypass and Decommission Project

• East Grid Schemes
• Bayside Aluminium Potline Upgrade
• Hillside Aluminium 3rd Potline Integration
• Southern Western Grid Schemes
• Cape Strengthening North of Hydra Scheme
• Cape Strengthening South of Hydra Scheme
• Aluminium Smelter at Coega

Ministry of Public Enterprises Date - 4
November, 2015 Page 11
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Energy Sector Eskom (cont.)
Major capital projects within next 5 to 10 years

• Platinum and ferrochrome mining expansions within
  northern region
• Vaalwater 132kV Overlay - R23m
• UG2 Smelter Line and Substation - R30m
• Overyssel Line and Substation - R129m
• Tailings Platinum Mine Expansion - R30m
• Polokwane Smelter - R38m
• Styldrift Platinum Mine Expansion - R36m
• Waterval Platinum Project - R27m
• Transvaal Ferrochrome Mining - R42m
• Waterval Smelter Upgrade - R21m

5 year plan incorporates all reasonably foreseen
growth prospects, including platinum basin etc.
Potential projects may materialise in excess of
plan, no feel of the risk at this stage
Ministry of Public Enterprises Date - 4
November, 2015 Page 12
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(No Transcript)
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Transport Sector Port Operations
Project Durban Terminals Upgrade
State Owned Enterprises S A PORT OPERATIONS (TRANSNET)
Project Initiated January 2000
Project Finalized / Expected Date of Finalization December 2005
Policies / Legislation created / implemented N/A
Date Cabinet Approval Received/Expected N/A
Proceeds received N/A
Proceeds expected N/A
Advisors appointed N/A
Proejct value R700 MILLION
Restructuring Model Chosen Recapiltalisation
Jobs created / Jobs Lost Only jobs in supplier companies will be created
Project Manager Mr Hamilton Nxumalo
Contact Details 031 308 8310

• Overview
• A key part of the ports cargo handling
  infrastructure upgrade programme that aims to
  address capacity problems and to upgrade local
  facilities to global standards. Key features are
  
• Existing crane upgrades by conversion of crane
  power to 11KV
• Fire protection equipment at container gantries
• Socio-economic impact
• Employment creation during construction phase and
  improved service to clients

Ministry of Public Enterprises Date - 4
November, 2015 Page 14
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Transport Sector Port Operations (concluded)
Project Iron Ore Terminal Expansion
State Owned Enterprises S A PORT OPERATIONS (TRANSNET)
Project Initiated January 2000
Project Finalized / Expected Date of Finalization December 2004
Policies / Legislation created / implemented N/A
Date Cabinet Approval Received/Expected N/A
Proceeds received
Proceeds expected N/A
Advisors appointed N/A
Project value R921 million
Restructuring Model Chosen Capital expansion
Jobs created / Jobs Lost Jobs created in supplier companies
Project Manager Mr Hamilton Nxumalo
Contact Details 031 308 8310

• Overview
• Construction of expanded bulk handling faclities
  for the Saldanha Bay Iron Ore Terminal. The IOT
  is the dedicated export chanel for iron ore mined
  in the Northern Cape. The expansion is required
  to raise output from 18 million tpa to 29 million
  tpa.
• Installation and erection of 4.5km new conveyor
  belts
• Addition of 2 Shiploaders
• 3 new stacker reclaimers
• Purchase new tipper
• Refurbishment of existing equipment
• Upgrade of existing old equipment
• Socio-economic impact
• Support development of Northern Cape mineral
  fields and associated additional mining jobs.
  Increased iron ore exports will be worth R1.6
  billion pa.

Ministry of Public Enterprises Date - 4
November, 2015 Page 15
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Transport Sector Port Authority
Project Richards Bay Coal Terminal Capacity
Expansion

• National Port Authority (Transnet)

• State Owned Enterprises

• Overview
• Expansion of Terminal from 72 million tons per
  annum capacity to 82 million tons pa capacity.
• A further coal export facility is envisage at the
  Dry Bulk Terminal (DBT) in Richards Bay which
  will in its initial stage permit 800,000 tons of
  coal export. This will occur based on
  Environmental Impact Assessment completion

• N/A MOA close to finalisation

• Project Initiated

• Estimated finalisation date 2005-06

• Project Finalized / Expected Date of Finalization

• Compliance with Transnet Procurement Policy
  emphasis of BEE component in the exporting of
  coal.

• Policies / Legislation created / implemented

• Date Cabinet Approval Received/Expected

N/A

• Proceeds received

N/A

• Proceeds expected

• Private to be appointed by RBCT

• Advisors appointed

• The project is done in conjunction between
  Transnet RBCT for the tune of 2,4 billion rands
  
• Transnet R1,7 billion RBCT R700 mil

• Fees Paid (R/Donor Funded)

• Restructuring Model Chosen

N/A

• It is anticipated that job creation will arise as
  a result opportunities at mines

• Jobs created / Jobs Lost

• Project Manager

Jointly between RBCT Transnet
Ministry of Public Enterprises Date - 4
November, 2015 Page 16
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(No Transcript)
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Transport Sector Port Operations
Project Durban 2005
State Owned Enterprises National Ports Authority (Transnet)
Project Initiated January 2000
Project Finalized / Expected Date of Finalization December 2005
Policies / Legislation created / implemented N/A
Date Cabinet Approval Received/Expected N/A
Proceeds received N/A
Proceeds expected N/A
Advisors appointed N/A
Proejct value R900 million
Restructuring Model Chosen Recapiltalisation
Jobs created / Jobs Lost Only jobs in supplier companies will be created

• Overview
• A key part of the ports physical infrastructure
  upgrade programme that aims to address capacity
  problems and to upgrade local facilities to
  global standards. Key features are
• Upgrade of City Terminals in Durban and creation
  of expanded terminal
• Infrastructure development for Durban Container
  Terminal
• Coversion of pier 1 for container handling
• Socio-economic impact
• Employment creation during construction phase and
  improved service to clients

Ministry of Public Enterprises Date - 4
November, 2015 Page 18
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Transport Sector Port Authority (cont.)
Project Port of East London Deepening of West
Quay
State Owned Enterprises National Port Authority (Transnet)
Project Initiated March 2001
Project Finalized / Expected Date of Finalization December 2003
Policies / Legislation created / implemented OHSA, COID, NEMA Compliance Transnet Procurement Policy emphasis of BEE component and transfer of skills
Date Cabinet Approval Received/Expected
Proceeds received
Proceeds expected
Advisors appointed Designed by Protekon - Johannesburg
Fees Paid (R/Donor Funded) Dredging Geotechnical - R 1,500 000 Design and Construction - R 10, 853, 000 Total R 12, 353, 000
Restructuring Model Chosen
Jobs created / Jobs Lost ( Estimate) 40-50 local labour Unskilled, semi-skilled and skilled
Project Manager Sibongile Ngumbe Port of East London
Contact Details 043 700 2540 083 496 6569

• Overview
• Dredging and deepening of 250m of West Quay berth
  R-Extension to 10.7m consistent depth and the
  stabilization of the quaywall by rock anchors and
  grouting
• Socio-economic impact
• Enabling car carriers of deeper draft to call at
  the Port of East London, average 2 vessels per
  month
• Facilitating and enhancing growth of trade
  especially in the automotive industry, benefits
  realised in port and cargo dues, growth in
  economy as a result of cargo import/export plus
  the multiplier effect as a result of jobs created
  

Ministry of Public Enterprises Date - 4
November, 2015 Page 19
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Transport Sector Port Authority (concluded)
Project Construction of Port of Ngqura

• Overview
• The construction of the Ngqura Port is
  effectively the key to unlock the potential of
  the Coeg IDZ. Already over 3 million cubic metres
  of soil has been excavated from the future basin.
  Key parts of current work
• Marine infrastructure (keywalls and excavation of
  turning basin)
• Sand bypass system
• Dredging is scheduled to start in June
• Parallel developments on the land side are
  building the IDZ infrastructure and providing
  bulk infrastructure for the industrial land and
  access roads
• Socio-economic impact
• It is expected that during construction phase
  approximately 2000 jobs will be created, while
  the permanent jobs in the port will be fairly
  few, the potential of the IDZ is enormous (but
  cannot be quantified at this stage).

State Owned Enterprises National Ports Authority (Transnet)
Project Initiated N/a
Project Finalized / Expected Date of Finalization Expected finalisation end of 2005
Policies / Legislation created / implemented Compliance with Transnet Board sanction emphasis of BEE component in the building of breakwaters and quaywalls
Date Cabinet Approval Received/Expected N/a
Proceeds received N/a
Proceeds expected N/a
Advisors appointed N/a
Fees Paid (R/Donor Funded) Dredging works of R423 million (BEE R423) Maritime works (Breakwaters quaywalls - R 1,429 billion. Sand bypass works R98,8 million Total R 3,2 billion
Restructuring Model Chosen N/a
Jobs created / Jobs Lost Currenlty 650 people working on marine infrastructure. During the first phase of construction on the land side the estimate employment will rise ot 2000 mostly local labour
Project Manager Kgoadi Malatsi
Contact Details 083 308 9547
Ministry of Public Enterprises Date - 4
November, 2015 Page 20
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SPOORNET
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Transport Sector Rail
Project Rolling Stock Capitalisation and
Refurbishment Programme
State Owned Enterprises Spoornet
Project Initiated 2002
Project Finalized / Expected Date of Finalization 2018
Policies / Legislation created / implemented Government Rail Model adopted
Date Cabinet Approval Received/Expected Nov 2001
Proceeds received NA
Proceeds expected NA
Advisors appointed NA
Project Value R 29 billion
Restructuring Model Chosen Re-capitalisation and internal restructuring
Jobs created / Jobs Lost Not quantifiable as knock effect depends on Macro-economic changes
Project Manager Chris Dutton (Chief Engineer)
Contact Details [phone]

• Intro
• Spoornet has a fleet of outdated locomotives and
  wagons. The average age of the existing
  locomotive fleet is 25 Years. The operating cost,
  reliability and service quality of running these
  old locomotives has caused the withdrawal of
  services and the pricing of services beyond the
  carrying capacity of the market.
• Socio-economic impact
• The recapitalisation programme will allow more
  efficient locomotives to be used in the rural
  areas(primarily diesel).
• This will allow the re-vitalisation of the branch
  line network and act as an economic multiplier in
  rural economies.
• The overall efficiency and quality of rail
  services will improve dramatically, thereby
  driving down real pricing of rail services, and
  also increasing the carrying capacity of the rail
  network. This will result in a shift from road to
  rail (in conjunction with Government policy
  initiatives) that will arrest the current level
  of road degradation and related costs.
• It is envisaged that R 9 Bil of the forecast R 10
  bil capex on wagons, will be spent in RSA. Less
  than 50 of the R 19 Bil total expenditure on
  locomotives will be spent abroad. The components
  sourced will be those that are not manufactured
  in RSA. The successful suppliers will be required
  to transfer skill over the period to ensure a
  reduced reliance on foreign expertise, and will
  be required to embed their technology in Spoornet
  and develop local support networks.

Ministry of Public Enterprises Date - 4
November, 2015 Page 22
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Transport Sector Rail (cont.)
Project Fixed Infrastructure Upgrade
State Owned Enterprises Spoornet
Project Initiated 2002
Project Finalized / Expected Date of Finalization 2018
Policies / Legislation created / implemented Government Rail Model Adopted
Date Cabinet Approval Received/Expected Nov 2001
Proceeds received NA
Proceeds expected NA
Advisors appointed NA
Project Value R 13 Bil
Restructuring Model Chosen Re-capitalisation and internal restructuring
Jobs created / Jobs Lost Not quantifiable as knock effect depends on Macro-economic changes
Project Manager Danie Barnard(Chief Engineer)
Contact Details [phone]

• Intro
• The fixed infrastructure plays a significant role
  in the operational efficiencies and carrying
  capacity of the rail network. The spending on
  this item will be spread across all the provinces
  and will be procured locally wherever possible.
• As can be seen by some of the examples to follow,
  the line by line assessment and the development
  of regional strategies for the Light and low
  density line system, that will be done in
  consultation with provincial and local
  government, business, labour and communities,
  will require that this investment be spent in
  areas all around the country and not merely in
  the big cities and their linkages.
• Socio-economic impact
• The procurement of goods and services in the
  upgrade localities will have a knock-on effect in
  those regional and local economies.
• The raising of the carrying capacities and
  efficiencies of lines will have a downward
  pressure on real pricing in the medium term and
  therefore stimulate local economic development
  and reduce the real cost of logistics faced by
  rural and peri-urban production.
• This will have the net effect of reducing the
  cost of exporting goods from marginal areas in
  the country, and therefore allow the expansion of
  the basket of goods currently exported.
• This expenditure is further required to raise the
  safety levels in some areas, support the
  industrial, mining and development strategies of
  the Provincial and Local Governments, support the
  integrated transport strategies at local and
  provincial levels and also raise the levels of
  service delivery to surrounding communities.

Ministry of Public Enterprises Date - 4
November, 2015 Page 23
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TRANSPORT SECTOR RAIL INFRASTRUCTURE Three
basic elements form the backbone of fixed rail
infrastructure development 1 leasing or
outsourcing of selected unviable or LDL 2 new
line development 3 upgrades of LDLs, HDLs or
lines that were previously classified as
unviable. NB identify lines as part of IDZ,
SDI, provincial authorities development plans,
and link to Eskom projects, agricultural
development and new mining and industrial
activity.
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Spoornet Rail Network
HDL LDL with noservice LDL that arenot viable
LDL with repositioning potential
Railway Network classification prior to regional
development strategies being developed
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Spoornet lines Northcor Capecor Southcor Nata
lcor R.Baycor N.Westcor Eastcor N.Eastcor Salkor S
entracor SouthEastCor Westcor Freestate
Beit Bridge
Messina
Louis Trichardt
Ellisras
Soekmekaar
Thabazimbi
Pietersburg
Drummondlea
Vaalwater
Chroomvallei
Phalaborwa
Zebediela
Naboomspruit
Hoedspruit
Middelwit
Nylstroom
Steelpoort
Northam
Graskop
Marble Hall
Roossenekal
Rustenburg
Plaston
Cullinan
Komatipoort
Belfast
Rayton
Witbank
Mafikeng
Machadodorp
Pretoria
Lichtenburg
Ogies
O/fontein
Krugersdorp
Sentrarand
Baberton
Welgedag
B/plaas
Coligny
Hawerklip
Jburg
Vermaas
Breyten
Welverdiend
Bethal
Lothair
Potchestroom
Ottosdal
Klerksdorp
Orkney
Wolwehoek
Standerton
Hotazel
Schweizer-Reneke
Vierfontein
Makwassie
Pudimoe
Charlestown
Erts
Golela
Vrede
Westleigh
Newcastle
Ancona
Kroonstad
Utrecht
Sishen
Hlobane
Warden
Warrenton
Arlington
Naroegas
Vryheid
Nakop
Manganore
Whites
Glen H
Harrismith
Virginia
Bultfontein
Upington
Bethlehem
Postmasburg
Palingpan
Glencoe
Theunisen
Ladysmith
Kimberley
Marquard
Winburg
Kakamas
Bergville
Empangeni
Nkwalini
Douglas
Eshowe
Bloemfontein
Kranskop
Richards Bay
Moorleigh
Ladybrand
Sannaspos
Greytown
Koffiefontein
Maseru
Belmont
Howick
Prieska
Stanger
Hilton
Copperton
Underberg
Richmond
Donnybrook
Mid Ilovo
Springfontein
Durban
Mandonela
Matatiele
Bethulie
Franklin
Kelso
De Aar
Kokstad
Aliwal North
Harding
Simuma
Sakrivier
Port Shepstone
Bitterfontein
Dreunberg
Barkley East
Jamestown
Noupoort
Maclear
Kootjieskolk
Calvinia
Rosmead
Schoombee
Hutchinson
Umtata
Hofmeyer
Queenstown
Tarkastad
Qamata
Beaufort West
Klawer
Seymour
Somerset East
Amabele
Cookhouse
Blaney
Klipplaat
Fort Beaufort
Porterville
Saldanha
East London
Prins Alfred Hamlet
Touwsrivier
Kirkwood
Calitzdorp
Ladysmith
Atlantis
Alexandria
Worcester
Uitenhage
Oudtshoorn
Patensie
Port Alfred
George
Avontuur
Franschhoek
Port Elizabeth
Riversdale
Cape Town
Stellenbosch
Knysna
Mosselbaai
Protem
Strand
Simonstad
Bredasdorp
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Transport Sector Rail (cont.) North West
Province
Project Hercules - Magaliesberg Line Tourism
Project
State Owned Enterprises Spoornet
Project Initiated 2002
Project Finalized / Expected Date of Finalization 2004
Policies / Legislation created / implemented North West Tourism Strategy
Date Cabinet Approval Received/Expected North West Province and Local Government
Proceeds received
Proceeds expected R 180 000
Advisors appointed Line Lease
Project Value Not quantifiable as yet
Restructuring Model Chosen Public-Public Partnership Nominal Rental Agreement
Jobs created / Jobs Lost Tourism and Rail jobs created cannot be quantified yet
Project Manager Charles Chinyavanhu
Contact Details 011 773 2780

• Intro
• Spoornet is leasing the Hercules Magaliesberg
  line to the North West Parks and Tourism Board
  for a nominal amount of R 1000,00 per month.
  This is to allow the NWPTB to run a tourist rail
  service that will ensure the ingress of tourism
  spending into the area.
• Socio-economic impact
• SMME opportunities for integrating their products
  or services into the rail service offering is in
  the process of being finalised.
• The rail service itself will create certain jobs
  in its operation and maintenance.
• This service constitutes an integral part of the
  economic development strategy in the province.

Ministry of Public Enterprises Date - 4
November, 2015 Page 27
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Transport Sector Rail (cont.) North West
Province
Project New Ferro-Chrome Line (Brits)
State Owned Enterprises Spoornet
Project Initiated 2003
Project Finalized / Expected Date of Finalization 2005
Policies / Legislation created / implemented
Date Cabinet Approval Received/Expected
Proceeds received NA
Proceeds expected NA
Advisors appointed
Project Value R 30 mil
Restructuring Model Chosen
Jobs created / Jobs Lost 100 short term construction jobs Un-quantified mining jobs
Project Manager Danie Barnard(Chief Engineer)
Contact Details 012 315 4025

• Intro
• This is line is being built to allow the export
  of ferro-chrome from Brits to Richards Bay.
• Socio-economic impact
• The construction of this line will ensure that
  the mining output is moved on the railway line
  and thereby prevent the degradation of the road
  network in the area. The road maintenance savings
  are significant.
• The construction of this line in support of the
  mining development and beneficiation will have
  significant multiplier effects in the region and
  locality.
• The total value of product moved to export would
  be R 2.7 Bil per annum.
• The total amount of inbound supplies and process
  elements would be plus or minus 135 Tons per
  annum.

Ministry of Public Enterprises Date - 4
November, 2015 Page 28
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Transport Sector Rail (cont.) Eastern Cape
Province
Project Umtata Amabele Line Upgrade

• Intro
• The area is suffering an economic decline.
  Several factories and facilities have closed. The
  Eastern Cape Government, in conjunction with
  Spoornet is upgrading the line to act as an
  anchor infrastructure corridor. This will raise
  the carrying capacity of the line and thereby
  raise the ability to move goods from the inland
  areas to export facilities in East London.
• An IDZ has been approved at the port and rail
  facilities in East London. This line will be the
  prime connection between the IDZ and the inland
  areas.
• This line is critical to preventing environmental
  and infrastructural degradation, as the impact of
  all the traffic on road would have major
  environmental and road maintenance cost
  implications.
• This project has reversed the non-viable status
  of the line and represents the kind of outcome of
  the line by line analysis and regional
  consultative process that would be a net
  contributor to a regionally distributed economic
  value add infrastructure investment programme.
• Socio-economic impact
• The traffic on the railway line has decreased
  from 19 000 tons in 1997 to 7 000 tons. This
  traffic was mainly coal and wood poles.
• The upgrading of the line will support the
  planned industrial, mining and agricultural
  development in the area and is planned to raise
  the maximum traffic to 1.5 Million tons a year
  once the standing timber has matured and the
  mining production has come on line.
• The commodity profile on the line will change to
  mainly timber to chipping facilities in KZN,
  agricultural and mining products.

State Owned Enterprises Spoornet
Project Initiated 2002
Project Finalized / Expected Date of Finalization 2005
Policies / Legislation created / implemented Eastern Cape development support initiatives
Date Cabinet Approval Received/Expected Eastern Cape Province Approval
Proceeds received NA
Proceeds expected NA
Advisors appointed NA
Project Value R 108 Mil
Restructuring Model Chosen Public-Public Partnership
Jobs created / Jobs Lost Not quantified as yet
Project Manager Steve Batyi
Contact Details 011 773 2780
Ministry of Public Enterprises Date - 4
November, 2015 Page 29
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Transport Sector Rail (cont.) Eastern Cape
Province
Project Coega Extension
State Owned Enterprises Spoornet
Project Initiated 2002
Project Finalized / Expected Date of Finalization 2010
Policies / Legislation created / implemented Eastern Cape development support initiatives
Date Cabinet Approval Received/Expected Eastern Cape Province Approval
Proceeds received NA
Proceeds expected NA
Advisors appointed NA
Project Value R 500 Mil
Restructuring Model Chosen New Line
Jobs created / Jobs Lost 300 construction period jobs
Project Manager Danie Barnard
Contact Details 012 315 4025

• Intro
• This line is intended to link up the Coega
  development with the Port Elizabeth rail network.
  
• Socio-economic impact
• The operation of this line will raise the
  financial viability of the Coega Port and the
  throughput on the IDZ.
• This will directly impact on the employment
  opportunities in the area.
• This line will reduce the costs of manufacturing
  and export from the Coega IDZ.

Ministry of Public Enterprises Date - 4
November, 2015 Page 30
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Transport Sector Rail (cont.) Northern Cape
Province
Project OREX Upgrade
State Owned Enterprises Spoornet
Project Initiated 2002
Project Finalized / Expected Date of Finalization 2007
Policies / Legislation created / implemented
Date Cabinet Approval Received/Expected Government Rail Model
Proceeds received NA
Proceeds expected NA
Advisors appointed
Project Value R 160 Mil
Restructuring Model Chosen Re-capitalisation and internal restructuring
Jobs created / Jobs Lost 250 construction jobs 100 permanent jobs
Project Manager Steve Batyi (Spoornet)
Contact Details 011 773 2780

• Intro
• This line, that carries iron ore from Sishen to
  the Saldanha Iron Ore Terminal, is being upgraded
  from an annual capacity of 26 Million tons to 38
  Million Tons.
• Socio-economic impact
• This raising in capacity will enable the mining
  industry in the province to raise production
  during favourable market periods and therefore
  extract maximum possible revenue from their
  operations.
• This expansion in production will require that
  additional mining jobs be created.
• The value of the additional iron ore that can be
  exported as a result of this expansion is R 1,6
  Bil per annum

Ministry of Public Enterprises Date - 4
November, 2015 Page 31
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Transport Sector Rail (cont.) Northern Cape
Province
Project Northern Cape GFB Line Upgrade
State Owned Enterprises Spoornet
Project Initiated 2002
Project Finalized / Expected Date of Finalization 2008
Policies / Legislation created / implemented Government Rail Model
Date Cabinet Approval Received/Expected November 2001
Proceeds received NA
Proceeds expected NA
Advisors appointed
Project Value R 400 Mil
Restructuring Model Chosen Re-capitalisation and internal restructuring
Jobs created / Jobs Lost 300 construction jobs
Project Manager Danie Barnard
Contact Details 012 315 4025

• Intro
• This is a general upgrade of the rail network in
  the Northern Cape.
• Socio-economic impact
• The impact of this upgrade will primarily be felt
  by the mining industry and related industries.
• This would raise the carrying capacity of the
  network in the province to provide for expansion
  in mineral production.
• The upgrading of the line will support the
  planned mining and industrial beneficiation in
  the Northern Cape.
• The line upgrades will be prioritised in the
  consultative regional process to ensure maximum
  possible support to Provincial and Local
  Government development and transport strategies,
  as well as support to private sector initiatives
  with job creation or job loss reversal
  possibilities.
• The upgrade will also raise the rail safety
  standards.

Ministry of Public Enterprises Date - 4
November, 2015 Page 32
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Transport Sector Rail (cont.) Northern Cape
Province
Project Belmont Douglas Upgrade

• Intro
• Upgrading the line to carry additional maize and
  industrial products resulting from economic
  development initiatives by the Province.
• Socio-economic impact
• The upgrade of the line will enable the Northern
  Cape farmers to deliver maize to all corners of
  the country.
• The line will open up tourism opportunities for
  SMMEs in the Northern Cape Province.
• The impact of all the additional traffic on road
  that results from production expansion, would
  have major environmental and road maintenance
  cost implications
• A Provincial irrigation scheme is established at
  the confluence of the Vaal and the Orange rivers.
  This scheme ensures a flattened traffic flow over
  all seasons. For the past few years, production
  in the area has been growing at the rate of 30
  per annum.

State Owned Enterprises Spoornet
Project Initiated 200
Project Finalized / Expected Date of Finalization 2004
Policies / Legislation created / implemented Northern Cape development support initiatives
Date Cabinet Approval Received/Expected Northern Cape Province Approval
Proceeds received NA
Proceeds expected NA
Advisors appointed
Project Value R 20 Mil
Restructuring Model Chosen Public-Public Partnership
Jobs created / Jobs Lost 120 Construction Jobs Permanent jobs cannot be quantified
Project Manager Charles Chinyavanhu
Contact Details 011 773 2780
Ministry of Public Enterprises Date - 4
November, 2015 Page 33
34
Transport Sector Rail (cont.) KZN Province
Project CoalLink Upgrade
State Owned Enterprises Spoornet
Project Initiated 2003
Project Finalized / Expected Date of Finalization 2018
Policies / Legislation created / implemented Government Rail Model Adopted
Date Cabinet Approval Received/Expected November 2001
Proceeds received NA
Proceeds expected NA
Advisors appointed NA
Project Value R 1.8 Bil
Restructuring Model Chosen Capitalisation and internal restructuring
Jobs created / Jobs Lost 500 construction jobs 200 permanent jobs will be created
Project Manager Danie Barnard
Contact Details 012 315 4025

• Intro
• This project will raise the carrying capacity of
  the line from 64 Mil tons to 82 Mil tons per
  annum.
• Socio-economic impact
• The value of the additional traffic exported on
  this line is R 3bil per annum.
• The expansion of the line capacity will ensure
  that the access of BEE Coal Miners to export
  facilities will be accommodated at similar
  operating and costing as that faced by RBCT
  owners. This is dependant on the upstream
  consolidation facilities currently under
  discussion, being in place.

Ministry of Public Enterprises Date - 4
November, 2015 Page 34
35
Transport Sector Rail (cont.) KZN Province
Project GFB Line and Facilities Upgrade
State Owned Enterprises Spoornet
Project Initiated 2002
Project Finalized / Expected Date of Finalization 2008
Policies / Legislation created / implemented Government Rail Model
Date Cabinet Approval Received/Expected November 2001
Proceeds received NA
Proceeds expected NA
Advisors appointed
Project Value R 680 Mil
Restructuring Model Chosen Capitalisation and internal restructuring
Jobs created / Jobs Lost 200 construction jobs
Project Manager Steve Batyi (Spoornet)
Contact Details 011 773 2780

• Intro
• This project is the upgrading of all fixed
  facilities in KZN.
• Socio-economic impact
• The raised levels of efficiency resulting from
  the reduced downtime experienced with outdated
  fixed infrastructure will put downward pressure
  on real pricing of rail services and raise the
  carrying capacity of the network.
• The lowered cost faced by manufacturers will
  raise their competitive positions in the
  provinces export industries.
• The upgrade is also intended to add into the
  initiatives of the Province, such as the Dube
  Tradeport.

Ministry of Public Enterprises Date - 4
November, 2015 Page 35
36
Transport Sector Rail (cont.) Mpumalanga
Province
Project Ressano Garcia Upgrade
State Owned Enterprises Spoornet
Project Initiated 2003
Project Finalized / Expected Date of Finalization 2018
Policies / Legislation created / implemented
Date Cabinet Approval Received/Expected
Proceeds received NA
Proceeds expected NA
Advisors appointed NA
Project Value R 90 Mil
Restructuring Model Chosen Public Public Partnership with Mozambican Rail
Jobs created / Jobs Lost 500 construction jobs
Project Manager Steve Batyi (Spoornet)
Contact Details 011 773 2780

• Intro
• This is the capex that is required to upgrade the
  line for the concession agreement that has been
  concluded between Spoornet and CFM(the
  Mozamambican Railway Utility).
• Socio-economic impact
• This upgrade will raise the traffic through the
  Province.
• This upgrade will raise the access to the Port of
  Maputo by SMMEs and developing miners in the
  Province.

Ministry of Public Enterprises Date - 4
November, 2015 Page 36
37
Transport Sector Rail (cont.) Limpopo Province
Project Fixed Infrastructure Upgrade
State Owned Enterprises Spoornet
Project Initiated 2002
Project Finalized / Expected Date of Finalization 2006
Policies / Legislation created / implemented Government Rail Model
Date Cabinet Approval Received/Expected November 2001
Proceeds received NA
Proceeds expected NA
Advisors appointed
Project Value R 56 Mil
Restructuring Model Chosen Capitalisation and internal restructuring
Jobs created / Jobs Lost 200 construction jobs
Project Manager Danie Barnard
Contact Details 012 315 4025

• Intro
• This project is the upgrading of all fixed
  infrastructure in Limpopo Province.
• Socio-economic impact
• The high rate of rail accidents will be curtailed
  by the significant revamping of the signaling
  system, thereby reducing the number of temporary
  line closures and the resultant cost of post
  accident rehabilitation.
• The raised levels of efficiency resulting from
  the reduced downtime experienced with the
  accidents, will put downward pressure on real
  pricing of rail services and raise the carrying
  capacity of the network.
• The lowered cost faced by mining and industry
  will raise their competitive positions in the
  provinces export industries.

Ministry of Public Enterprises Date - 4
November, 2015 Page 37
38
Transport Sector Rail (cont.) Free State
Province
Project Kroonstad Ladysmith Line and Maseru
Container Terminal Upgrade
State Owned Enterprises Spoornet
Project Initiated 2003
Project Finalized / Expected Date of Finalization 2006
Policies / Legislation created / implemented Government Rail Model
Date Cabinet Approval Received/Expected November 2001
Proceeds received NA
Proceeds expected NA
Advisors appointed NA
Project Value R 44 Mil
Restructuring Model Chosen Capitalisation and internal restructuring
Jobs created / Jobs Lost 200 construction jobs
Project Manager Steve Batyi (Spoornet)
Contact Details 011 773 2780

• Intro
• This project is the upgrading of the line to
  ensure an export corridor for the Vereeniging/Van
  der Bijl/Sasolburg Industrial complex.
• This project includes the upgrade of the Maseru
  Container Terminal.
• Socio-economic impact
• This line will ensure that the industrial
  manufacturers have ready access to the mainline
  to the Durban Harbour.
• It will further raise the access of manufacturers
  in Maseru to export markets.
• This line also provides an alternative route for
  the export of agricultural products from the Free
  State.

Ministry of Public Enterprises Date - 4
November, 2015 Page 38
39
Transport Sector Rail (cont.) Western Cape
Project GFB Line and Facilities Upgrade
State Owned Enterprises Spoornet
Project Initiated 2003
Project Finalized / Expected Date of Finalization 2007
Policies / Legislation created / implemented Government Rail Model
Date Cabinet Approval Received/Expected November 2001
Proceeds received NA
Proceeds expected NA
Advisors appointed
Project Value R 130 Mil
Restructuring Model Chosen Capitalisation and internal restructuring
Jobs created / Jobs Lost 100 construction jobs
Project Manager Steve Batyi (Spoornet)
Contact Details 011 773 2780

• Intro
• This project is the upgrading of facilities in
  the Western Cape, with a special emphasis on the
  signaling upgrade to reduce the possibility of
  accidents, such as that which was recently
  experienced.
• Socio-economic impact
• This will raise the system efficiency in the
  Province and ensure that the level of incidents
  and accidents are reduced, thereby increasing the
  capacity on the line and raising the level of
  safety of the interlink between passenger and
  freight services.

Ministry of Public Enterprises Date - 4
November, 2015 Page 39